Annual Report 2012 - Swiss Life

97 Market Consistent Embedded Value (MCEV)
5.2 Taxation and Legislation
Tax assumptions for the projection of annual results have been set in line with the local tax regime.
Tax losses carried forward are considered. Taxation rules are based on individual companies’ total
results. Tax impact of future new business has not been allowed for. The following table 5.2.1 shows
the corporate tax rates applied.
5.2.1 Tax assumptions
2012 2011
Switzerland 21.1% 21.1%
France 34.4% 1 34.4%
Germany 32.6% 32.6%
Luxembourg 22.0% 22.0%
Liechtenstein 13.0% 13.0%
Singapore 18.0% 18.0%
1
Following French legislation the tax rate assumption applied for 2013 and 2014 is 36.1%.
5.3 Operating Assumptions
Non-economic assumptions such as mortality, morbidity and lapse rates have been determined by
the respective business units based on their best estimate as at the valuation date. Best estimate
assumptions are set by considering past and current experience.
Expense assumptions are reconciled with past and current experience. They do not account for future
cost reductions. Projected expenses are subject to inflation. All the expected expense overruns affecting
the covered business, such as overhead expenses and development costs in new markets have been
allowed for in the calculations. Corporate costs are included in the expenses of market units by means
of a “look-through” procedure (see section 4.6).
Swiss Life – Annual Report 2012