Order on Financial Reports for Insurance Undertakings and Cross-Border Pension Funds

Order on Financial Reports for Insurance Undertakings and Cross-Border Pension Funds1)

Pursuant to Section 180, paragraph 5, Section 185, paragraph 3, Section 189a, paragraph 4, Section 190, and Section 316, paragraph 1, of the Act on Insurance Business, cf. Act No. 169 of 16 February 2025, as amended by Act No. 711 of 20 June 2025, and after consultation with the Danish Business Authority, the following is enacted:

Part I
Scope
Chapter 1
Covered Undertakings

Section 1. This Order applies to the following undertakings:

1. Insurance undertakings.
2. Pension funds covered by the Act on Insurance Business (cross-border pension funds).
3. Insurance holding companies and financial holding companies, if their business consists exclusively or mainly in holding shareholdings in insurance undertakings.

Paragraph 2. Cross-border pension funds shall use the concepts from Annex 6 instead of the concepts stated in the text of this Order.

Paragraph 3. Branches of foreign undertakings not subject to the legislation of an EU/EEA country are covered by the provisions on income tax information in Section 171. Branches of foreign undertakings not subject to the legislation of an EU/EEA country, and whose foreign parent company does not have a subsidiary covered by Section 150, are covered by the provisions on a sustainability report in Sections 178-179.

The Covered Reports

Section 2. Undertakings covered by Section 1, paragraph 1, shall prepare and publish an annual report for each financial year, cf. Sections 178 and 179 of the Act on Insurance Business. The annual report shall include a consolidated financial statement, if this follows from Sections 154-156 of this Order.

Paragraph 2. Undertakings covered by Section 1, paragraph 1, of this Order shall prepare and publish a half-yearly report, cf. Section 166, if they have securities admitted to trading on a regulated market in an EU/EEA country.

Paragraph 3. The annual and half-yearly reports shall be drawn up in Danish or English.

Section 3. The financial year shall follow the calendar year.

Paragraph 2. The first financial period may cover a shorter or longer period than 12 months, but at most 18 months.

Paragraph 3. Parent companies and subsidiaries shall ensure that the subsidiary has the same financial year as the parent company, unless this is not possible due to circumstances beyond the control of the parent company and the subsidiary.

Paragraph 4. The Danish Financial Supervisory Authority may grant dispensation from the requirement in paragraph 1 in special cases.

Section 4. A financial statement that an undertaking prepares exclusively for its own use is not an annual report or a half-yearly report under this Order.

Paragraph 2. The undertaking must not designate a financial statement that is not an annual report or a half-yearly report under this Order or under international accounting standards, cf. Section 5, paragraph 1, as an annual report or a half-yearly report. The undertaking must ensure that such a financial statement appears in such a way that it cannot be confused with a financial statement prepared under this Order or under international accounting standards.

Paragraph 3. Undertakings must not designate reporting in the management report as sustainability reporting if the reporting does not contain the information in Section 150, paragraphs 2-13, or Section 151, items 1-5.

Application of International Accounting Standards

Section 5. Annual and interim reports prepared in accordance with the international accounting standards prepared or adopted by the International Accounting Standards Board and approved by the Commission, cf. Section 180 of the Act on Insurance Business, are solely subject to the provisions in the Act on Insurance Business and in orders issued pursuant to Section 190 of the Act that deal with matters not regulated in the aforementioned international accounting standards.

Paragraph 2. If the accounting standards mentioned in paragraph 1 are used solely for the consolidated financial statement and not for the individual financial statement, Sections 5-10 apply solely to the consolidated financial statement.

Paragraph 3. If the accounting standards mentioned in paragraph 1 are used solely for the individual financial statement and not for the consolidated financial statement, the accounting standards mentioned in paragraph 1 apply solely to the individual financial statement.

Paragraph 4. Annual reports prepared in accordance with paragraph 1 must, in addition to the provisions prescribed in the international accounting standards approved by the Commission, comply with Sections 2-4, 103, 110-111, 114-116, 122, 126-127, 129-131, 133, 135, 137-138, and 162.

Paragraph 5. In annual reports prepared in accordance with paragraph 1, the main and key figures that must be disclosed in the annual report in accordance with Section 103 and the amounts that must be allocated to the individual insurance classes in accordance with Section 126, paragraph 4, shall be calculated in accordance with the accounting practice used in the annual report.

Paragraph 6. Sections 2 and 4, Section 166, paragraph 1, first sentence, Section 166, paragraphs 3 and 5-6, and Section 167, paragraph 2, also apply to any half-yearly reports and any quarterly reports prepared in accordance with paragraph 1.

