R+V Versicherung AG Annual Report

Premiums and discounts were amortized
over the maturity period. The proportion
relating to future years was reported as
prepaid expenses.
Financial derivatives and structured
products were broken down into their
individual components and valued using
recognized actuarial methods based on
the Black/Scholes option pricing model.
Deposits with ceding undertakings and
debtors arising out of reinsurance operations
were reported at their nominal value.
Doubtful debtors were written down
directly.
Operating and office equipment was
valued at cost less straight-line depreciation.
Additions in the fiscal year were
generally written down pro rata. Low-value
assets were written off in full in their year
of acquisition.
The remaining assets are reported at
nominal value. Any necessary valuation
allowances were performed and deducted
from assets.
Technical provisions (unearned premiums,
mathematical provisions, claims outstanding
and other technical provisions) were
generally reported in line with information
provided by the cedents.
If no information was available, provisions
were estimated on the basis of contractual
conditions and the course of business to
date.
We made appropriate increases to a
number of our cedents’ loss provisions
for which we felt, given our experience,
that the amounts stated were too low.
Correspondingly, appropriate provisions
were also made for expected future loss
expenses.
The reinsurers’ share of provisions was
calculated in line with the conditions of
the reinsurance agreements.
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In contrast to their presentation in the past,
unearned premiums for life insurance
were reported separately and not together
with the mathematical provisions.
The equalization provision and similar
provisions (nuclear plants, pharmaceutical
risks) were calculated in accordance with
section 341 h HGB in conjunction with
sections 29 and 30 RechVersV.
Deposits received from reinsurers and
creditors arising out of reinsurance operations
were reported at their nominal value.
In line with section 6 a EStG, provisions
for pensions and similar obligations
were calculated using the present value
method based on the 1998 mortality tables
published by Prof. Dr. Klaus Heubeck,
using an interest rate of 6%.
The provision for early retirement was
formed in line with the principles laid down
in section 6 a EStG.
Partial retirement provisions cover both
unpaid remuneration and outstanding
top-up amounts for salaries and pensions.
An actuarial discount was made on the
top-up amounts. The 1998 mortality tables
published by Prof. Dr. Klaus Heubeck were
applied to the calculation of these amounts,
using an interest rate of 5.5%.
The provisions for jubilee benefits were
calculated using the 1998 mortality tables
published by Prof. Dr. Klaus Heubeck, using
an interest rate of 5.5%.
The carrying amount of the remaining
provisions is based on projected requirements.
The remaining liabilities were recognized
at the amounts payable on maturity.