Important Points for IC 26 - Life Insurance Finance Exam
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The International Accounting Standard Council (IASC) has developed uniform international financial reporting standards that are termed International Financial Reporting Standards or IFRS.
As per the directives issued by the Ministry of Corporate Affairs, all insurance companies are required to apply International Financial Reporting Standards (IFRS), w.e.f. 1st April 2012.
International Financial Reporting Standards (IFRS) has been prepared by the International Accounting Standard Council (IASC).
The main objective of IFRS 4 is to specify accounting for insurance contracts issued by insurers. It also specifies accounting for reinsurance contracts issued or held by an entity.
As per IFSR 4, an insurance contract is a contract under which one party (the insurer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policy holder if a specified uncertain future event (the insured event) adversely affects the policy holder.
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