Description:
Unbundling (Bifurcation)
For accounting purposes, unbundling is the separation of a contract into financing and risk transfer components.
Underwriting risk
Includes claims, expense and reserving risks and the risks associated with guarantees and options embedded in policies.
Underwriting year basisAccounting figures -for instance, claims incurred- are based on the contracts underwritten in the accounting period. [Related definitions: Claims development triangle, Claims provision]
Use test
A supervisory process to access whether the internal model, its methodologies and results, are appropriately embedded into the insurer's risk strategy, risk management, and operational processes.
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