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What is an insurance risk?
Answer: Policies that do not transfer significant insurance risk should be accounted for as financial instruments instead of insurance contracts. IASB defines significant insurance risk as significant if, and only if, an insured event could cause an insurer to pay significant additional benefits in any scenario, excluding scenarios that lack commercial substance. This standard is actually weaker than GAAP, as GAAP requires that it is reasonably possible that the reinsurer may realize a significant loss
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