Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings
Date: 1991-12-19
Institutions: Council of the European Union
Subjects: accounting system, balance sheet, consolidated account, insurance company, trading account













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31991L0674

Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings  


Official Journal L 374 , 31/12/1991 P. 0007 - 0031 Finnish special edition: Chapter 6 Volume 3 P. 0093  Swedish special edition: Chapter 6 Volume 3 P. 0093  





COUNCIL DIRECTIVEof 19 December 1991on the  annual accounts and consolidated accounts of insurance undertakings(91/674/EEC) THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular Article  54 thereof, Having regard to the proposal from the Commission (1), In cooperation with the European Parliament (2), Having regard to the opinion of the Economic and Social Committee (3), Whereas Article 54 (3) (g) of the Treaty requires coordination to the necessary extent of the  safeguards which, for the protection of the interests of members and others, are required by Member  States of companies and firms within the meaning of the second paragraph of Article 58 of the  Treaty, with a view to making such safeguards equivalent throughout the Community; Whereas Council Directive 78/660/EEC of 25 July 1978 based on Article 54 (3) (g) of the Treaty on  the annual accounts of certain types of companies (4), as last amended by Directive 90/605/EEC (5),  need not be applied to insurance companies, hereinafter referred to as 'insurance undertakings`,  pending further coordination; whereas, in view of the major importance of insurance undertakings in  the Community, such coordination cannot be delayed any longer following the implementation of  Directive 78/660/EEC; Whereas Council Directive 83/349/EEC of 13 June 1983 based on Article 54 (3) (g) of the Treaty on  consolidated accounts (6), as last amended by Directive 90/605/EEC, provides for derogations for  insurance undertakings only until the expiry of the deadline imposed for the application of this  Directive; whereas this Directive must therefore also include provisions specific to insurance  undertakings in respect of consolidated accounts; Whereas such coordination is also urgently required because insurance undertakings operate across  borders; whereas for creditors, debtors, members, policyholders and their advisers and for the  general public, improved comparability of the annual accounts and consolidated accounts of such  undertakings is of crucial importance; Whereas in the Member States insurance undertakings of different legal forms are in competition  with each other; whereas undertakings engaged in the business of direct insurance customarily  engage in the business of reinsurance as well and are therefore in competition with specialist  reinsurance undertakings; whereas it is therefore appropriate not to confine coordination to the  legal forms covered by Directive 78/660/EEC, but to choose a scope that corresponds to that of  Council Directive 73/239/EEC of 24 July 1973 on the coordination of laws, regulations and  administrative provisions relating to the taking up and pursuit of the business of direct insurance  other than life assurance (7), as last amended by Directive 90/618/EEC (8), and to that of Council  Directive 79/267/EEC of 5 March 1979 on the coordination of laws, regulations and administrative  provisions relating to the taking up and pursuit of the business of direct life assurance (1), as  last amended by Directive 90/619/EEC (2), but which also includes certain undertakings that are  excluded from the scope of those Directives and companies and firms which are reinsurance  undertakings; Whereas, although in view of the specific characteristics of insurance undertakings it would appear  appropriate to propose a separate Directive on the annual accounts and consolidated accounts of  such undertakings, that does not necessarily require the establishment of a set of standards  different from those of Directive 78/660/EEC and 83/349/EEC; whereas such separate standards would  be neither appropriate nor consistent with the principles underlying the coordination of company  law since, given the important position they occupy in the Community economy, insurance  undertakings cannot be excluded from a framework of rules devised for undertakings generally;  whereas, for this reason, only the particular characteristics of insurance undertakings have been  taken into account and this Directive deals only with derogations from the rules laid down in  Directives 78/660/EEC and 83/349/EEC; Whereas there are major differences in the structure and content of the balance sheets of insurance  undertakings in different Member States; whereas this Directive must therefore lay down the same  structure and the same item designations for the balance sheets of all Community insurance  undertakings; Whereas, if annual accounts and consolidated accounts are to be comparable, a number of basic  questions regarding the disclosure of certain transactions in the balance sheet must be settled; Whereas, in the interests of greater comparability, it is also necessary that the content of the  various balance sheet items be determined precisely; Whereas it may be useful to distinguish between the commitments of the insurer and those of the  reinsurer by showing in the assets the reinsurer's share of technical provisions as an asset; Whereas the structure of the profit and loss