Paragraph 7. Half-yearly reports prepared in accordance with paragraph 1 shall be prepared in accordance with the provisions in the international accounting standards approved by the Commission on the presentation of interim reports.

Paragraph 8. If the annual report prepared in accordance with paragraph 1 must include a consolidated financial statement, the half-yearly report must correspondingly include a half-yearly consolidated financial statement prepared in accordance with the provisions of this Order.

Paragraph 9. If the undertaking, which prepares annual and interim reports in accordance with paragraph 1, publishes quarterly reports, the undertaking becomes subject to paragraphs 7 and 8. However, a parent company may omit its own financial statement, so that the quarterly report covers only the quarterly consolidated financial statement.

Paragraph 10. Undertakings that prepare annual and interim reports in accordance with paragraph 1 must comply with Sections 178, 181, 182, 186-189a, and 192-194 of the Act on Insurance Business, cf. paragraph 1.

Paragraph 11. Sections 178, 181, and 186-189a of the Act on Insurance Business do not, however, apply to the half-yearly report and any quarterly reports prepared in accordance with paragraph 1.

Section 6. Undertakings that prepare annual and interim reports in accordance with Section 5, paragraph 1, must in these reports bind reserves by revaluations and write-ups made in accordance with the provisions in the international accounting standards approved by the Commission in accordance with the provisions on the binding of reserves in Section 60, paragraph 4, and Section 65, paragraphs 3 and 4.

Paragraph 2. Undertakings that prepare annual and interim reports in accordance with Section 5, paragraph 1, must in these reports allocate other revaluations and write-ups of assets or down-valuations and write-downs of liabilities made in accordance with the international accounting standards approved by the Commission, which are not permitted under paragraph 1, to the item Write-up Allocations under equity.

Paragraph 3. Paragraphs 1 and 2 do not apply when preparing a consolidated financial statement prepared in accordance with the international accounting standards.

Section 7. Undertakings that prepare annual and interim reports in accordance with Section 5, paragraph 1, must disclose in a note to these reports any differences between the insurance liabilities calculated using the discount rate used in the annual and interim reports and the relevant risk-free interest rate curve published by EIOPA, pursuant to Article 77e, paragraph 1, of Directive 2009/138/EC of the European Parliament and of the Council. Disclosure of any differences must be accompanied by a comparison of the interest rate curves, where the circumstances giving rise to the differences are justified and explained. The undertaking must disclose the monetary impact on items in the balance sheet and income statement.

Paragraph 2. Undertakings that prepare annual and interim reports in accordance with Section 5, paragraph 1, must disclose in a note to these reports the fair value of all financial instruments that are not measured at fair value in the balance sheet. The disclosures must be stated and specified in a manner that makes it possible to compare the fair value with the accounting values presented for the individual items in the balance sheet.

Paragraph 3. If the accounting values in the balance sheet are a reasonable approximation of the fair value of the relevant financial instruments, disclosure of the fair value may be omitted. The reason for the omission must be disclosed.

Section 8. Undertakings that prepare annual and interim reports in accordance with Section 5, paragraph 1, must disclose, specify, and explain any differences between the accounting result and equity in the undertaking's annual and interim reports prepared in accordance with the international accounting standards approved by the Commission and the corresponding amounts that have been electronically reported to the Danish Financial Supervisory Authority.

Paragraph 2. The undertaking must, at the same time as the publication of the annual and interim reports, make the reconciliation publicly available in another way, e.g., on the undertaking's website, if it does not appear in the annual and interim reports. It must appear from the annual and interim reports how the public can become acquainted with the reconciliation.

Section 9. Undertakings that choose to prepare annual and interim reports in accordance with Section 5, paragraph 1, cannot reverse this choice for subsequent financial years.

Paragraph 2. The Danish Financial Supervisory Authority may grant dispensation from the requirement in paragraph 1 in special cases.

Section 10. When, for undertakings that choose to prepare annual or interim reports in accordance with Section 5, paragraph 1, in connection with a merger or similar transaction in accordance with provisions in the legislation, an opening balance sheet is required to be prepared, this shall be prepared in accordance with the international accounting standards approved by the Commission, cf. however paragraph 2.

Paragraph 2. Notwithstanding paragraph 1, the opening balance sheet, when this is required by legislation, shall be prepared for the legally continuing undertaking.

Part II
The Annual Report
Chapter 2
Classification and Presentation
General Provisions

Section 11. The undertaking must present the balance sheet and income statement in a schematic form in accordance with Annexes 2-4.

Paragraph 2. The undertaking must list the items in the schemes in Annexes 2-4 separately and in the specified order. The undertaking may make a more detailed breakdown on condition that the structure of the presentation schemes is maintained, if the amount in the new sub-item is material, and if the nature or function of the sub-item is different from other sub-items. The undertaking may add new items if the amount for such is material, and if the nature or function of the new item is different from the other items.

