The Group KD Group and KD Group dd

The Group KD Group Annual Report 2009
Notes to Consolidated Financial Statements as at and for the year ended 31 December 2009
Recourse receivables – recourse claims and assets acquired in the course of settlement of claims
The Group may sell items damaged in insurance cases, which it acquires in the course of resolving claims. The net
recoverable value of damaged items in claims which the Group manages to sell is recognised as revenue on the transaction
date (sale of the damaged item).
With the payment of claims, the rights in relation to those responsible for the damage are also transferred from the
policyholder to the Group (subrogation). The Group exercises that right through a recourse claim of partial or entire payment
of the insurance amount. In the event the insured person of compulsory liability insurance loses his or her rights (intoxication,
etc.) the Group demands recourse from the policyholder or the person responsible for the damage of the entire or partial
amount of the paid claims. Exercised recourse claims are recognised as insurance revenue. Expected recourse amounts are
also included in the calculation of liabilities for claims.
Recourse receivables are recorded separately, as exercised and unexercised, whereas the unexercised recourse receivables
are kept in off-balance sheet records and no impairment is recognised with regard to them.
Exercised recourse receivables are recorded separately as receivables insured by mortgage and other recourse receivables,
which is the basis for impairment calculation. Impairment of exercised recourse receivables and receivables on redemption is
based on individual estimation of the financial situation and liquidity of the insurance policyholder. Liquidity of debtors and
other receivables, except deferred tax receivables, are assessed individually; the same is true for impairment calculation.
Loans
The Group approves loans to its subsidiaries and associates in order to take advantage of synergy effects. The Group can
raise loans under more advantageous conditions than subsidiaries and associates because of its financial power and
intensive cooperation with financial institutions. Loans are approved at the rate of interest prescried for loans to related
parties. Loans are not insured.
In some cases, loans are also approved to companies outside the Group if there exists a mutual interest for business
cooperation. These loans are not insured, and the interest rate is higher.
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