FINMA Circular 2008/36 on the Operating Statement for Occupational Pension Provision

Laupenstrasse 27, 3003 Bern Tel. +41 (0)31 327 9100, Fax +41 (0)31 327 9101 www.finma.ch Circular 2008/36 Operating Statement for Occupational Pension Provision Operating Statement for Occupational Pension Provision Reference: FINMA-Circular 08/36 "Operating Statement for Occupational Pension Provision" Issued: 20 November 2008 Entry into force: 1 January 2009 Last amendment: 20 November 2008 Concordance: formerly BPV-RL 4/2007 "Operating Statement for Occupational Pension Provision" of 1 February 2007 Legal basis: FINMA Act Art. 7 para. 1 lit. b Insurance Supervision Act (VAG) Art. 37 Ordinance Art. 139–153 Occupational Pension Act (BVG) Art. 68 para. 3 and 4, 68a Occupational Pension Ordinance (BVV2) Art. 48b para. 2 Appendix: Treatment of Freedom of Movement Policies (FZP) in the Operating Statement BV

Addressees BankG VAG FINIG FinfraG KAG GwG Others Banks Financial groups and conglomerates Other intermediaries Insurers Insurance groups and conglomerates Intermediaries Asset managers Trustees Managers of collective assets Fund management Securities depository banks Non-depository securities houses Trading venues Central counterparties Central securities depositories Transaction registers Payment systems Participants SICAV KmG for KKA SICAF Custodian banks Representatives of foreign KKA Other intermediaries Self-regulatory organizations (SRO) SRO-supervised entities Audit firms Rating agencies X

Table of Contents 2/29 I. Starting Point Rz 1 II. Purpose Rz 2 III. Scope Rz 3 IV. Definitions Rz 4–17 A. Operating Statement BV Rz 4–6 a) Accounting Unit Rz 5 b) Withdrawals from BV Business Rz 6 B. Minimum Quota Rz 7–15 Special Cases Rz 8–15 C. Payout Quota Rz 16–17 V. Components of Reporting for Occupational Pension Provision Rz 18–33 A. Operating Statement BV Rz 20–25 a) Structure of the Operating Statement Rz 20 b) General Principles for Balance Sheet and Income Statement Rz 21–22 c) Integrated Assistance and Controls Rz 23–24 d) Adjustment of Formulas and Formats Rz 25 B. Accompanying Report Rz 26–27 C. Reference Table Rz 28 D. Disclosure Proposal Rz 29–32 E. Submission Deadline Rz 33 VI. Individual Components of the Operating Statement BV Rz 34–188 A. Income Statement Rz 39–71 B. Balance Sheet Rz 72–100

Table of Contents 3/29 Actuarial Part Rz 80–100 C. Technical Breakdown of the Result Rz 101–181 a) Savings Process (Art. 143 Ordinance) Rz 108–122 b) Risk Process (Art. 144 Ordinance) Rz 123–131 c) Cost Process (Art. 145 Ordinance) Rz 132–137 d) Payout Quota and its Use, Broken Down by Components Rz 138–140 e) Procedure for Positive Overall Balance (Art. 149 Ordinance) Rz 141–148 f) Procedure for Negative Overall Balance (Art. 150 Ordinance) Rz 149–155 g) Recapitulation and Allocation of Statement Result (Pos. 217 to 237) Rz 156–159 h) The Surplus Fund and its Update (Pos. 238 to 249) Rz 160–172 i) Update of the Inflation Reserve (Pos. 250 to 256) Rz 173–181 D. Information on Portfolio Structure in Occupational Pension Provision Rz 182–184 E. Accounting Principles Rz 185 F. Valuation Reserves for Occupational Pension Provision and Other Business Rz 186 G. Disclosure Schema Rz 187–188

4/29 I. Starting Point As part of the first revision of the Occupational Pension Act (BVG), the legislator introduced transparency requirements for private life insurers conducting occupational pension business (BV). The three main thrusts of these transparency requirements are: • the separation of a special restricted asset pool for occupational pension provision; • the preparation and disclosure of an annual operating statement for occupational pension provision (BV), which specifically includes a breakdown of administrative and distribution costs; • the issuance of rules for determining and distributing surplus participation, as well as the introduction of a minimum payout quota for surplus-eligible insurance plans in occupational pension provision. 1 II. Purpose This circular aims to concretize the supervisory regulations regarding the BV operating statement. It serves as support for completing the operating statement by explaining and specifying the legal provisions. 2 III. Scope The present provisions apply to all life insurance companies conducting occupational pension business. 3 IV. Definitions A. Operating Statement BV The BV operating statement is a separate statement based on the statutory financial statements according to the Code of Obligations. In a first step, the figures from the balance sheet and income statement are divided into the two areas "occupational pension provision" and "other business." In a second step, the "occupational pension provision" area is further divided into the two parts "subject to the minimum quota" and "not subject to the minimum quota." This second step represents the "technical breakdown of the result" and forms the core of the BV operating statement. The goal of this schema, designed specifically to comply with the minimum quota and which exactly matches the wording of the ordinance provisions, is to implement the statutory transparency requirements (see Chapter I "Starting Point"). 4 a) Accounting Unit The occupational pension business is to be regarded as an accounting-closed unit (e.g., accounting circle). The assets consist of the assets of the restricted asset pool for occupational pension provision as well as other assets. 5 b) Withdrawals from BV Business The withdrawal of assets must be at market or market-near values. This applies both to the possible withdrawal of the annual profit (share of the life insurance company) as well as to withdrawals against compensation, which are regulated in Art. 139 para. 2 Ordinance. The idea of the ordinance legislator was that upon withdrawals against compensation, on the one hand, compensation is made according to market values and, on the other hand, the book value of the transferred assets remains unchanged. 6 5/29 for the possible withdrawal of the annual profit (share of the life insurance company) as well as for withdrawals against compensation, which are regulated in Art. 139 para. 2 Ordinance. The idea of the ordinance legislator was that upon withdrawals against compensation, on the one hand, compensation is made according to market values and that, on the other hand, the book value of the transferred assets is not changed. B. Minimum Quota The BV operating statement includes both the business subject to the minimum quota and the business not considered for the minimum quota according to Art. 146 Ordinance. For the business subject to the minimum quota, Art. 147 para. 1 Ordinance regulates that the insurer must use at least 90% of the returns from the three processes (savings, risk, and cost processes) for the benefit of the policyholders. 