Výročná správa 2009 - Komunálna Poisťovňa

(All amount are in thousands of Euros, unless stated otherwise)Long term insurance contracts without fixed contractual terms – unit-linked contractsThe Company uses the actuarial funding method for deferring the acquisition cost. Actuarialfunding uses coefficients in such a way that DAC represents the current amount of calculatedunpaid acquisition costs for each policy at the balance-sheet dated) Liability adequacy testAt the balance-sheet date, the Company performed a reserve adequacy test to verify that theamount of reserves net of the deferred acquisition costs is adequate. To perform the test, the currentbest estimate of future contractual cash flows and the related costs (such as administrativeexpenses and claim settlement costs, including income from investments backing such reserves)was used. The life insurance contract portfolio was split into groups (by technical interest rates).For each group, representative samples were chosen based on the status of the insurance portfolioand average parameters for each group (product). If an insufficiency is found, the Companysets up an additional reserve. The inadequacy of reserves is recognized in the income statementof the respective accounting period.Liabilities from long-term insurance contracts with guaranteed terms are determined on thebase of parameters applicable upon executing the contract. If the adequacy test requires use ofassumptions based on the latest development, such adjusted parameters are also used for thefollowing measurement of liabilities from insurance contracts.e) Reinsurance assetsContracts entered into by the Company with reinsurers under which the Company is compensatedfor losses on one or more contracts issued by the Company, and that meet the classificationrequirements for insurance contracts, are classified as reinsurance contracts held. Only therights arising from contracts where substantial insurance risk is transferred are recognized asreinsurance assets. Contracts that do not meet these classification requirements are classified asfinancial assets.Assets emerging from reinsurance contain short-term receivables from reinsurance (classifiedas loans and receivables), as well as long-term receivables from reinsurance (classifiedas reinsurance assets) which are connected with expected insurance events and performancesemerging from reinsured contracts. Assets emerging from reinsurance are valuated on the samebasis as appropriate reinsured insurance contracts and in compliance with conditions of individualreinsured contracts. Liabilities emerging from reinsured contracts represent mainly forwardedpremium, and are booked to costs in the appropriate accounting period.The Company assesses its reinsurance assets for impairment at the balance-sheet date. Ifthere is objective evidence that the reinsurance asset is impaired, then the Company reduces thecarrying amount of the reinsurance asset to its recoverable amount and recognizes that impairmentloss in the income statement. The Company gathers objective evidence that a reinsuranceasset is impaired using the same process adopted for financial assets held at amortized cost.The impairment loss is also calculated following the same method used for these financial assets.These processes are described in Note 2.7f) Receivables and payables related to insurance contractsReceivables and payables from insurance contracts include amounts due to and from insurancecontract holders, agents, and brokers. If there are objective indicatorsof a loss from a decreasein the value of insurance contract receivables, the accounting value of insurance receivables isdecreased by impairment, and the loss is accounted for in the profit and loss account. The Companyuses the same objective indicators as those described in Note 2.7.Ročná účtovná závierka a komentár I Company Accounts129