Paragraph 3. The undertaking may aggregate items that only contain immaterial amounts with other items of the same nature or function. This does not apply to sub-items for the following items:

1. Annex 2: Item III, Provisions for insurance and investment contracts, total, on the liability side of the balance sheet.
2. Annex 3: Item 1, Gross premiums, total, Item 4, Insurance benefits, total, and Item 5, Change in life insurance provisions, total, in the income statement.
3. Annex 4: Item 1, Gross premium income, total, and Item 3, Claims expenses, total, in the income statement.

Section 12. The undertaking must state the corresponding amounts for the preceding financial year for each item in the balance sheet, income statement, and other comprehensive income, and the overview of movements in equity must be accompanied by a corresponding overview from the previous year. Items from the preceding year must be adjusted if these are not directly comparable with the current year's items, and such an adjustment is practically possible.

Paragraph 2. The undertaking must state and adequately justify in the notes, cf. Section 101, if adjustments have been made to the preceding year's items, or if this has not been possible, cf. paragraph 1.

Paragraph 3. The undertaking must only include items in the balance sheet and income statement that do not contain any amount if the preceding financial statement contains such an item.

Paragraph 4. Paragraphs 1-3 apply correspondingly to note disclosures, unless otherwise prescribed in this Order.

The Balance Sheet
Common Provisions

Section 13. The undertaking must list tangible fixed assets, except for land and buildings and assets held for sale, cf. Section 17, under asset item 1, Property, plant and equipment. The item also includes assets arising from financial leasing contracts for the lessee and assets arising from operating leasing contracts for the lessor. Furthermore, the item includes capitalized costs for the fitting out of leased premises.

Section 14. The undertaking must list subordinated loan capital and other long-term loans to the relevant undertakings under asset items 4.2, Loans to affiliated undertakings, and 4.4, Loans to associated undertakings. The undertaking must list other receivables from the relevant undertakings under asset item 10, Receivables from affiliated undertakings, or asset item 11, Receivables from associated undertakings, or under another item under which the receivable falls by its nature. The undertaking must disclose in a note with a monetary amount if the assets include placements in affiliated or associated undertakings that are not listed under asset items 4, Investments in affiliated and associated undertakings, total, 10, Receivables from affiliated undertakings, or 11, Receivables from associated undertakings.

Section 15. Undertakings that conduct indirect insurance must use asset item 6, Reinsurance Deposits, for amounts owed that are withheld by cedents in accordance with reinsurance contracts. The undertaking must not list assets owned by the reinsurer and pledged as security for the cedent's claims under this item.

Section 16. The undertaking must list the present value of the payment flows related to reinsurance contracts under asset item 7, Reinsurance shares of provisions for insurance contracts, total.

Section 17. The undertaking must list tangible fixed assets or groups of tangible fixed assets as well as subsidiaries and associated undertakings that are only temporarily in the undertaking's possession and awaiting sale within a short time, where a sale is highly probable, under asset item 13, Assets held for sale. Assets covered by Section 64 must not be included in this item. A sale is highly probable if:

1. the undertaking's management is actively seeking a buyer for the assets,
2. the assets are offered at a price that is reasonable in relation to the fair value of the assets, and
3. the assets are expected to be sold within 12 months.

Section 18. The undertaking must list liabilities that meet the criteria for inclusion in the capital base in accordance with the rules in the Order on the Calculation of the Capital Base, under liability item 8, Surplus Capital.

Paragraph 2. The undertaking must list debt liabilities, regarding which it applies that the creditor's claim ranks subordinated to all other creditor claims, under liability item 9, Other Subordinated Loan Capital. The undertaking must list member accounts in cross-border pension funds and mutual insurance undertakings under the same item.

Section 19. The undertaking must list expenses incurred before the balance sheet date but relating to subsequent years under the prepayment items in the assets. The undertaking must list revenues received before the balance sheet date but relating to subsequent years under the accrual items in the liabilities. This does not, however, apply to received premiums unless the insurance period only begins after the end of the financial year.

Paragraph 2. The undertaking must list expenses, but not insurance benefits, that relate to the financial year but will only be paid in subsequent years, under liabilities. The undertaking must list revenues that relate to the financial year but are only paid after the balance sheet date, under receivables. The undertaking must, however, list accrued, unpaid interest and earned, unpaid rental income under asset item 18, Accrued Interest and Earned Rental Receivables.

Paragraph 3. The undertaking must explain in the notes the expenses or revenues mentioned in paragraphs 1 and 2, if they are of significant importance.