7 Special Cases • Exceptions from the minimum quota: The contracts not subject to the minimum quota are exhaustively listed in Art. 146 Ordinance. 8 • Shares in shared contracts under foreign management: In co-participations, the leading insurer must subordinate its share of a shared collective insurance contract to the minimum quota, provided no own contractual surplus pool is provided. Co-participating insurers must assign their share to the non-MQ (minimum quota) liable portfolio if they apply at least the surplus determination of the leading insurer. Thus, the MQ parameters of the leading insurer are applied or they are possibly exceeded for the benefit of the policyholder. If co-participating insurers use lower approaches than the leading insurer, they must assign their share of the affected collective insurance contract to the MQ-liable portfolio. The policyholder thereby receives a surplus share on the co-participation share that may differ from that of the leading insurer. 9 10 • Inflation Reserve: The inflation reserve is to be fully assigned to the BV operating statement as part of occupational pension provision. It is to be distributed proportionally to the coverage capital of the affected contracts between the MQ-liable and non-MQ-liable insurance portfolio of occupational pension provision. 11 • Company Pension Scheme Whether insurance contracts with company pension schemes are subject to the MQ depends on whether they can claim an exception under Art. 146 Ordinance. 12 • Freedom of Movement Policies: Freedom of movement policies are fully assigned to the BV operating statement. 13 • Reinsurance Contracts with Autonomous Savings Process: Reinsurance contracts with an autonomous savings process are to be considered for the risk process and the cost process, provided they do not fall under Art. 146 para. 1 Ordinance. 14 • Contracts with Separate Profit Formula Accounting: 15 6/29 Contracts with separate profit formula accounting fall under Art. 146 para. 1 Ordinance. C. Payout Quota The payout quota represents the ratio between the returns from the three processes (savings, risk, and cost processes) effectively used for the benefit of the policyholders in the reporting year and the total returns of these three processes achieved in the reporting year. The payout quota must be at least 90% (minimum quota). 16 The payout quota must be set at least as high that the allocation to the surplus fund includes an interest return on the surplus fund according to the BVG minimum interest rate. This provision only needs to be applied up to a payout quota of 100%. 17 V. Components of Reporting for Occupational Pension Provision In connection with reporting for occupational pension provision, the FINMA requires the submission of the following documents: • Data collection folder for the BV operating statement • Accompanying report with attachments • Disclosure proposal 18 The data collection folder for the BV operating statement and the template for the accompanying report with the respective prior year figures are sent individually to the insurance companies. Additionally, the documents are made available on the FINMA website (www.finma.ch) as templates. 19 A. Operating Statement BV a) Structure of the Operating Statement The BV operating statement is divided into the following components: Data Entry Side

1. Income Statement (divided into occupational pension provision and other business) 1–2
2. Balance Sheet (divided into occupational pension provision and other business) 3–5
3. Technical Breakdown of the Result of Occupational Pension Provision (divided into contracts subject to the minimum quota and contracts not subject to the minimum quota) 6–10 3.1 Savings Process 6 3.2 Risk Process 6–7 3.3 Cost Process 7 3.4 Payout Quota and Overall Balance 7–8 3.5 Procedure for Positive Overall Balance 8 3.6 Procedure for Negative Overall Balance 8 3.7 Recapitulation and Allocation of Statement Result 9 20 7/29 3.8 Update of Surplus Fund and Payout 10 3.9 Update of Inflation Reserve 10
4. Information on Portfolio Structure of Occupational Pension Provision 11–14
5. Accounting Principles for Intangible Assets, Capital Investments, and Fixed Assets 15
6. Valuation Reserves for Occupational Pension Provision and for the Other Swiss Business 17–18
7. Disclosure Schema 19–21 b) General Principles for Balance Sheet and Income Statement The Swiss business is to be divided into occupational pension provision and other business. Data entry is to be made in the vertical blocks "Occupational Pension Provision" and "Other Business," and their addition in the vertical block "Swiss Business" occurs automatically. 21 The vertical block "Occupational Pension Provision" must correspond with the corresponding secondary statement, and the vertical block "Swiss Business" must correspond with the commercial law financial statements. If the structure in the commercial law financial statements does not correspond to that in the BV operating statement, a reconciliation must be presented in the accompanying report or in an appendix to the accompanying report. 22 c) Integrated Assistance and Controls As support for completing the BV operating statement, most cells in the electronic data collection folder (Excel) are pre-filled with conditional formatting. A legend for cell coloring can be found on the title page of the operating statement. For example, a cell automatically takes on the background color of the corresponding vertical block after it has been filled. In this way, one can easily recognize which cells have not been filled. 23 Automatic reconciliations take place between individual cells. In case of non-matching, the cell is colored red – such errors must be corrected. Where reconciliation is not possible, this must be explained in the accompanying report (see below). 24 d) Adjustment of Formulas and Formats The provided formulas and formats must under no circumstances be overwritten or modified, as otherwise the evaluation of the submitted operating statements may be significantly hindered. If additional comments and additions are appropriate, they must be listed in the accompanying report. 