Investment Return
In the wiki, IR = NII - provision for credit losses
Based on the source, instructions for Page 40.74 – Investment Return
The total investment return on line 499 should correspond to the Statement of Profit or Loss (page 20.22, line 300)
looking at 20.22 line 300 and the instructions IR (line 300) = line 220 + 230 + 240 + 250 and line 250 being provision for credit losses.
Shouldn't IR = NII + provision for credit losses? this would be consistent with 20.22
follow up question, does that mean NII = line 220 + 230 + 240?
Comments
Someone emailed me recently about this exact question.
I missed the line that said line 250 for "provision for credit losses" should be added because it looks to me like that item should reduce investment return. The statement blanks provided don't have any numbers so I was assuming this value would be entered as a positive and would therefore be subtracted.
But if "provision for credit losses" should be added, then I guess it would be entered as a negative value? I don't think the instructions actually explain what "provision for credit losses" means so I'm assuming it's a reduction in investment income to account for the possibility that the insurer will not receive their earned investment income from the entity that owes it to them?
In any case, whether you add or subtract the value on that line, I believe "provision for credit losses" should reduce investment income.
I'll try to see if I can take a look at a filled-up P&C annual return to determine the sign next week (hoping I remember)