When unbundling the Boards decide that:
– an insurer should attribute cash flows to an investment component and to an embedded derivative on a stand-alone basis
– the amounts of consideration and discounts/ supplementsshould be attributed to the insurance component and/or service component in accordance with the revenue recognition proposals
– cash outflows related to more than one component should be allocated to those components on a rational and consistent basis, reflecting the costs that the insurer would expect to incur if it issued that component as a separate contract.
The Boards explore an earned premium approach for measuring and presenting premiums in the statement of comprehensive income.