25 B. Accompanying Report The accompanying report is to be submitted together with the BV operating statement. Where this circular requires a detailing of positions of the operating statement, these (for the occupational pension business) are to be listed in the accompanying report (see Pos. 22, 24, 47, 47a, 48, 100, 109, 123, 131, 132, 181 as well as 199–206). Additionally, the following information must be provided in the accompanying report: • Development of Position 89 "Shown Equity" 26 8/29 • Comments on significant deviations compared to the prior year • Distribution principles for surplus allocation • Corrections made in the prior year figures • Comments on problems and errors that occurred while filling out the operating statement • Suggestions for better design of the operating statement or associated documents • Justification of any uncorrected errors (cell is colored red) The accompanying report must be accompanied by the following documents (or possibly a corresponding negative confirmation): • A detailed overview of expenses and revenues not directly attributable to the BV business (including retrocession), from which it is particularly evident which automated and/or manual keys are used for the allocation from cost centers to the cost carrier Occupational Pension Provision. Additionally, a comprehensible comment must be written describing the system of allocating indirect expenses and revenues (allocation criteria, functioning of automated vs. manual, degree of expansion, etc.). • For internal account relationships (current accounts, loans, etc.) between the BV business and the other business, the interest rates used in the reporting year as well as the absolute amount of the calculated interest must be specified. It must be evident whether the interest was credited to or debited from the BV business. • A differing structure between the commercial law financial statements and the BV operating statement (balance sheet and income statement at the CH business level) must be documented in a comprehensible reconciliation. 27 C. Reference Table Repealed 28 D. Disclosure Proposal According to Art. 140 Ordinance, the insurance company informs the policyholders within five months after the balance sheet date. 29 The last part of the BV operating statement, the disclosure schema, defines the minimum standard for the disclosure of the operating statement to the insured collective foundations and pension schemes. The information contained in the disclosure schema must be disclosed mandatorily and unchanged. 30 With the disclosure proposal, the insurer indicates how it intends to fulfill its information obligations. If violations of the minimum requirements of the disclosure schema are found after information has already been provided, these must be corrected. The corrected information must be sent to the insured collective foundations and pension schemes via the same communication channel as the original information. 31 The disclosure proposal is to be submitted to the FINMA together with the other documents. 32 E. Submission Deadline The affected life insurers must submit the audited version of the BV operating statement, the accompanying report, and the disclosure proposal to the FINMA by April 30 (according to Art. 25 para. 3 VAG). 33 VI. Individual Components of the Operating Statement BV The positions are numbered from 1 to 482 across all data entry pages. Due to minor corrections, the numbering in the BV operating statement is sometimes no longer in continuous and logical order. In the present circular, however, the position numbers are shown in ascending order and in round brackets. 34 Unless otherwise specified, data for the reporting year is to be entered. Additionally, errors in the pre-filled prior year figures must be corrected and documented in the accompanying report. 35 Representation of Reinsurance Business Passive Reinsurance: In the income statement, the share of reinsurers must be shown separately in positions 4, 12, 18, and 22a. Any further reinsurer shares belonging to positions 24 to 51 are to be summarized in other revenues/expenses (Pos. 47 / 47a). 36 In the Technical Breakdown, the shares of reinsurers are shown in positions 173 and 181a. Any further reinsurer shares are to be included in the balance of other income statement items (Pos. 181). 37 Active Reinsurance: Any active reinsurance business existing in the area of occupational pension provision (retrocessions from the BV business of other private insurers) is to be recorded in the vertical block "other business." 38 A. Income Statement Expenses and revenues are to be allocated as appropriately as possible. This means that currency results (exchange rate differences as well as hedging expenses) are to be assigned to capital investments under the result from capital investments. Exchange rate differences on the coverage capital of foreign currency policies, however, are to be recorded under the position "Change in Coverage Capital." 39 For positions 3, 10, 25, and 28, the column "Additional Information in the Current Year Beyond Obligation" must be filled out additionally. 40 (6) Other actuarial revenues Under this position, among others, interest on outstanding premiums, current accounts, and other claims from insurance business is to be recorded. 41 (7) Benefits due to age, death, and disability Surplus pensions are considered guaranteed benefits and are to be included in this position 42 9/29 if they compensate for the difference between the legally required and tariff benefit. (8) Freedom of Movement Benefits This position covers freedom of movement benefits paid to insured persons due to leaving employment, but also capital withdrawals of any kind, especially those for home ownership, and partial or full buybacks of freedom of movement policies. 43 (11) Benefit Processing Expenses The benefit processing costs recorded by the insurance institutions can be shown under this position. A display under other administrative expenses is permissible, provided the benefit processing costs are not recorded separately in the accounting. In this case, a corresponding comment must be added in the accompanying report. Position 11 is to be divided in the technical breakdown into Pos. 157 and Pos. 172. 44 (15) Change in Reinforcements This position is to specify the reinforcements of ongoing pensions made in the operating year. However, changes in provisions formed for the accrual period for foreseeable future coverage gaps (e.g., due to the legally required pension conversion rate in the mandatory occupational pension provision) are to be included under Position 17, Change in other technical provisions. 45 (16) Change in Provision for Incurred but Not Reported Insurance Cases Income statement item assigned to balance sheet position 101. 46 (17) Change in other actuarial provisions Income statement item assigned to balance sheet position 109. 