Net equity of households in life insurance reserves (F.611)

5.106 Definition:

The sub-position net equity of households in life insurance reserves (F.611) consists of all transactions in net equity of households in life insurance reserves (AF.611) that is technical provisions against outstanding risks and technical provisions for with-profit insurance that add to the value on maturity of with-profit endowments or similar policies.

5.107 Sub-position AF.611 includes life assurance provisions, provisions for bonuses and rebates and technical provisions for life-assurance policies where the investment risk is borne by the policyholders as defined in articles 27, 29 and 31 of Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings.

5.108 Transactions in net equity of households in life insurance reserves consist of additions less reductions, which are to be distinguished from nominal holding gains or losses on the funds invested by insurance corporations (see paragraph 6.57.).

Additions consist of:

  1. actual premiums earned during the current accounting period;
  2. plus premium supplements corresponding to the income from the investment of the provisions, which is attributed to policy holding households;
  3. less service charges for life insurance.

Reductions consist of:

  1. amounts due to holders of endowment and similar insurance policies when they mature and amounts due to beneficiaries from deaths of insured persons;
  2. plus payments due on policies that are surrendered before maturity.

5.109 Life insurance reserves are financial assets of resident or non-resident households and liabilities of resident or non-resident insurance corporations.

In the case of a group insurance taken out, for example, by a corporation on behalf of its employees, the employees, but not the employer, are deemed to be the creditors, since they are considered as the real policy holders.