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The present value of commitments is calculated by interpolation tothe nearest month. The present value of future premiums takes thestaggered payment of premiums into account.Provision for claimsThe provision for claims represents the total estimated cost (includingmanagement expenses) of settling all claims outstanding at the yearend,whether or not declared, after deduction of any amounts alreadypaid in respect of these claims.Provisions for claims are calculated separately for each claim, excludingall discounts and deductions.Provision for profit sharingThis provision represents amounts reserved for policy holders orbeneficiaries that have been set aside from any surplus or profitresulting from operations or a partial refund of premiums, made onthe basis of policy performance.Equalisation reserveThe equalisation reserve represents the provisions set aside, pursuantto legal or regulatory requirements, to enable the group to even out,or “equalise”, fluctuations in the claims rate or to cover special risks.The equalisation reserve at 31 December 2003 was established inaccordance with the Grand-Ducal regulation of 20 December 1991.Technical reserves for life insurance where the investment riskis assumed by the policy holderThis heading corresponds to the technical reserves set aside to covercommitments linked to the value of investments made in the context61of life insurance policies, where the value or return is dependent onthe performance of an index or the performance of investments onwhich the risk is assumed by the policy holder.11 (k) Provisions for other liabilities and chargesThe purpose of provisions for other liabilities and charges is to providecover for charges and accounts payable that, though clearly defined,were, on the date the balance sheet was closed, either not yet definiteor else definite but of an as yet unspecified sum or uncertain date.Provisions for the staff pension fund included under this heading arecalculated by book value method, in compliance with the mortalitytables and interest rates stipulated in the regulations.