47 (20) Acquisition Expenses The items described in the guideline for reporting FIRST are to be recorded. 48 (21) Change in Activated Acquisition Costs The corresponding data entry position for occupational pension provision is locked (see also comment on balance sheet position 85). 49 (22) Expenses for General Administration This position is to be detailed in the accompanying report. 50 (24) Interest Expense and Other Actuarial Expenses Under this position, among others, interest on prepaid premiums, current account liabilities, and other liabilities from insurance business is to be recorded. Interest on surplus accounts is recorded under this position and not charged to surplus expense or interest expense (Pos. 42). This position is to be detailed in the accompanying report. 51 (25) Contractually Agreed Allocation of Excess Return According to footnote c in the data collection folder, "excess return" refers, provided the policyholder bears the investment risk, to that part of the capital return that is generated beyond the technical interest rate. The excess return can, if contractually agreed, be allocated both to the individually calculated coverage capital of the insured (accumulation) as well as to the policyholder for regulatory further use. 52 10/29 (26) Allocation to the Surplus Fund The designation "Provision for performance-dependent and performance-independent surplus participation" is replaced by "Surplus Fund" for simplicity. 53 (27) Withdrawal from the Surplus Fund Position 27 is automatically filled as the sum of positions 28 and 29. 54 (29) Use to Cover the Deficit of the Prior Year (see comment on position 89) 55 (33) Capital Investment Returns These include direct capital returns (interest, rental income, dividends). The imputed rent for self-used properties must be booked. It should be oriented towards a rental income yield achievable on the market. Expenses for property maintenance (maintenance costs) are also to be recorded under this position. 56 (34) Gain from Disposals Gains or losses from disposals are to be shown based on the book value of the last balance sheet date. If the corresponding differences compared to the acquisition cost are determined, a separate display in Gain (34) or Loss (35) from disposals as well as Write-ups (36) or Write-downs (37) is permitted. 57 (35) Loss from Disposals (see comment on position 34) 58 (36) Write-ups (see comment on position 37) 59 (37) Write-downs Write-downs include the difference between the lower market value and the book value of the last balance sheet date or the mid-year acquisition cost. When applying the lower of cost or market principle instead of the strict lower of cost or market principle, write-ups correspond to the reinstatement of write-downs to a value between the book value and, at most, the lower of acquisition or market value. When applying the market value principle (stocks), value changes are also recorded via write-ups and write-downs. Adjustments of the book value take place within the framework of OR regulations and have been audited by the audit firm. 60 (38) Currency Result on Capital Investments In addition to corrections from exchange rate changes on capital investments, any expenses or revenues from currency hedging transactions on capital investments are to be included in 11/29 the currency result on capital investments. Exchange rate differences on the coverage capital of foreign currency policies are to be recorded under the position "Change in Coverage Capital." 61 (39) Currency Result on Coverage Capital Exchange rate differences on the coverage capital of foreign currency policies are to be recorded under this position. 62 (40) Currency Result on Other Assets and Liabilities Currency results on other assets and liabilities are to be recorded under this position. 63 (41) Other Actuarial Expenses Under this position, among others, the expenses for the administration of the insurance business are to be recorded. 64 (42) Interest Expense Interest expense is to be recorded under this position. 65 (43) Other Expenses Other expenses are to be recorded under this position. 66 (44) Change in Provisions for Bonuses and Similar Benefits The change in provisions for bonuses and similar benefits is to be recorded under this position. 67 (45) Change in Provisions for Other Benefits The change in provisions for other benefits is to be recorded under this position. 68 (46) Change in Provisions for Other Actuarial Liabilities The change in provisions for other actuarial liabilities is to be recorded under this position. 69 (47) Other Actuarial Revenues Other actuarial revenues are to be recorded under this position. 70 (48) Other Actuarial Expenses Other actuarial expenses are to be recorded under this position. 71 B. Balance Sheet The balance sheet is to be divided into occupational pension provision and other business. The vertical block "Occupational Pension Provision" must correspond with the corresponding secondary statement, and the vertical block "Swiss Business" must correspond with the commercial law financial statements. If the structure in the commercial law financial statements does not correspond to that in the BV operating statement, a reconciliation must be presented in the accompanying report or in an appendix to the accompanying report. 72 (50) Cash and Cash Equivalents Cash and cash equivalents are to be recorded under this position. 73 (51) Deposits with Banks and Financial Institutions Deposits with banks and financial institutions are to be recorded under this position. 74 (52) Loans to Policyholders Loans to policyholders are to be recorded under this position. 75 (53) Loans to Related Parties Loans to related parties are to be recorded under this position. 76 (54) Loans to Other Parties Loans to other parties are to be recorded under this position. 77 (55) Investments in Subsidiaries Investments in subsidiaries are to be recorded under this position. 78 (56) Investments in Associates Investments in associates are to be recorded under this position. 79 (57) Investments in Joint Ventures Investments in joint ventures are to be recorded under this position. 80 (58) Investments in Real Estate Investments in real estate are to be recorded under this position. 81 (59) Investments in Bonds Investments in bonds are to be recorded under this position. 82 (60) Investments in Shares Investments in shares are to be recorded under this position. 83 (61) Investments in Other Securities Investments in other securities are to be recorded under this position. 84 (62) Investments in Collective Investment Schemes Investments in collective investment schemes are to be recorded under this position. 