Section 20. The undertaking must list liabilities that are uncertain as to size or timing of settlement, cf. Sections 81 and 82 and Section 86, paragraph 2, under liability item IV, Provisions for Liabilities, total.

Paragraph 2. The undertaking must not use provisions for liabilities to adjust the value of assets.

Section 21. The undertaking must use liability item V, Reinsurance Deposits, for amounts owed that the undertaking has withheld or received from reinsurers in accordance with reinsurance contracts. The undertaking must not list assets owned by reinsurers and pledged as security for the undertaking's claims under this item.

Life Insurance

Section 22. The undertaking must list the present value of the total future incoming and outgoing payments expected to be caused by the life insurance and investment contracts that the undertaking has entered into, plus the risk margin, under liability item 12, Life Insurance Provisions.

Section 23. The undertaking must list the expected future profit from the undertaking's life insurance and investment contracts under liability item 13, Profit Margin on Life Insurance and Investment Contracts.

Section 24. If the undertaking has issued both ordinary life insurance, including average rate products, and market rate products, including investment contracts, it must divide liability item 12, Life Insurance Provisions, and liability item 13, Profit Margin on Life Insurance and Investment Contracts, each into items relating to ordinary life insurance, including average rate products, and items relating to market rate products, including investment contracts. Liability items 12 and 13 must each contain the amounts relating to the two product types.

Paragraph 2. The undertaking must list the investment assets linked to the portfolio of market rate products, including investment contracts, collectively under asset item IV, Investment Assets Linked to Market Rate Products, if liability item 12, Life Insurance Provisions, and liability item 13, Profit Margin on Life Insurance and Investment Contracts, are divided as mentioned in paragraph 1. The undertaking must specify the assets by nature in the balance sheet or in a note.

Paragraph 3. To the extent that the undertaking has life insurance business within insurance classes II, IV, V, or VI, it must account for the insurance provisions for insurance classes II, IV, V, or VI under either ordinary life insurance, including average rate products, and market rate products, based on the principles applicable to the life insurance business conducted within insurance classes II, IV, V, or VI.

Non-Life Insurance

Section 25. The undertaking must list the present value of expected payment flows caused by future insurance events and administration in the unexpired parts of the risk periods for the non-life insurance contracts that the undertaking has entered into, cf. Sections 77 and 78, under liability item 10, Unearned Premium Reserves.

Section 26. The undertaking must list the expected profit in the unexpired parts of the risk periods for the non-life insurance contracts that the undertaking has entered into, under liability item 11, Profit Margin on Non-Life Insurance Contracts. The undertaking must not use liability item 11, Profit Margin on Non-Life Insurance Contracts, for the insurance where the unearned premium reserves are calculated using the simplified method in Section 78.

Section 27. The undertaking must list the present value of expected future payment flows caused by insurance events occurring in the financial year or earlier, cf. Section 79, under liability item 14, Outstanding Claims Reserves.

Section 28. The undertaking must list the amount that the undertaking expects to have to pay another insurance undertaking for this undertaking to take over the risk that the costs of settling the undertaking's non-life insurance contracts deviate from the amounts listed under liability items 10 and 14, Unearned Premium Reserves and Outstanding Claims Reserves, under liability item 15, Risk Margin on Non-Life Insurance Contracts.

The Income Statement
Common Provisions for Non-Life Insurance and Life Insurance

Section 29. The undertaking must list the income attributable to shareholdings in affiliated undertakings in the form of dividends and value adjustments under the sub-item Income from Affiliated Undertakings.

Paragraph 2. The undertaking must list the income attributable to shareholdings in associated undertakings in the form of dividends and value adjustments under the sub-item Income from Associated Undertakings.

Paragraph 3. The undertaking must list the profit or loss from the operation of the undertaking's investment properties and other tangible investment assets under the sub-item Income from Investment Properties and Other Tangible Investment Assets. The undertaking must list the amount after deduction of expenses for the administration of the assets and before deduction of financing interest, which is listed under the item Interest Expenses. The undertaking must not list value adjustments of the assets under this item, but must list the adjustment under the item Exchange Gains and Losses.

Paragraph 4. The undertaking must list interest and interest-like income from bonds, other securities, loans, deposits, and receivables, including index adjustment of index bonds, under the sub-item Interest Income and Dividends etc. The undertaking must also list dividends from shareholdings under the sub-item Interest Income and Dividends etc., unless the amounts fall under the items Income from Affiliated Undertakings and Income from Associated Undertakings.

Paragraph 5. The undertaking must list the total value adjustment, including exchange rate adjustments, as well as net gains and net losses from the sale of owner-occupied properties and assets belonging to the group of investment assets in the balance sheet, under the sub-item Exchange Gains and Losses.