28DIf paragraph 28 applies, an entity shall apply paragraphs 28B‒28C in accordance with paragraph B35C.

28D If paragraph 28 applies, an entity shall apply paragraphs 28B‒28C in accordance with paragraph B35C.
28E At the end of each reporting period, an entity shall assess the recoverability of an asset for insurance acquisition cash flows if facts and circumstances indicate the asset may be impaired (see paragraph B35D). If entity identifies an impairment loss, the entity shall adjust the carrying amount of the asset and recognise the impairment loss in profit or loss.
28F An entity shall recognise in profit or loss a reversal of some or all of an impairment loss previously recognised applying paragraph 28E and increase the carrying amount of the asset, to the extent that the impairment conditions no longer exist or have improved.

Measurement (paragraphs B36–B119F B119)

29 An entity shall apply paragraphs 30–52 to all groups of insurance contracts within the scope of AASB 17, with the following exceptions:
(b) for groups of reinsurance contracts held, an entity shall apply paragraphs 32–46 as required by paragraphs 63–70A 70. Paragraph Paragraphs 45 (on insurance contracts with direct participation features) and paragraphs 47–52 (on onerous contracts) do not apply to groups of reinsurance contracts held.
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Measurement on initial recognition (paragraphs B36–B95F B95)

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Estimates of future cash flows (paragraphs B36–B71)

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34 Cash flows are within the boundary of an insurance contract if they arise from substantive rights and obligations that exist during the reporting period in which the entity can compel the policyholder to pay the premiums or in which the entity has a substantive obligation to provide the policyholder with insurance contract services (see paragraphs B61–B71). A substantive obligation to provide insurance contract services ends when:
(b) both of the following criteria are satisfied:
(ii) the pricing of the premiums for coverage up to the date when the risks are reassessed does not take into account the risks that relate to periods after the reassessment date.
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Contractual service margin

38 The contractual service margin is a component of the asset or liability for the group of insurance contracts that represents the unearned profit the entity will recognise as it provides insurance contract services in the future. An entity shall measure the contractual service margin on initial recognition of a group of insurance contracts at an amount that, unless paragraph 47 (on onerous contracts) or paragraph B123A (on insurance revenue relating to paragraph 38(c)(ii)) applies, results in no income or expenses arising from:
(b) any cash flows arising from the contracts in the group at that date;
(c)(b) the derecognition at the date of initial recognition of:
(i) any asset or liability recognised for insurance acquisition cash flows applying paragraph 28C 27; and
(ii) any other asset or liability previously recognised for cash flows related to the group of contracts as specified in paragraph B66A.
(c) any cash flows arising from the contracts in the group at that date.
39 For insurance contracts acquired in a transfer of insurance contracts or in a business combination within the scope of AASB 3, an entity shall apply paragraph 38 in accordance with paragraphs B93–B95F B95.

Contractual service margin (paragraphs B96–B119B B119)

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44 For insurance contracts without direct participation features, the carrying amount of the contractual service margin of a group of contracts at the end of the reporting period equals the carrying amount at the start of the reporting period adjusted for:
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(e) the amount recognised as insurance revenue because of the transfer of insurance contract services in the period, determined by the allocation of the contractual service margin remaining at the end of the reporting period (before any allocation) over the current and remaining coverage period applying paragraph B119.
45 For insurance contracts with direct participation features (see paragraphs B101–B118), the carrying amount of the contractual service margin of a group of contracts at the end of the reporting period equals the carrying amount at the start of the reporting period adjusted for the amounts specified in subparagraphs (a)–(e) below. An entity is not required to identify these adjustments separately. Instead, a combined amount may be determined for some, or all, of the adjustments. The adjustments are:
(b) the change in the amount of the entity’s share of the change in the fair value of the underlying items (see paragraph B104(b)(i)), except to the extent that:
(ii) the decrease in the amount of the entity’s share of a decrease in the fair value of the underlying items exceeds the carrying amount of the contractual service margin, giving rise to a loss (see paragraph 48); or
(iii) the increase in the amount of the entity’s share of an increase in the fair value of the underlying items reverses the amount in (ii).
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(e) the amount recognised as insurance revenue because of the transfer of insurance contract services in the period, determined by the allocation of the contractual service margin remaining at the end of the reporting period (before any allocation) over the current and remaining coverage period, applying paragraph B119.
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| Paragraphs 47–48 and 50 are amended. New text is underlined and deleted text is struck through. |

Onerous contracts

47 An insurance contract is onerous at the date of initial recognition if the fulfilment cash flows allocated to the contract, any previously recognised insurance acquisition cash flows and any cash flows arising from the contract at the date of initial recognition in total are a net outflow. Applying paragraph 16(a), an entity shall group such contracts separately from contracts that are not onerous. To the extent that paragraph 17 applies, an entity may identify the group of onerous contracts by measuring a set of contracts rather than individual contracts. An entity shall recognise a loss in profit or loss for the net outflow for the group of onerous contracts, resulting in the carrying amount of the liability for the group being equal to the fulfilment cash flows and the contractual service margin of the group being zero.
48 A group of insurance contracts becomes onerous (or more onerous) on subsequent measurement if the following amounts exceed the carrying amount of the contractual service margin:
(a) unfavourable changes relating to future service in the fulfilment cash flows allocated to the group, arising from changes in estimates of future cash flows and the risk adjustment for non-financial risk relating to future service; and
(b) for a group of insurance contracts with direct participation features, the decrease in the amount of the entity’s share of a decrease in the fair value of the underlying items.
Applying paragraphs 44(c)(i), 45(b)(ii) and 45(c)(ii), an entity shall recognise a loss in profit or loss to the extent of that excess.
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