85 (63) Investments in Derivatives Investments in derivatives are to be recorded under this position. 86 (64) Investments in Other Assets Investments in other assets are to be recorded under this position. 87 (65) Intangible Assets Intangible assets are to be recorded under this position. 88 (66) Fixed Assets Fixed assets are to be recorded under this position. 89 (67) Other Assets Other assets are to be recorded under this position. 90 (68) Provisions for Bonuses and Similar Benefits Provisions for bonuses and similar benefits are to be recorded under this position. 91 (69) Provisions for Other Benefits Provisions for other benefits are to be recorded under this position. 92 (70) Provisions for Other Actuarial Liabilities Provisions for other actuarial liabilities are to be recorded under this position. 93 (71) Provisions for Other Liabilities Provisions for other liabilities are to be recorded under this position. 94 (72) Other Liabilities Other liabilities are to be recorded under this position. 95 (73) Equity Equity is to be recorded under this position. 96 (74) Surplus Fund The surplus fund is to be recorded under this position. 97 (75) Inflation Reserve The inflation reserve is to be recorded under this position. 98 (76) Other Equity Other equity is to be recorded under this position. 99 (77) Total Equity Total equity is to be recorded under this position. 100 C. Technical Breakdown of the Result The technical breakdown of the result is to be divided into the savings process, the risk process, and the cost process. The results of these processes are to be allocated to the surplus fund, the inflation reserve, and the policyholders. 101 a) Savings Process (Art. 143 Ordinance) The savings process includes the interest income on the coverage capital, the interest expense on the coverage capital, and the change in the coverage capital. 102 (108) Interest Income on Coverage Capital Interest income on the coverage capital is to be recorded under this position. 103 (109) Interest Expense on Coverage Capital Interest expense on the coverage capital is to be recorded under this position. 104 (110) Change in Coverage Capital The change in the coverage capital is to be recorded under this position. 105 (111) Other Savings Process Items Other items of the savings process are to be recorded under this position. 106 (112) Total Savings Process The total savings process is to be recorded under this position. 107 b) Risk Process (Art. 144 Ordinance) The risk process includes the risk premiums, the risk benefits, and the change in the risk provisions. 108 (123) Risk Premiums Risk premiums are to be recorded under this position. 109 (124) Risk Benefits Risk benefits are to be recorded under this position. 110 (125) Change in Risk Provisions The change in risk provisions is to be recorded under this position. 111 (126) Other Risk Process Items Other items of the risk process are to be recorded under this position. 112 (127) Total Risk Process The total risk process is to be recorded under this position. 113 c) Cost Process (Art. 145 Ordinance) The cost process includes the acquisition expenses, the maintenance expenses, and the change in the acquisition cost provisions. 114 (132) Acquisition Expenses Acquisition expenses are to be recorded under this position. 115 (133) Maintenance Expenses Maintenance expenses are to be recorded under this position. 116 (134) Change in Acquisition Cost Provisions The change in acquisition cost provisions is to be recorded under this position. 117 (135) Other Cost Process Items Other items of the cost process are to be recorded under this position. 118 (136) Total Cost Process The total cost process is to be recorded under this position. 119 d) Payout Quota and its Use, Broken Down by Components The payout quota is to be calculated as the ratio of the returns used for the policyholders to the total returns. The returns are to be broken down by components. 120 (138) Returns Used for Policyholders Returns used for policyholders are to be recorded under this position. 121 (139) Total Returns Total returns are to be recorded under this position. 122 (140) Payout Quota The payout quota is to be recorded under this position. 123 e) Procedure for Positive Overall Balance (Art. 149 Ordinance) If the overall balance is positive, the surplus is to be allocated to the surplus fund, the inflation reserve, and the policyholders. 124 (141) Surplus Allocation to Surplus Fund Surplus allocation to the surplus fund is to be recorded under this position. 125 (142) Surplus Allocation to Inflation Reserve Surplus allocation to the inflation reserve is to be recorded under this position. 126 (143) Surplus Allocation to Policyholders Surplus allocation to policyholders is to be recorded under this position. 127 (144) Total Surplus Allocation Total surplus allocation is to be recorded under this position. 128 f) Procedure for Negative Overall Balance (Art. 150 Ordinance) If the overall balance is negative, the deficit is to be covered by the surplus fund, the inflation reserve, and the policyholders. 129 (149) Deficit Coverage from Surplus Fund Deficit coverage from the surplus fund is to be recorded under this position. 130 (150) Deficit Coverage from Inflation Reserve Deficit coverage from the inflation reserve is to be recorded under this position. 131 (151) Deficit Coverage from Policyholders Deficit coverage from policyholders is to be recorded under this position. 132 (152) Total Deficit Coverage Total deficit coverage is to be recorded under this position. 133 g) Recapitulation and Allocation of Statement Result (Pos. 217 to 237) The recapitulation and allocation of the statement result is to be recorded under these positions. 134 (217) Total Income Statement Result Total income statement result is to be recorded under this position. 135 (218) Total Balance Sheet Result Total balance sheet result is to be recorded under this position. 136 (219) Total Technical Breakdown Result Total technical breakdown result is to be recorded under this position. 137 (220) Total Surplus Fund Update Total surplus fund update is to be recorded under this position. 138 (221) Total Inflation Reserve Update Total inflation reserve update is to be recorded under this position. 139 (222) Total Payout to Policyholders Total payout to policyholders is to be recorded under this position. 140 (223) Total Surplus Allocation Total surplus allocation is to be recorded under this position. 141 (224) Total Deficit Coverage Total deficit coverage is to be recorded under this position. 142 (225) Total Surplus Fund Balance Total surplus fund balance is to be recorded under this position. 