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Tokio Marine Safety Insurance (Thailand) Public Company Limited
Notes to the Financial Statements

Tokio Marine Safety Insurance (Thailand) Public Company Limited
For the year ended 31 December 2023
Notes to the Financial Statements
For the year ended 31 December 2023

There is a modification of the general measurement model called the ‘variable fee approach’ for
certain contracts written by life insurers where policyholders share in the returns from underlying
items. When applying the variable fee approach, the entity’s share of the fair value changes of
the underlying items is included in the CSM. The results of insurers using this model are therefore
likely to be less volatile than under the general model.

Adopting TFRS 17, the Group can choose to recognise any cumulative negative impacts
from insurance contract liabilities in retained earnings by applying the straight-line method,
using no more than a three-year period from the transition date.

The new rules will affect the financial statements and key performance indicators of all entities
that issue insurance contracts or investment contracts with discretionary participation features.
The Company’s management is currently assessing the impacts from these standards.

4 Accounting policies

4.1 Product classification

Insurance contracts are contracts which the Company (the insurer) accepts significant insurance risk
from another party (the policyholders) by agreeing to compensate the policyholder if a specified
uncertain future event (the insured event) adversely affects the policyholder. However, a contract that
exposes the issuer to financial risk without significant insurance risk is not an insurance contract.
Short term insurance contracts are insurance contracts which provide contractual coverage period
less than 1 year or insurance contracts which the Company can cancel or increase/decrease of
premium including of change in other benefits throughout the contract term.

Long term insurance contracts are insurance contracts providing coverage for dread disease,
accident insurance, or health insurance with contractual term over than 1 year which the Company
cannot cancel and cannot increase/decrease of premium including of change in other benefits
throughout the contract term or insurance contracts providing coverage for dread disease, accident
insurance, or health insurance with contractual term less than or equal to 1 year but auto-renewal
which the Company cannot cancel and cannot increase/decrease of premium including of change in
other benefits throughout the contract term.
4.2 Liability adequacy test

The Company performs a test of adequacy of recognised insurance liabilities at the end of each
reporting period, using current estimates of future cash flows under its insurance contracts. If that
assessment shows that the carrying amount of its insurance liabilities is inadequate in the light of
the estimated future cash flows, the liabilities are increased by the entire deficiency and the identified
deficiency shall be recognised in profit or loss.

4.3 Cash and cash equivalents

In the statements of cash flows, cash and cash equivalents includes cash on hand, deposits held at
call, short-term highly liquid investments with maturities of three months or less from acquisition date.

4.4 Premium receivable

Premium receivable is carried at anticipated realisable value. An estimate is made for doubtful
accounts based on a review of all outstanding amounts at the period end. Bad debts are written
off during the period in which they are identified. The Company provides allowance for doubtful
accounts based on the review of current status of any long past due debts or anticipated uncollectible
balances, on the basis of collection experiences.

128 | รายงานประจำาปี 2566 | ANNUAL REPORT 2023 11