kontinuita - Komunálna Poisťovňa

NOTES TO
THE FINANCIAL
STATEMENTS
to compensate him if a specified uncertain event (insured
event) has an adverse effect on him are classified
as insurance contracts. Insurance risk is significant if
the occurrence of an insured event forces the Company
to pay a significant amount that is 10% higher than in
case when the insured event would not occur.
Insurance risk is not identical to financial risk. Financial
risk relates to the possible future change in interest
rate, the value of a security, commodity price,
exchange rate, price index or rate, credit rating, credit
index or other variable that is independent of the contracting
parties. An insurance contract may also include
a certain financial risk. Investment contracts are
contracts where the transfer of financial risk from the
insured person to the Company is not significant.
A significant number of insurance contracts that the
Company has concluded contain a DPF (‘discretionary
participation feature’). This feature entitles the holder
to receive, as a supplement to guaranteed benefits, additional
benefits or bonuses that are contractually
based on:
• realized and/or unrealized investment returns on
a specific pool of assets held by the Company, or
• the profit or loss of the Company that issues the contract.
The Company recognizes a DPF contained in a contract
as a liability.
2.11 Insurance and investment contracts - classification
a) Recognition and measurement
Insurance contracts that the Company concludes are
classified into four categories, depending on the duration
of the contract and whether or not the contractual
terms are fixed.
(i) Short term insurance contracts
This category includes life and accident insurance contracts
with the insurance period up to five years.
Insurance contracts within the accident insurance
portfolio compensate the Company’s clients if their
health suffers damage as a result of injury
Short-term contracts in life insurance protect the
Company’s clients against consequences of events
(such as death or disability) which, in case of occurrence,
will affect the ability of the client or his family
members to maintain their current level of income.
Considering the share of the written premium from
this contract group on the Company’s total written
(0.15%), this group of contracts is an insignificant part
of the portfolio; therefore, it will not be analysed further
in these notes.
(ii) Long-term insurance contracts with fixed or guaranteed
contractual terms
Long-term insurance contracts insure events related
to human life (such as death, reaching certain age, serious
illness or disability) over a long period. They represent
mainly combined life insurance, dowry
insurance, old-age insurance, and also death, injury or
illness insurance over a period of at least five years.
Revenues
The written premium is recognized as revenue when
due and over the life of the policy. It is recognized in
gross amount before deducting insurance commissions.
Insurance benefits
Insurance benefits include payments upon reaching
certain age, pension benefits, payments of the surrender
value, death benefits, and profit share payments.
Payments upon reaching certain age and pension benefits
are recognized as an expense when due. Surrender
values are recognized as an expense when paid.
Death benefits are recognized as an expense when the
KONTINUITA ANNUAL REPORT 111