143 (226) Total Inflation Reserve Balance Total inflation reserve balance is to be recorded under this position. 144 (227) Total Policyholder Balance Total policyholder balance is to be recorded under this position. 145 (228) Total Surplus Fund Change Total surplus fund change is to be recorded under this position. 146 (229) Total Inflation Reserve Change Total inflation reserve change is to be recorded under this position. 147 (230) Total Policyholder Change Total policyholder change is to be recorded under this position. 148 (231) Total Surplus Fund Allocation Total surplus fund allocation is to be recorded under this position. 149 (232) Total Inflation Reserve Allocation Total inflation reserve allocation is to be recorded under this position. 150 (233) Total Policyholder Allocation Total policyholder allocation is to be recorded under this position. 151 (234) Total Surplus Fund Withdrawal Total surplus fund withdrawal is to be recorded under this position. 152 (235) Total Inflation Reserve Withdrawal Total inflation reserve withdrawal is to be recorded under this position. 153 (236) Total Policyholder Withdrawal Total policyholder withdrawal is to be recorded under this position. 154 (237) Total Surplus Fund Net Change Total surplus fund net change is to be recorded under this position. 155 h) The Surplus Fund and its Update (Pos. 238 to 249) The surplus fund and its update are to be recorded under these positions. 156 (238) Surplus Fund Opening Balance Surplus fund opening balance is to be recorded under this position. 157 (239) Surplus Fund Allocation Surplus fund allocation is to be recorded under this position. 158 (240) Surplus Fund Withdrawal Surplus fund withdrawal is to be recorded under this position. 159 (241) Surplus Fund Interest Surplus fund interest is to be recorded under this position. 160 (242) Surplus Fund Change Surplus fund change is to be recorded under this position. 161 (243) Surplus Fund Closing Balance Surplus fund closing balance is to be recorded under this position. 162 (244) Surplus Fund Allocation to Policyholders Surplus fund allocation to policyholders is to be recorded under this position. 163 (245) Surplus Fund Allocation to Inflation Reserve Surplus fund allocation to inflation reserve is to be recorded under this position. 164 (246) Surplus Fund Allocation to Other Surplus fund allocation to other is to be recorded under this position. 165 (247) Surplus Fund Withdrawal from Policyholders Surplus fund withdrawal from policyholders is to be recorded under this position. 166 (248) Surplus Fund Withdrawal from Inflation Reserve Surplus fund withdrawal from inflation reserve is to be recorded under this position. 167 (249) Surplus Fund Withdrawal from Other Surplus fund withdrawal from other is to be recorded under this position. 168 i) Update of the Inflation Reserve (Pos. 250 to 256) The update of the inflation reserve is to be recorded under these positions. 169 (250) Inflation Reserve Opening Balance Inflation reserve opening balance is to be recorded under this position. 170 (251) Inflation Reserve Allocation Inflation reserve allocation is to be recorded under this position. 171 (252) Inflation Reserve Withdrawal Inflation reserve withdrawal is to be recorded under this position. 172 (253) Inflation Reserve Interest Inflation reserve interest is to be recorded under this position. 173 (254) Inflation Reserve Change Inflation reserve change is to be recorded under this position. 174 (255) Inflation Reserve Closing Balance Inflation reserve closing balance is to be recorded under this position. 175 (256) Inflation Reserve Allocation to Policyholders Inflation reserve allocation to policyholders is to be recorded under this position. 176 D. Information on Portfolio Structure in Occupational Pension Provision Information on the portfolio structure in occupational pension provision is to be recorded under these positions. 177 (182) Number of Policies Number of policies is to be recorded under this position. 178 (183) Number of Insured Number of insured is to be recorded under this position. 179 (184) Total Coverage Capital Total coverage capital is to be recorded under this position. 180 E. Accounting Principles Accounting principles are to be recorded under this position. 181 (185) Accounting Principles for Intangible Assets, Capital Investments, and Fixed Assets Accounting principles for intangible assets, capital investments, and fixed assets are to be recorded under this position. 182 F. Valuation Reserves for Occupational Pension Provision and Other Business Valuation reserves for occupational pension provision and other business are to be recorded under this position. 183 (186) Valuation Reserves Valuation reserves are to be recorded under this position. 184 G. Disclosure Schema The disclosure schema is to be recorded under these positions. 185 (187) Disclosure Schema Disclosure schema is to be recorded under this position. 186 (188) Disclosure Schema Details Disclosure schema details are to be recorded under this position. 187 12/29 (39) Currency Result on Coverage Capital Exchange rate differences on the coverage capital of foreign currency policies are to be recorded under this position. 62 (40) Currency Result on Other Assets and Liabilities Currency results on other assets and liabilities are to be recorded under this position. 63 (41) Other Actuarial Expenses Under this position, among others, the expenses for the administration of the insurance business are to be recorded. 64 (42) Interest Expense Interest expense is to be recorded under this position. 65 (43) Other Expenses Other expenses are to be recorded under this position. 66 (44) Change in Provisions for Bonuses and Similar Benefits The change in provisions for bonuses and similar benefits is to be recorded under this position. 67 (45) Change in Provisions for Other Benefits The change in provisions for other benefits is to be recorded under this position. 68 (46) Change in Provisions for Other Actuarial Liabilities The change in provisions for other actuarial liabilities is to be recorded under this position. 69 (47) Other Actuarial Revenues Other actuarial revenues are to be recorded under this position. 70 (48) Other Actuarial Expenses Other actuarial expenses are to be recorded under this position. 71 B. Balance Sheet The balance sheet is to be divided into occupational pension provision and other business. The vertical block "Occupational Pension Provision" must correspond with the corresponding secondary statement, and the vertical block "Swiss Business" must correspond with the commercial law financial statements. If the structure in the commercial law financial statements does not correspond to that in the BV operating statement, a reconciliation must be presented in the accompanying report or in an appendix to the accompanying report. 