In topic 4, the focus is on categorizing insurance types, specifically regarding the portfolio management under TFRS 17. The key requirement is that portfolios must be managed together and exhibit similar risk nature, such as short-term versus long-term durations,

This chapter will cover two key issues: one regarding Coverage Period and Coverage Term, and the other concerning the recognition date for coverage or calculation

Topic 2 is more critical to non-life insurance business than life insurance, with fronting business being slightly more emphasized. In this perspective, there are three stakeholders: a Policyholder Company (The company that buy insurance policies); a Fronting Company; and a Captive Insurance Company. These three companies can engage in a special form of transaction together that requires special attention and are brought for adjustment under TFRS 17.

It is common practice for each financial reporting standard to delineate the scope of insurance contracts, defining what falls within and outside its purview. In TFRS 17, the standard specifies its own boundaries, detailing which components are subject to consideration under TFRS 17. For instance, it addresses the insurance component, the Non-Distinct Investment Component (NDIC), etc.

In interpreting TFRS 17, each business can develop Guidance Notes that are tailored to their specific operations. These Guidance Notes serve as benchmarks or initial guidelines rather than operational manuals. They allow businesses to adapt TFRS 17 principles according to their unique contexts, reflecting the principle-based nature rather than a rigid Rule-based approach.

TFRS 17 is a financial reporting standard written as Principle-based, meaning it provides broad principles on how standards should be formulated, allowing each company to interpret them differently.