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Muang Thai Life Assurance Public Company LimitedNotes to the financial statements for the year ended 31 December 2024Muang Thai Life Assurance Public Company LimitedNotes to the financial statementsFor the year ended 31 December 202417(c) Classification of insurance and investment contracts The Company issues contracts that transfer insurance risk or both insurance risk and financial risk.Insurance contracts are those contracts under which the Company accepts significant insurance risk from the insured by agreeing to compensate the policyholders or other beneficiaries if a specified uncertain future event adversely affects the policyholders. Once a contract has been classified as an insurance contract, it remains an insurance contract for the remainder of its lifetime, even if the insurance risk reduces significantly during this period.The Company defines significant insurance risk as the possibility of having to pay benefits on the occurrence of aninsured event that are at least significant level more than the benefits payable if the insured event did not occur.Investment contracts are those contracts that transfer financial risk with no significant insurance risk. The Companyissues only insurance contracts.The Company does not unbundle any insurance contracts as its accounting policy recognises all insurance revenues and expenses through the profit or loss.(d) Recognition and measurement of insurance contracts (1) Premiums due and uncollectedPremiums due and uncollected are stated at net realisable value.The allowance for doubtful accounts is assessed primarily on analysis of payment histories and futureexpectations of customer payments. Bad debts are written off when incurred.The credit term of premiums due and uncollected is 31 - 90 days. For individual policies that are overdue more than the grace period, the premiums due and uncollected will be settled by granting automatic policy loans which depend on the cash surrender value of those policies.(2) Long-term technical reserves Long-term technical reserves are liabilities for contractual benefits and claims that are expected to be incurred in the future. They are recorded when the premiums are recognised and are released when benefit and claims are incurred. Such reserves are measured using assumptions considered to be appropriate for the policies in force and calculated by internal actuary of the Company using an actuarial method of %u201cNet Level Premium Valuation%u201d based on assumptions for mortality, morbidity and discounted interest rate. The change in long-term technical reserves is recognised in profit or loss.(3) Loss reserves and outstanding claimsLoss reserves and outstanding claims are recorded for the estimated cost of all claims notified but not settled at the reporting date. Provision is also made for the cost of claims incurred, but not reported, based on the Company%u2019s experience and historical data. Differences between the provision for outstanding claims and subsequent revisions and settlements are included in profit or loss in later years.(4) Unearned premium reservesUnearned premium reserves are outstanding balances of written premiums for short-term insurancecontracts over the remaining period of coverage.Annual Report 2024 I Muang Thai Life Assurance PCL 153