72 (50) Cash and Cash Equivalents Cash and cash equivalents are to be recorded under this position. 73 (51) Deposits with Banks and Financial Institutions Deposits with banks and financial institutions are to be recorded under this position. 74 (52) Loans to Policyholders Loans to policyholders are to be recorded under this position. 75 (53) Loans to Related Parties Loans to related parties are to be recorded under this position. 76 (54) Loans to Other Parties Loans to other parties are to be recorded under this position. 77 (55) Investments in Subsidiaries Investments in subsidiaries are to be recorded under this position. 78 (56) Investments in Associates Investments in associates are to be recorded under this position. 79 (57) Investments in Joint Ventures Investments in joint ventures are to be recorded under this position. 80 (58) Investments in Real Estate Investments in real estate are to be recorded under this position. 81 (59) Investments in Bonds Investments in bonds are to be recorded under this position. 82 (60) Investments in Shares Investments in shares are to be recorded under this position. 83 (61) Investments in Other Securities Investments in other securities are to be recorded under this position. 84 (62) Investments in Collective Investment Schemes Investments in collective investment schemes are to be recorded under this position. 85 (63) Investments in Derivatives Investments in derivatives are to be recorded under this position. 86 (64) Investments in Other Assets Investments in other assets are to be recorded under this position. 87 (65) Intangible Assets Intangible assets are to be recorded under this position. 88 (66) Fixed Assets Fixed assets are to be recorded under this position. 89 (67) Other Assets Other assets are to be recorded under this position. 90 (68) Provisions for Bonuses and Similar Benefits Provisions for bonuses and similar benefits are to be recorded under this position. 91 (69) Provisions for Other Benefits Provisions for other benefits are to be recorded under this position. 92 (70) Provisions for Other Actuarial Liabilities Provisions for other actuarial liabilities are to be recorded under this position. 93 (71) Provisions for Other Liabilities Provisions for other liabilities are to be recorded under this position. 94 (72) Other Liabilities Other liabilities are to be recorded under this position. 95 (73) Equity Equity is to be recorded under this position. 96 (74) Surplus Fund The surplus fund is to be recorded under this position. 97 (75) Inflation Reserve The inflation reserve is to be recorded under this position. 98 (76) Other Equity Other equity is to be recorded under this position. 99 (77) Total Equity Total equity is to be recorded under this position. 100 C. Technical Breakdown of the Result The technical breakdown of the result is to be divided into the savings process, the risk process, and the cost process. The results of these processes are to be allocated to the surplus fund, the inflation reserve, and the policyholders. 101 a) Savings Process (Art. 143 Ordinance) The savings process includes the interest income on the coverage capital, the interest expense on the coverage capital, and the change in the coverage capital. 102 (108) Interest Income on Coverage Capital Interest income on the coverage capital is to be recorded under this position. 103 (109) Interest Expense on Coverage Capital Interest expense on the coverage capital is to be recorded under this position. 104 (110) Change in Coverage Capital The change in the coverage capital is to be recorded under this position. 105 (111) Other Savings Process Items Other items of the savings process are to be recorded under this position. 106 (112) Total Savings Process The total savings process is to be recorded under this position. 107 b) Risk Process (Art. 144 Ordinance) The risk process includes the risk premiums, the risk benefits, and the change in the risk provisions. 108 (123) Risk Premiums Risk premiums are to be recorded under this position. 109 (124) Risk Benefits Risk benefits are to be recorded under this position. 110 (125) Change in Risk Provisions The change in risk provisions is to be recorded under this position. 111 (126) Other Risk Process Items Other items of the risk process are to be recorded under this position. 112 (127) Total Risk Process The total risk process is to be recorded under this position. 113 c) Cost Process (Art. 145 Ordinance) The cost process includes the acquisition expenses, the maintenance expenses, and the change in the acquisition cost provisions. 114 (132) Acquisition Expenses Acquisition expenses are to be recorded under this position. 115 (133) Maintenance Expenses Maintenance expenses are to be recorded under this position. 116 (134) Change in Acquisition Cost Provisions The change in acquisition cost provisions is to be recorded under this position. 117 (135) Other Cost Process Items Other items of the cost process are to be recorded under this position. 118 (136) Total Cost Process The total cost process is to be recorded under this position. 119 d) Payout Quota and its Use, Broken Down by Components The payout quota is to be calculated as the ratio of the returns used for the policyholders to the total returns. The returns are to be broken down by components. 120 (138) Returns Used for Policyholders Returns used for policyholders are to be recorded under this position. 121 (139) Total Returns Total returns are to be recorded under this position. 122 (140) Payout Quota The payout quota is to be recorded under this position. 123 e) Procedure for Positive Overall Balance (Art. 149 Ordinance) If the overall balance is positive, the surplus is to be allocated to the surplus fund, the inflation reserve, and the policyholders. 124 (141) Surplus Allocation to Surplus Fund Surplus allocation to the surplus fund is to be recorded under this position. 125 (142) Surplus Allocation to Inflation Reserve Surplus allocation to the inflation reserve is to be recorded under this position. 126 (143) Surplus Allocation to Policyholders Surplus allocation to policyholders is to be recorded under this position. 127 (144) Total Surplus Allocation Total surplus allocation is to be recorded under this position. 128 f) Procedure for Negative Overall Balance (Art. 150 Ordinance) If the overall balance is negative, the deficit is to be covered by the surplus fund, the inflation reserve, and the policyholders. 