account should also be determined and certain items in  it should be defined; Whereas, given the specific nature of the insurance industry, it may be useful for unrealized gains  and losses to be dealt with in the profit and loss account; Whereas the comparability of figures in the balance sheet and profit and loss account also depends  basically on the values at which assets and liabilities are shown in the balance sheet; whereas for  a proper understanding of the financial situation of an insurance undertaking the current value of  investments as well as their value based upon the principle of purchase price or production cost  must be disclosed; whereas, however, the compulsory disclosure of the current value of investments,  at least in the notes on the accounts, is prescribed solely for purposes of comparability and  transparency and is not intended to lead to changes in the tax treatment of insurance  undertakings; Whereas in the calculation of life assurance provisions use may be made of actuarial methods  customarily applied on the market or accepted by the insurance-monitoring authorities; whereas  those methods may be implemented by any actuary or expert in accordance with the conditions which  may be laid down in national law and with due regard for the actuarial principles recognized in the  framework of the present and future coordination of the fundamental rules for the prudential and  financial monitoring of direct life assurance business; Whereas, in the calculation of the provision for claims outstanding, on the one hand, any implicit  discounting or deduction should be prohibited, and, on the other hand, precise conditions for  recourse to explicit discounting or deduction should be defined, for the sake of prudence and  transparency; Whereas, in view of the special nature of insurance undertakings, certain changes are necessary  with regard to the notes on annual accounts and on consolidated accounts; Whereas, in line with the intention of covering all insurance undertakings that come within the  scope of Directive 73/239/EEC and 79/267/EEC as well as certain others, derogations such as those  for small and medium-sized insurance undertakings in Directive 78/660/EEC are not provided for, but  certain small mutual associations which are excluded from the scope of Directives 73/239/EEC and  79/267/EEC should not be covered; Whereas for the same reasons the scope allowed Member States pursuant to Directive 83/349/EEC to  exempt parent undertakings of groups from compulsory consolidation if the undertakings to be  consolidated do not together exceed a certain size has not been extended to insurance  undertakings; Whereas in view of its particular nature special provisions are needed for the association of  underwriters known as Lloyd's; Whereas the provisions of this Directive also apply to the consolidated accounts drawn up by a  parent undertaking which is a financial holding company where its subsidiary undertakings are eiher  exclusively or mainly insurance undertakings; Whereas the examination of problems which arise in connection with this Directive, in particular  regarding its application, requires cooperation by representatives of the Member States and the  Commission in a contact committee; whereas, in order to avoid the proliferation of such committees,  it is desirable that such cooperation take place in the committee provided for in Article 52 of  Directive 78/660/EEC; whereas, however, when examining problems concerning insurance undertakings,  the committee must be appropriately constituted; Whereas, in view of the complexity of the matter, the insurance undertakings covered by this  Directive must be allowed an appropriate period to implement its provisions; whereas that period  must be extended to allow the necessary adjustments to be made concerning, on the one hand, the  association of underwriters known as Lloyd's and, on the other, those undertakings which, when this  Directive becomes applicable, show their investments at historical cost; Whereas provision should be made for the review of certain provisions of this Directive after five  years' experience of its application, in the light of the aims of greater transparency and  harmonization. HAS ADOPTED THIS DIRECTIVE: SECTION 1 Preliminary provisions and scope Article 11.  Articles 2, 3, 4  (1), (3) to (5), 6, 7, 13, 14, 15 (3) and (4), 16 to 21, 29 to 35, 37 to 42, 43 (1), points 1 to 7  and 9 to 13, 45 (1), 46, 48 to 50, 51 (1), 54, 56 to 59 and 61 of Directive 78/660/EEC shall apply  to the undertakings referred to in Article 2 of this Directive, except where this Directive  provides otherwise. 2.  Where reference is made in Directives 78/660/EEC and 83/349/EEC to Articles 9 and 10 (balance  sheet) or to Articles 23 to 26 (profit and loss account) of Directive 78/660/EEC, such references  shall be deemed to be references to Article 5 (balance sheet) or to Article 29 (profit and loss  account) of this Directive as appropriate. 3.  References in Directives 78/660/EEC and 83/349/EEC to Articles 31 to 42 of Directive 78/660/EEC  shall be deemed to be references to those Articles, taking account of Articles 45 to 62 of this  Directive. 4.  Where the aforementioned provisions of Directive 78/660/EEC relate to balance-sheet items for  which this Directive lays down no equivalent, they shall be deemed to be references to the items in  Article 6 of this Directive where the corresponding assets and liabilities items are listed. Article 21.  