ECIC IR 2023

ANNUAL Financial Statements for the year ended 31 March 2023

E

D

H

S

I

L I

N

B

2

0

A

0

T

S

1

E

E X P O R T C R E

L T D

O C

A S

C

R I

D I

F

T

A

I

N

H

S

T

U

U

R

O

A

S

N

F

C

O

E

N

C

O

O

I

R

T

P

A

O

R

Accounting Policies

c) A corporate finance contract is a contract where repayment of the covered loan amount is the responsibility of the sponsor of the transaction. Recovery is deemed probable when the following conditions have been met: c There is a signed salvage restructuring agreement; c The payment on the revised agreement is up to date; and c The loan covenants on the policy are met. 1.5.6 Liability adequacy test The net liability recognised for insurance contracts is tested for adequacy by assessing the expected future cash flows over the remaining contractual term and comparing this amount to the carrying value of the liability. Where a shortfall is identified, an additional provision for unexpired risk is made and the Corporation recognises the deficiency in the statement of comprehensive income in that year. Liability adequacy tests are performed at reporting date. 1.5.7 Solvency capital requirement In terms of the Prudential Standard of Financial Soundness of Insurers, the Corporation is required to maintain sufficient capital to compensate for the different aspects of risk ranging from insurance risk to operational risk, as well as market risk and credit risk. Reinsurance assets relating to outstanding claims The Corporation cedes insurance risk in the normal course of business. Reinsurance assets represent balances due from reinsurance companies. Amounts recoverable from reinsurers are estimated in a manner consistent with the outstanding claims provision or settled claims associated with the reinsurer’s policies and are in accordance with the related reinsurance contract. Reinsurance assets are reviewed for impairment at each reporting date, or more frequently, when an indication of impairment arises during the reporting period. Impairment occurs when there is objective evidence as a result of an event that occurred after initial recognition of the reinsurance asset that the Corporation may not receive all outstanding amounts due under the terms of the contract and the event has a reliably measurable impact on the amounts that the Corporation will receive from the reinsurer. The impairment loss is recorded in the statement of comprehensive income. Reinsurance recoveries on claims paid Reinsurance recoveries are recognised in the statement of comprehensive income as a reduction in claims paid when they are received in according to the terms of the relevant contract. Commission / acquisition cost received from re-insurer Commission received from the re-insurer on buying reinsurance is recognised in the statement of financial position and is amortised over the period of the re-insurance cover. Reinsurance premiums Gross outward reinsurance premiums are recognised in the statement of comprehensive income as a reduction in written premiums on the earlier of the date when premiums are payable or when the policy becomes effective. The outward reinsurance premiums comprise the premiums on reinsurance contracts entered into during the year, irrespective of whether they relate in whole or in part to a later accounting period. Premiums are recognised in the period in which conditions to the policy are met. Unearned reinsurance premiums (asset) Unearned reinsurance premiums are those proportions of re-insurance premiums written in the current and past financial years which are attributable to subsequent years. The earned portion is recognised as a reduction in revenue, based on the exposure profile of risks underwritten. The asset is computed separately for each re-insurance contract. 1.5.8 Insurance ceded to reinsurance counterparties Ceded reinsurance arrangements do not relieve the Corporation from its obligations to policyholders.

YOUR EXPORT RISK PARTNER

30