MfaDs and PfaDs under IFRS-17

TiffanyTiffany
in OSFI.MemoAA

Looking through the Table of Contents in OSFI's Memo to the AA, there's sections for PfaDs/MfaDs for claims, reinsurance, interest rate, etc.

I just wanted to confirm if all PfaDs/MfaDs are from IFRS-4 and no longer on the syllabus? It's really hard to tell when there's all sorts of syllabus content that's not switched over to IFRS-17.

Under IFRS-17:
PfaDs for claims is now incorporated into the Risk Adjustment.
PfaDs for reinsurance would be taken into account by selecting a different RA for ceded claims and direct/assumed claims.
PfaDs for interest rate is now implicitly included in the discount rate used for LIC/LRC.

Is my above understanding under IFRS-17 correct?

Comments

  • Staff-T1Staff-T1

    Yeah everything you mentioned is correct, except that PFADs for reinsurance is now implicit in the FCF and not the RA

  • NycxBattleNycxBattle
    edited April 6

    I don't have close to no knowledge of IFRS4

    What is the difference between MfADs and PfADS

    When I tried to google this, I only found the following:
    MfADs = margins for adverse deviations
    PfADs = Provisions for Adverse Deviation

    But what is the difference?

  • Staff-T1Staff-T1

    They are basically the same thing just under the old standard

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