The coordination measures prescribed by this Directive shall apply to companies and  firms within the meaning of the second paragraph of Article 58 of the Treaty which are: (a)  undertakings within the meaning of Article 1 of Directive 73/239/EEC, excluding those mutual  associations which are excluded from the scope of that Directive by virtue of Article 3 thereof but  including those bodies referred to in Article 4 (a), (b), (c) and (e) thereof except where their  activity does not consist wholly or mainly in carrying on insurance business; (b)undertakings within the meaning of Article 1 of Directive 79/267/EEC, excluding those bodies  and mutual associations referred to in Articles 2 (2) and (3) and 3 of that Directive;  or(c)undertakings carrying on reinsurance business. In this Directive, such undertakings shall be referred to as insurance undertakings. 2.  Funds of a group pension fund within the meaning of Article 1 (2) (c) and (d) of Directive  79/267/EEC which an insurance undertaking administers in its own name but on behalf of third  parties must be shown in the balance sheet if the undertaking acquires legal title to the assets  concerned. The total amount of such assets and liabilities shall be shown separately or in the  notes on the accounts, broken down according to the various assets and liabilities items. However,  the Member States may permit the disclosure of such funds as off-balance-sheet items provided there  are special rules whereby such funds can be excluded from the assets available for distribution in  the event of the winding up of an insurance undertaking (or similar proceedings). Assets acquired in the name of and on behalf of third parties must not be shown in the balance  sheet. Article 3Those provisions of this Directive which relate to life assurance shall apply mutatis  mutandis to insurance undertakings which underwrite only health insurance and which do so  exclusively or principally according to the technical principles of life assurance. Member States may apply the first paragraph to health insurance underwritten by joint undertakings  according to the technical principles of life assurance where such activity is significant. Article 4This Directive shall apply to the association of underwriters known as Lloyd's subject  to the adaptations set out in the Annex to take account of the particular nature and structure of  Lloyd's. SECTION 2 General provisions concerning the balance sheet and the profit and loss account  Article 5The combination of items under the conditions laid down in Article 4 (3) (a) or (b) of  Directive 78/660/EEC shall be restricted in the case of insurance undertakings, - as regards the balance sheet, to items preceded by arabic numerals, except for items concerning  technical provisions, and- as regards the profit and loss account, to items preceded by one or  more lower-case letters, except for items I (1) and (4) and II (1), (5) and (6). Combination shall be authorized only under the rules laid down by the Member States. SECTION 3 Layout of the balance sheet Article 6The Member States shall prescribe the  following layout for balance sheets: AssetsA.  Subscribed capital unpaidshowing separately called-up capital (unless national law  requires called-up capital to be included under liabilities, in which case capital called but not  yet paid must be included as an asset either under A or under E (IV)). B. Intangible assetsas described unter items B and C (I) of Article 9 of Directive 78/660/EEC,  showing separately: - formation expenses, as defined by national law and in so far as national law permits their being  shown as an asset (unless national law requires their disclosure in the notes on the accounts), - goodwill, to the extent that it was acquired for valuable consideration (unless national law  requires its disclosure in the notes on the accounts). C. InvestmentsIII.  Land and buildings: showing separately land and buildings occupied by an insurance undertaking for its own activities  (unless national law requires their disclosure in the notes on the accounts). III. Investments in affiliated undertakings and participating interests: 1.  Shares in affiliated undertakings. 2. Debt securities issued by, and loans to, affiliated undertakings. 3. Participating interests. 4. Debt securities issued by, and loans to, undertakings with which an insurance undertaking is linked  by virtue of a participating interest. III. Other financial investments: 1.  Shares and other variable-yield securities and units in unit trusts. 2. Debt securities and other fixed-income securities. 3. Participation in investment pools. 4. Loans guaranteed by mortgages. 5. Other loans. 6. Deposits with credit institutions. 7. Other. IV. Deposits with ceding undertakings. D. Investments for the benefit of life-assurance policyholders who bear the investment riskE. Debtors(Amounts owed by: - affiliated undertakings, and- undertakings with which an insurance undertaking is linked by  virtue of participating interestsshall be shown separately, as sub-items of items I, II and III). III.  Debtors arising out of direct insurance operations1.  policyholders; 2.  intermediaries. III. Debtors arising out of reinsurance operations. III. Other debtors. IV. Subscribed capital called but not paid(unless national law requires that capital called but not  paid be shown as an asset under A). F. Other assetsIII.  