4All references in AASB 17 to insurance contracts also apply to:

4 All references in AASB 17 to insurance contracts also apply to:

(a) reinsurance contracts held, except:

(i) for references to insurance contracts issued; and

(ii) as described in paragraphs 60–70A.

(b) investment contracts with discretionary participation features as set out in paragraph 3(c), except for the reference to insurance contracts in paragraph 3(c) and as described in paragraph 71.

5 All references in AASB 17 to insurance contracts issued also apply to insurance contracts acquired by the entity in a transfer of insurance contracts or a business combination other than reinsurance contracts held.

6 Appendix A defines an insurance contract and paragraphs B2–B30 of Appendix B provide guidance on the definition of an insurance contract.

Aus6.1 In addition to considering the Appendix A definition of an insurance contract and paragraphs B2–B30, a public sector entity shall apply AASB 17 to an arrangement if, and only if, the arrangement is judged to:

(a) be enforceable;

(b) have an identifiable coverage period; and

(c) give rise to insurance contracts based on the indicators in paragraph Aus6.2(a) and the other considerations in paragraph Aus6.2(b).

Paragraphs E9–E17 of Appendix E provide guidance for determining whether an arrangement is enforceable and has an identifiable coverage period, which are pre-requisites for applying AASB 17. When an arrangement is not enforceable or does not have an identifiable coverage period, the arrangement is outside the scope of AASB 17.

Aus6.2 When a public sector entity arrangement is enforceable and has an identifiable coverage period, subject to paragraphs 8 and 8A the entity shall:

(a) apply the following indicators on a collective basis to judge whether the arrangement gives rise to insurance contracts that fall within the scope of AASB 17:

(i) the source and extent of funding – refer to guidance in paragraphs E18–E22; and

(ii) the similarity of risks covered and benefits provided – refer to guidance in paragraphs E23–E30; and

(b) in the event that the indicators in (a) are not definitive, apply the following other considerations on a collective basis to judge whether the arrangement gives rise to insurance contracts that fall within the scope of AASB 17:

(i) the management practices and assessment of financial performance applied – refer to guidance in paragraphs E31–E33; and

(ii) whether there are assets held to meet benefits – refer to guidance in paragraphs E34–E36.

8                        Paragraphs Aus14.1, Aus16.1 and Aus22.1 are added. Paragraphs 14, 16 and 22 are not amended but are included for reference.