talanx group annual report 2011 en
talanx group annual report 2011 en
talanx group annual report 2011 en
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154<br />
Financial statem<strong>en</strong>ts Notes<br />
G<strong>en</strong>eral information<br />
Talanx Group. Annual Report <strong>2011</strong><br />
Accounting principles<br />
and policies<br />
Segm<strong>en</strong>t <strong>report</strong>ing Consolidation,<br />
business combinations<br />
Non-curr<strong>en</strong>t assets held for<br />
sale and disposal <strong>group</strong>s<br />
The provision for premium refunds is constituted in life insurance for obligations that relate to the<br />
surplus participation of policyholders and that have not yet be<strong>en</strong> definitively allocated to individual<br />
insurance contracts on the balance sheet date. It consists of amounts allocated to policyholders in<br />
accordance with national regulations or contractual provisions and amounts resulting from temporary<br />
differ<strong>en</strong>ces betwe<strong>en</strong> the IFRS consolidated financial statem<strong>en</strong>t and the local <strong>annual</strong> financial<br />
statem<strong>en</strong>ts (provision for deferred premium refunds, shadow provision for premium refunds)<br />
that will have a bearing on future calculations of surplus distribution. In particular for German life<br />
insurers, the applicable regulatory requirem<strong>en</strong>ts of the Insurance Supervision Act (VAG) and the<br />
Decree on Minimum Premium Refunds in Life Insurance need to be observed.<br />
We regularly subject all technical provisions to an adequacy test in accordance with ifrs 4. If curr<strong>en</strong>t<br />
experi<strong>en</strong>ce indicates that future income will not cover the expected exp<strong>en</strong>ses, the technical<br />
provisions are adjusted in income or an additional provision for anticipated losses is established<br />
after writing off the deferred acquisition costs. We review the adequacy of the b<strong>en</strong>efit reserve on the<br />
basis of curr<strong>en</strong>t assumptions as to the actuarial bases.<br />
Shadow accounting<br />
IFRS 4.30 allows unrealised, but recognised profits and losses (deriving predominantly from changes<br />
in the fair value of assets classified as “available for sale”) that are <strong>report</strong>ed in equity (Other Compreh<strong>en</strong>sive<br />
Income, OCI) to be included in the measurem<strong>en</strong>t of technical items. This may affect the<br />
following items: deferred acquisition costs, pres<strong>en</strong>t values of future profits (PVFPs), provisions for<br />
maturity bonuses of policyholders, provisions for deferred costs and the provision for premium refunds.<br />
The aforem<strong>en</strong>tioned asset and liability items and their corresponding amortisation schemes<br />
are determined on the basis of the estimated gross margins (EGMs). The latter are modified accordingly<br />
following subsequ<strong>en</strong>t recognition of unrealised gains and losses. The resulting adjustm<strong>en</strong>ts<br />
are carried as so-called shadow adjustm<strong>en</strong>ts to the affected items. The contra item in equity (OCI) is<br />
<strong>report</strong>ed analogously to the underlying changes in value.<br />
Technical provisions in the area of life insurance insofar as the investm<strong>en</strong>t risk<br />
is borne by policyholders<br />
In the case of life insurance products under which policyholders bear the investm<strong>en</strong>t risk themselves<br />
(e.g. in unit-linked life insurance), the b<strong>en</strong>efit reserves and other technical provisions reflect<br />
the fair value of the corresponding investm<strong>en</strong>ts; these provisions are recognised separately. We<br />
refer the reader to the explanatory notes on the asset item “Investm<strong>en</strong>ts for the account and risk of<br />
holders of life insurance policies,” page 148.