“adjusted IFRS value”, in respect of a policyholder fund or the risk policy fund, means an amount, which may not be less than zero, and which must be calculated in accordance with the formula-

I = (L + LIC + DL + PF) – PT– DC + DR

in which formula-

(a)     “I” represents the amount to be determined;

(b)     “L” represents, in respect of policies of the insurer, the aggregate amounts of-

(i)      insurance contract liabilities;

(ii)     investment contract liabilities; and

(iii)    reinsurance contract liabilities,

reduced by-

(aa)   insurance contract assets;

(bb)   reinsurance contract assets, and

(cc)   liability for incurred claims contemplated in paragraph (c),

the amounts of which are determined in accordance with IFRS as annually reported by the insurer to shareholders in the audited annual financial statements: Provided that any amount that is payable to or receivable from a cell owner, referred to in the definition of ‘cell structure’ in section 1 of the Insurance Act, in respect of “third party risks” as defined in that section of that Act, must be disregarded: Provided further that the amount may not be less than zero;

[Paragraph (b) amended by section 32(1)(a) of Act 17 of 2023 effective on 1 January, 2023 and applicable in respect of years of assessment commencing on or after that date]

(c)     “LIC” represents the amount of the liability for incurred claims determined in accordance with IFRS 17 in respect of the policies of the insurer, net of amounts recognised in reinsurance contracts for liabilities for incurred claims, which are determined in accordance with IFRS as annually reported by the insurer to shareholders in the audited annual financial statements, in respect of policies allocated to that fund;

(d)     “DL” represents for a policyholder fund the amount of deferred tax liabilities, determined in accordance with IFRS as annually reported by the insurer to shareholders in the audited annual financial statements, in respect of assets allocated to that policyholder fund;

(e)     “PF” represents the amount calculated in terms of subsection (14) if a phasing-in amount is determined in terms of subsection (15)(a);

(f)      “PT” represents the amount calculated in terms of subsection (14) if a phasing-in amount is determined in terms of subsection (15)(b);

(g)     “DC” represents for a policyholder fund the amount of deferred acquisition costs determined in accordance with IFRS as annually reported by the insurer to shareholders in the audited financial statements; and

(h)     “DR” represents for a policyholder fund the amount of deferred revenue determined in accordance with IFRS as annually reported by the insurer to shareholders in the audited financial statements;

[Definition of “adjusted IFRS value” (insertion by section 47(1)(a) of Act 43 of 2014 deleted by section 101(1)(a) of Act 15 of 2016) inserted by section 50(1)(a) of Act 15 of 2016 and substituted by section 46(1)(a) of Act 17 of 2017 and by section 15(1)(a) of Act 20 of 2022 effective on 1 January, 2023 and applicable in respect of years of assessment commencing on or after that date]