2022-23 SGI CANADA Annual Report
This provision is refined on a continual basis as prior fiscal year claims are settled and additional claims are reported
and settled. There may be significant time delays from the occurrence of the insured event and when it is reported.
If this occurs near the year-end date, estimates are made as to the value of these claims based on information
known to the Corporation. As well, uncertainty exists for reported claims that are not settled, as all necessary
information may not be available. Thus, with the level of uncertainty involved in the claim process until the final
settlement occurs, current reserves may not be sufficient. The provision has been calculated including the impact
of discounting. Any adjustments to these estimates, both positive (a redundancy) and negative (a deficiency) are
included in the provision for unpaid claims and are reflected as claims incurred in the current year's Consolidated
Statement of Operations.
Unpaid claims recoverable from reinsurers
Unpaid claims recoverable from reinsurers include amounts for expected recoveries related to unpaid claim
liabilities, as well as the portion of the reinsurance premium that has not yet been earned. Amounts recoverable
from reinsurers are estimated in a manner consistent with claim and claim adjustment expense reserves, and
are reported in the Consolidated Statement of Financial Position. The ceding of insurance does not discharge
the Corporation's primary liability to its insureds. An estimated allowance for doubtful accounts is recorded on the
basis of periodic evaluations of balances due from reinsurers, reinsurer solvency, management's experience and
current economic conditions.
Valuation of accounts receivable
The Corporation applies the simplified approach to providing for expected credit losses as prescribed by IFRS 9,
which permits the use of lifetime expected loss provision for all trade receivables. Provisions for credit losses are
maintained in an allowance account and are regularly reviewed by the Corporation. Amounts are written off once
reasonable collection efforts have been exhausted.
Employee future benefits
The Corporation's benefit expense for its defined benefit pension plan and defined benefit service recognition
plan is calculated by the Corporation's external benefits actuary utilizing management's best estimate of critical
assumptions. These critical assumptions consist of: expected plan investment performance, salary escalation, age at
retirement, mortality of members and future pension indexing. Management reviews and adjusts these assumptions
as required on an annual basis. Actuarial gains and losses regarding the pension obligation or the investment returns
are recorded as other comprehensive income on the Consolidated Statement of Operations.
The end-of-period discount rate is determined at each year end using market rates of high-quality debt instruments
with cash flows that match the timing and amount of expected benefit payments.
Further details of the Corporation's defined benefit plans are contained in note 19 to the consolidated financial statements.
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