2022-23 SGI CANADA Annual Report
Any such changes would be reflected in the Consolidated Statement of Operations for the period in which the
change occurred.
The provision for unpaid claims and unpaid claims recoverable from reinsurers are carried on a discounted basis
to reflect the time value of money. In that respect, the Corporation determines the discount rate based upon the
expected return of the bond investments that approximates the cash flow requirements of the unpaid claims. The
discount rate applied was 3.6% (2022 - 2.7%). The resulting carrying amounts are considered to be an indicator of fair
value as there is no ready market for trading insurance contract liabilities.
Structured settlements
The Corporation settles some long-term disability claims by purchasing annuities for its claimants from various life
insurers. The settlements legally release the Corporation from its obligations to the claimants. Consequently, neither
the annuities purchased nor the claim liabilities are recognized on the Consolidated Statement of Financial Position.
However, as part of the settlement, the Corporation provides a financial guarantee to the claimants in the event
the life insurers' default on the scheduled payments and is thus exposed to credit risk to the extent any of the life
insurers fail to fulfil their obligations. As at March 31, 2023, no information has come to the Corporation's attention
that would suggest any weakness or failure in the life insurers from which it has purchased annuities. The net
present value of the scheduled payments as of the year-end date is $59.4 million (2022 - $62.8 million). The net risk
to the Corporation is the credit risk related to the life insurance companies that the annuities are purchased from. No
defaults have occurred, and the Corporation considers the possibility of default to be remote.
11. Deferred Policy Acquisition Costs (DPAC)
DPAC, beginning of the year
Acquisition costs deferred during the year
Amortization of deferred acquisition costs
Change in premium deficiency
DPAC, end of the year
12. Unearned Premiums
Gross
unearned premiums
2023
2022
(thousands of $)
2023
2022
$
132,565 $
122,875
265,112
242,349
(253,619)
(232,618)
(1,553)
$
142,505
$
(41)
132,565
(thousands of $)
Reinsurers' share of
unearned premiums
2023
Net
2022
2023
unearned premiums
2022
Unearned premiums,
beginning of the year
Premiums written
Premiums earned
$ 552,485 $ 515,646
$
42,069 $ 38,869 $ 510,416 $ 476,777
1,257,397
1,142,730
(1,204,455) (1,105,891)
86,128
(71,232)
72,598 1,171,269 1,070,132
(69,398) (1,133,223) (1,036,493)
Change in net unearned
premiums
52,942
36,839
14,896
3,200
38,046
33,639
Unearned premiums,
end of the
year
$ 605,427 $ 552,485 $ 56,965
$ 42,069
$ 548,462 $ 510,416
60 2022-23 SGI CANADA Annual ReportView entire presentation