Annual Report IPF 2021 - Flipbook - Side 33
INDUSTRIENS PENSIONSFORSIKRING A/S
ANNUAL REPORT 2021
These considerations include the fact that, under certain
conditions, tax assets not utilised to offset positive tax on
yields of certain pension-scheme assets during the first
five calendar years after the tax asset was created will be
repaid to the company by the Danish Tax Agency
(Skattestyrelsen). Furthermore, a negative individual tax
on yields of certain pension-scheme assets is recognised
under tax assets. In years with a negative addition of
interest to the market-rate scheme, this tax is recognised
under life-assurance provisions, and it will be offset
against positive additions of interest in future years.
Life-assurance provisions at average rate
Life-assurance provisions at average rate are calculated at
market value with the technical basis notified to the Danish
Financial Supervisory Authority. Provisions are calculated
as the present value of the expected future payments for
current insurance contracts, based on a discounting yield
curve and assumptions on insurance risks (mortality rate
and disability, etc.) and costs, fixed at best estimate. The
yield curve defined in the Executive Order on Presentation
of Financial Statements is applied as the discount rate.
Industriens Pension applies the EIOPA yield curve without
volatility adjustments.
Accruals and deferred income
Prepayments recognised under assets comprise costs
incurred that relate to subsequent financial years. The
items are measured at amortised cost, and this usually
corresponds to nominal value.
Subordinated loan capital
Subordinated loan capital includes excess capital and
other subordinated loan capital, and constitutes risk
capital provided by the members. Excess capital
comprises special bonus provisions type B, and interest is
accrued at the same rate as equity, whereas other
subordinated loan capital comprises special bonus
provisions type A, with interest accrued on market terms.
Subordinated loan capital is included in own funds to
meet the solvency capital requirement.
Provisions for insurance and investment
contracts
Premium provisions
Relate to sickness and accident insurance and cover the
present value of expected future payments concerning
claims and costs of insurance events which can be
expected to occur after the end of the financial year.
When calculating the life-assurance provisions, a risk
margin has been added, which constitutes the amount
likely to be payable to a buyer of life-assurance products in
order for the buyer to be willing to accept the risk that the
costs associated with settling the portfolio deviate from
the calculated present value of the expected cash flows.
The provisions contain an estimated amount to cover
benefits from insured events occurring in the financial year
but not reported at the end of the financial year.
In the notes, life-assurance provisions are divided into
guaranteed benefits and into individual and collective
bonus potentials. Guaranteed benefits include
commitments to pay the benefits attached to the pension
scheme.
Guaranteed benefits are calculated as the present value of
the expected future benefits, as well as the present value
of the expected future expenses for administration of the
insurance policy, less the present value of the agreed
future premiums. The risk margin is added to this.
Individual bonus potentials include the ability to provide a
bonus in the future and are calculated as members’ savings
less the present value of the guaranteed benefits.
NOTES
The bonus potential cannot be negative. Collective bonus
potentials include the members’ share of realised results,
and these are allocated collectively to future bonuses.
Provisions for bonus and premium rebates
Life-assurance provisions at market rate
Provisions for bonus and premium rebates are amounts in
sickness and accident insurance provided for the policy
holders owing to a favourable result in the financial year or
previous years.
Life-assurance provisions at market rate are calculated at
the fair value of the related assets.
Deferred tax liabilities
The provisions also include provisions for claims
outstanding and bonus provisions for the group life
scheme for death, disability and critical illness.
Deferred tax liabilities are calculated on the basis of
temporary differences between accounting and tax values
of assets and liabilities included in the collective tax basis
(basis for tax on yields of certain pension-scheme assets at
institution level).
Provisions for claims outstanding amount to the present
value of expected future payments pertaining to
insurance events occurring under the group life scheme
as well as bonus provisions for this scheme, denoting
saved-up profits for use in reducing future premiums.
Deferred tax on yields of certain pension-scheme assets is
offset against deferred tax assets relating to tax on yields of
certain pension-scheme assets.
Debt to credit institutions
Provisions for claims outstanding for sickness
and accident insurance
These include insurance benefits due but not yet paid,
including bonuses as well as an estimate of expected
payments pertaining to insurance events occurring in the
financial year or earlier under the sickness and accident
scheme.
Provisions for claims outstanding settled by regular
payments have been calculated as the present value of
expected future payments, including costs, applying the
yield curve defined in the Executive Order on
Presentation of Financial Statements.
Risk margin on sickness and accident insurance
The risk margin includes the amount likely to be payable
to a buyer of sickness and accident insurance products in
order for the buyer to be willing to accept the risk that
the costs associated with settling the portfolio deviate
from the calculated present value of the expected cash
flows.
Debt to credit institutions includes debt related to
commitments to repurchase securities in repurchase
agreements. The debt is measured at fair value.
Other debt
Derivative financial instruments are measured at fair value.
Derivative financial instruments with negative fair value are
included under other debt. Other amounts payable included
under other debt are measured at amortised cost, which
normally corresponds to the nominal value.
Contingent liabilities
Commitments regarding pledges on investments,
guarantees and sureties etc. on non-insurance matters are
disclosed in a note to the annual report (see note 16).
Key figures and financial ratios
The company’s financial ratios have been calculated in
accordance with the regulations in the Executive Order on
Presentation of Financial Statements.
33