Tangible assets and stocks as listed under C (II) and D (I) in Article 9 of  Directive 78/660/EEC, other than land and buildings, buildings under construction and deposits paid  on land and buildings. III. Cash at bank and in hand. III. Own shares (with an indication of their nominal value or, in the absence of a nominal value, their  accounting par value) to the extent that national law permits their being shown in the balance  sheet. IV. Other. G. Prepayments and accrued incomeIII. Accrued interest and rent. III. Deferred acquisition costs (distinguishing those arising in non-life insurance and life-assurance  business). III. Other prepayments and accrued income. H. Loss for the financial year(unless national law requires it to be shown as a liability under A  (VI)). LiabilitiesA.  Capital and reservesIII.  Subscribed capital or equivalent funds(unless national  law requires called-up capital to be shown under this item. In that case, the amounts of subscribed  capital and paid-up capital must be shown separately). III. Share premium account. III. Revaluation reserve. IV. Reserve. IV. Profit or loss brought forward. VI. Profit or loss for the financial year(unless national law requires it to be shown as an asset  under H or as a liability under I). B. Subordinated liabilitiesC. Technical provisions1.  Provision for unearned premiums: (a)  gross amount. (b)reinsurance amount ( ). . 2. Life assurance provision: (a)  gross amount ( ). (b)reinsurance amount ( ). . 3. Claims outstanding: (a)  gross amount. (b)reinsurance amount ( ). . 4. Provision for bonuses and rebates(unless shown under 2): (a)  gross amount. (b)reinsurance amount ( ). . 5. Equalization provision6. Other technical provisions: (a)  gross amount. (b)reinsurance amount ( ). . D. Technical provisions for life-assurance policies where the investment risk is borne by the  policyholders: (a)  gross amount. (b)reinsurance amount ( ). . E.  Provisions for other risks and charges1.  Provisions for pensions and similar obligations.2. Provisions for taxation. 3. Other provisions. F. Deposits received from reinsurersG. Creditors(Amounts owed to: - affiliated undertakings, and- undertakings with which an insurance undertaking is linked by  virtue of a participating interestshall be shown separately, as sub-items.)III.  Creditors  arising out of direct insurance operations. III. Creditors arising out of reinsurance operations. III. Debenture loans, showing convertible loans separately. IV. Amounts owed to credit institutions. IV. Other creditors, including tax and social security. H. Accruals and deferred incomeI. Profit for the financial year(unless national law requires it to be shown as a liability under A  (VI)). Article 7Article 14 of Directive 78/660/EEC shall not apply to commitments linked to insurance  activities. SECTION 4 Special provisions relating to certain balance-sheet items Article 8Article 15 (3)  of Directive 78/660/EEC shall apply only to assets items B and C (I) and (II) as defined in Article  6 of this Directive. Any movements in these items shall be shown on the basis of the balance-sheet  value at the beginning of the financial year. Article 9Assets:  item C (III) (2)Debt securities and other fixed-income securities1.  This  item shall comprise negotiable debt securities and other fixed-income securities issued by credit  institutions, by other undertakings or by public bodies, in so far as they are not covered by item  C (II) (2) or (4). 2.  Securities bearing interest the rate of which varies in line with specific factors, for example  the interest rate on the inter-bank market or on the Euromarket, shall also be regarded as debt  securities and other fixed-income securities. Article 10Assets:  item C (III) (3)Participation in investment poolsThis item shall comprise  shares held by an undertaking in joint investments constituted by several undertakings or pension  funds, the management of which has been entrusted to one of those undertakings or to one of those  pension funds. Article 11Assets:  items C (III) (4) and (5)Loans guaranteed by mortgages and other loansLoans  to policyholders for which the policy is the main security shall be included under 'Other loans`  and their amount shall be disclosed in the notes on the accounts. Loans guaranteed by mortgage  shall be shown as such even where they are also secured by insurance policies. Where the amount of  'Other loans` not secured by policies is material, an appropriate breakdown shall be given in the  notes on the accounts. Article 12Assets:  item C (III) (6)Deposits with credit institutionsThis item shall comprise  sums the withdrawal of which is subject to a time restriction. Sums deposited with no such  restriction shall be shown under F (II) even if they bear interest. Article 13Assets:  item C (III) (7)OtherThis item shall comprise those investments which are  not covered by items C (III) (1) to (6). Where the amount of such investments is significant, they  must be disclosed in the notes on the accounts. Article 14Assets:  item C (IV)Deposits with ceding undertakingsIn the balance sheet of an  undertaking which accepts reinsurance this item shall comprise amounts, owed by the ceding  undertakings and corresponding to guarantees, which are deposited with those ceding undertakings or  with third parties or which are retained by those undertakings. These amounts may not be combined with other amounts owed by the ceding insurer to the reinsurer or  set off against amounts owed by the reinsurer to the ceding insurer. Securities deposited with ceding undertakings or third parties which