kontinuita - Komunálna Poisťovňa

NOTES TO
THE FINANCIAL
STATEMENTS
insured event is reported. Liabilities in respect of insurance
benefits are estimated as follows:
Provision for insurance benefits
The amount of the provision is determined as the sum
of reserves calculated for individual insured events and
includes the expected claim handling costs. If the insurance
benefit is provided in form of a pension, the
reserve is calculated by using actuarial methods.
Life insurance provision
The life insurance provision is calculated by using actuarial
methods for life insurance as the sum of provisions
calculated separately for each insurance
contract. Its amount for an individual contract is set as
the sum of the mathematical provision, the potential
provision for administrative costs, and the provision for
profit share. The reinsurer does not participate in setting
up the life insurance provision because, according
to the effective reinsurance terms, only the risk-bearing
part of the insurance premium is reinsured.
When calculating provisions, the Company uses the
same mortality tables and the same technical interest
rate as when determining insurance premium tariffs.
The Company calculates and books the zillmerised
provision. Negative provision balances of individual life
insurance contracts are zeroed.
(iii) Long-term insurance contracts without fixed contractual
terms – unit-linked contracts
These contracts insure events related to human life
(such as death or reaching certain age) over a long period.
The written premium is recognized as revenue when
the premium is paid.
The amount of liabilities from these insurance contracts
is adjusted for the change in the fair value of
units to which the liability is linked, and is reduced by
administrative fees and surrender charges, which are
the insurance company’s income, and by withdrawals
accomplished.
A unit-linked insurance contract is an insurance contract
with an embedded derivative linking insurance
benefits to the value of units of an investment fund.
This embedded derivative meets the definition of an insurance
contract; therefore, it is not separated from
the host insurance contract and is not accounted for
separately.
(iv) Investment contracts with DPF – OPÚ
In case of these contracts, the written premium is recognized
when the premium is paid.
The amount of liabilities from these insurance contracts
is adjusted for the credited profit shares and is
reduced by administrative fees and surrender charges,
which are the insurance company’s income, and by
withdrawals accomplished.
OPÚ long-term insurance contracts are investment
contracts with a DPF, where the policyholder has the
right to receive additional profit share in form of interest,
the amount of which depends on the Company
management’s decision based on income from investments
and the Company’s profit from the portfolio of
these contracts.
b) Embedded derivatives in insurance contracts
Embedded derivatives in insurance contracts that
meet the definition of an insurance contract or options
to surrender insurance contracts for a fixed amount (or
an amount based on a fixed value and an interest rate)
are not separately recognized. All other embedded derivatives
are recognized separately and stated at fair
value through profit or loss if they are not closely related
to the host insurance contract.
KONTINUITA ANNUAL REPORT 113