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KD Holding Group
Notes to Consolidated Financial Statements as at and for the year ended 31 December 2007
insurance term. The assumptions additionally take into
2.14.1.5 Long-term insurance contracts related to unit link
account an adjustment for unanticipated deviations.
Insurance contracts related to unit link cover insurance
Liabilities from damages incurred and reported and
from damages incurred but not reported represent
estimated amounts for:
- claim satteled, but not paid out as of the balance
sheet date;
- incurred but not reported claims as of the balances
sheet date (IBNR);
- incurred but insufficiently reported claims as of the
balance sheet date (IBNER);
- estimated expenses related to claims handling.
events referring to the life of the policyholder (in the
event of death and maturity) for a long term. An
insurance contract related to unit links is a contract
where the contractual payments are invested in units
of an investment fund selected by the policyholder. In
accordance with the accounting standard, the financial
and insurance parts of the contract do not need to be
separated and their accounting does not need to be
conducted separately. Liabilities arising from these
contracts are recognised at fair value to income.
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Liabilities for reported but not yet resolved claims are
recognised based on the estimated amount and are
regularly reviewed. Accident Insurance liabilities related
to incurred but not reported claims are determined: for
the accident insurance base on the statistical method,
for other life insurances base on the trend method.
The premium is recognised as revenue when the
policyholder's obligation to pay falls due. The Group
discloses its liabilities to its policyholders under
liabilities related to unit link insurance contracts tied to
investment fund units, in accordance with the relevant
individual insurance contract and product.
The liabilities also include expenses related to claims
handling in the lump sum amount of 2.5% of total
liabilities. Claims liabilities are not discounted. In
accordance with the reinsurance contract, the Group
discloses the reinsurance part of its liabilities attributable
to damages as reinsurance assets.
Liabilities are increased by premiums and decreased
by costs. Furthermore, the amount of liabilities takes
into account changes in the value of funds´ unit prices
and is reduced by the management fees and risk
premium. In the event of redemption, the liabilities
are reduced and the redemption value equals the
Group's liabilities less exit fees charged in the event of
redemption or upon termination of insurance.
It is assumed that the risk premiums charged in
an individual time period for expected population
mortality are adequate to cover the damage