129 (149) Deficit Coverage from Surplus Fund Deficit coverage from the surplus fund is to be recorded under this position. 130 (150) Deficit Coverage from Inflation Reserve Deficit coverage from the inflation reserve is to be recorded under this position. 131 (151) Deficit Coverage from Policyholders Deficit coverage from policyholders is to be recorded under this position. 132 (152) Total Deficit Coverage Total deficit coverage is to be recorded under this position. 133 g) Recapitulation and Allocation of Statement Result (Pos. 217 to 237) The recapitulation and allocation of the statement result is to be recorded under these positions. 134 (217) Total Income Statement Result Total income statement result is to be recorded under this position. 135 (218) Total Balance Sheet Result Total balance sheet result is to be recorded under this position. 136 (219) Total Technical Breakdown Result Total technical breakdown result is to be recorded under this position. 137 (220) Total Surplus Fund Update Total surplus fund update is to be recorded under this position. 138 (221) Total Inflation Reserve Update Total inflation reserve update is to be recorded under this position. 139 (222) Total Payout to Policyholders Total payout to policyholders is to be recorded under this position. 140 (223) Total Surplus Allocation Total surplus allocation is to be recorded under this position. 141 (224) Total Deficit Coverage Total deficit coverage is to be recorded under this position. 142 (225) Total Surplus Fund Balance Total surplus fund balance is to be recorded under this position. 143 (226) Total Inflation Reserve Balance Total inflation reserve balance is to be recorded under this position. 144 (227) Total Policyholder Balance Total policyholder balance is to be recorded under this position. 145 (228) Total Surplus Fund Change Total surplus fund change is to be recorded under this position. 146 (229) Total Inflation Reserve Change Total inflation reserve change is to be recorded under this position. 147 (230) Total Policyholder Change Total policyholder change is to be recorded under this position. 148 (231) Total Surplus Fund Allocation Total surplus fund allocation is to be recorded under this position. 149 (232) Total Inflation Reserve Allocation Total inflation reserve allocation is to be recorded under this position. 150 (233) Total Policyholder Allocation Total policyholder allocation is to be recorded under this position. 151 (234) Total Surplus Fund Withdrawal Total surplus fund withdrawal is to be recorded under this position. 152 (235) Total Inflation Reserve Withdrawal Total inflation reserve withdrawal is to be recorded under this position. 153 (236) Total Policyholder Withdrawal Total policyholder withdrawal is to be recorded under this position. 154 (237) Total Surplus Fund Net Change Total surplus fund net change is to be recorded under this position. 155 h) The Surplus Fund and its Update (Pos. 238 to 249) The surplus fund and its update are to be recorded under these positions. 156 (238) Surplus Fund Opening Balance Surplus fund opening balance is to be recorded under this position. 157 (239) Surplus Fund Allocation Surplus fund allocation is to be recorded under this position. 158 (240) Surplus Fund Withdrawal Surplus fund withdrawal is to be recorded under this position. 159 (241) Surplus Fund Interest Surplus fund interest is to be recorded under this position. 160 (242) Surplus Fund Change Surplus fund change is to be recorded under this position. 161 (243) Surplus Fund Closing Balance Surplus fund closing balance is to be recorded under this position. 162 (244) Surplus Fund Allocation to Policyholders Surplus fund allocation to policyholders is to be recorded under this position. 163 (245) Surplus Fund Allocation to Inflation Reserve Surplus fund allocation to inflation reserve is to be recorded under this position. 164 (246) Surplus Fund Allocation to Other Surplus fund allocation to other is to be recorded under this position. 165 (247) Surplus Fund Withdrawal from Policyholders Surplus fund withdrawal from policyholders is to be recorded under this position. 166 (248) Surplus Fund Withdrawal from Inflation Reserve Surplus fund withdrawal from inflation reserve is to be recorded under this position. 167 (249) Surplus Fund Withdrawal from Other Surplus fund withdrawal from other is to be recorded under this position. 168 i) Update of the Inflation Reserve (Pos. 250 to 256) The update of the inflation reserve is to be recorded under these positions. 169 (250) Inflation Reserve Opening Balance Inflation reserve opening balance is to be recorded under this position. 170 (251) Inflation Reserve Allocation Inflation reserve allocation is to be recorded under this position. 171 (252) Inflation Reserve Withdrawal Inflation reserve withdrawal is to be recorded under this position. 172 (253) Inflation Reserve Interest Inflation reserve interest is to be recorded under this position. 173 (254) Inflation Reserve Change Inflation reserve change is to be recorded under this position. 174 (255) Inflation Reserve Closing Balance Inflation reserve closing balance is to be recorded under this position. 175 (256) Inflation Reserve Allocation to Policyholders Inflation reserve allocation to policyholders is to be recorded under this position. 176 D. Information on Portfolio Structure in Occupational Pension Provision Information on the portfolio structure in occupational pension provision is to be recorded under these positions. 177 (182) Number of Policies Number of policies is to be recorded under this position. 178 (183) Number of Insured Number of insured is to be recorded under this position. 179 (184) Total Coverage Capital Total coverage capital is to be recorded under this position. 180 E. Accounting Principles Accounting principles are to be recorded under this position. 181 (185) Accounting Principles for Intangible Assets, Capital Investments, and Fixed Assets Accounting principles for intangible assets, capital investments, and fixed assets are to be recorded under this position. 182 F. Valuation Reserves for Occupational Pension Provision and Other Business Valuation reserves for occupational pension provision and other business are to be recorded under this position. 183 (186) Valuation Reserves Valuation reserves are to be recorded under this position. 184 G. Disclosure Schema The disclosure schema is to be recorded under these positions. 185 (187) Disclosure Schema Disclosure schema is to be recorded under this position. 186 (188) Disclosure Schema Details Disclosure schema details are to be recorded under this position. 187