CERTYNEX IFRS ACADEMY

A savings contract provides that on the policyholder's death the issuer pays the account balance plus an additional lump sum of 50,000 euros. In the scenario studied, which has commercial substance (case assumption), the additional sum clearly exceeds the present value of the fees collected by the issuer, which therefore suffers a loss in present value on this contract. What is concluded about the insurance risk?

It is significant: a scenario with commercial substance requires the issuer to pay significant additional amounts, with a loss in present value.

It is not significant: the issuer's possible loss should be measured at nominal value and not at present value, since the additional sum is paid at an uncertain date.

It is not significant, because the death scenario does not occur in most cases and the issuer collects fees every year of the contract.

It is significant as soon as an uncertain future event is specified, without examining the additional amounts paid or the issuer's loss.