remain the property of the  undertaking accepting reinsurance shall be entered in the latter's accounts as an investment, under  the appropriate item. Article 15Assets:  item DInvestments for the benefit of life assurance policyholders who bear  the investment risk. In respect of life assurance this item shall comprise, on the one hand, investments the value of  which is used to determine the value of or the return on policies relating to an investment fund  and, on the other hand, investments serving as cover for liabilities which are determined by  reference to an index. This item shall also comprise investments which are held on behalf of the  members of a tontine and are intended for distribution among them. Article 16Assets:  item F (IV)OtherThis item shall comprise those assets which are not covered  by items F (I), (II) and (III). Where such assets are material, they must be disclosed in the notes  on the accounts. Article 17Assets:  item G (I)Accrued interest and rentThis item shall comprise those items  that represent interest and rent that have been earned up to the balance-sheet date but have not  yet become receivable. Article 18Assets:  item G (II)Deferred acquisition costs1.  The costs of acquiring insurance  policies shall be deferred in accordance with Article 18 of Directive 78/660/EEC in so far as such  deferral is not prohibited by Member States. 2.  Member States may, however, permit the deduction of acquisition costs from unearned premiums in  non-life-insurance business and their deduction by an actuarial method from mathematical reserves  in life-assurance business. Where this method is used, the amounts deducted from the provisions  must be indicated in the notes on the accounts. Article 19Liabilities:  item A (I)Subscribed capital or equivalent fundsThis item shall  comprise all amounts, irrespective of their actual designations, which, in accordance with the  legal structure of an insurance undertaking, are regarded under the national law of the Member  State concerned as equity capital subscribed by the shareholders or other persons. Article 20Liabilities:  item A (IV)ReservesThis item shall comprise all the types of reserves  listed in Article 9 of Directive 78/660/EEC under liabilities item A (IV), as defined therein. The  Member States may also require other types of reserves if necessary for insurance undertakings the  legal structures of which are not covered by Directive 78/660/EEC. Reserves shall be shown separately, as sub-items of liabilities item A (IV), in the balance sheets  of the insurance undertakings concerned, except for the revaluation reserve, which shall be shown  as a liability under A (III). Article 21Liabilities:  item BSubordinated liabilitiesWhere it has been contractually agreed  that, in the event of winding up or of bankruptcy, liabilities, whether or not represented by  certificates, are to be repaid only after the claims of all other creditors have been met, the  liabilities in question shall be shown under this item. Article 22Where a Member States permits an undertaking's balance sheet to include funds the  allocation of which either to policyholders or to shareholders has not been determined by the close  of the financial year, those amounts shall be shown as liabilities under an item Ba (Fund for  future appropriations). Variations in this item shall derive from an item II (12a) (Transfers to or from the fund for  future appropriations) in the profit and loss account. Article 23Liabilities:  item CTechnical provisionsArticle 20 of Directive 78/660/EEC shall  apply to technical provisions, subject to Articles 24 to 30 of this Directive. Article 24Liabilities:  items C (1) (b), (2) (b), (3) (b), (4) (b) and (6) (b) and D  (b)Reinsurance amounts1.  The reinsurance amounts shall comprise the actual or estimated amounts  which, under contractual reinsurance arrangements, are deducted from the gross amounts of technical  provisions. 2.  As regards the provision for unearned premiums, the reinsurance amounts shall be calculated  according to the methods referred to in Article 57 or in accordance with the terms of the  reinsurance policy. 3.  Member States may require or permit the reinsurance amounts to be shown as assets. Where this  option is exercised, those amounts shall be shown as assets under an item Da (Reinsurers' share of  technical provisions), subdivided as follows: 1.  Provision for unearned premiums2. Life assurance provision3. Claims outstanding4. Provisions for bonuses and rebates (unless shown under 2)5. Other technical provisions6. Technical provisions for life-assurance policies where the investment risk is borne by the  policyholders. Notwithstanding Article 5, these items shall not be combined. Article 25Liabilities:  item C (1)Provision for unearned premiumsThe provision for unearned  premiums shall comprise the amount representing that part of gross premiums written which is to be  allocated to the following financial year or to subsequent financial years. In the case of life  assurance Member States may, pending further harmonization, require or permit the provision for  unearned premiums to be included in item C (2). If, pursuant to Article 26, item C (1) also includes the amount of the provision for unexpired  risks, the description of the item shall be 'Provision for unearned premiums and unexpired risks`.  Where the amount for unexpired risks is material, it shall be disclosed separately either in the  balance sheet or in the notes on the accounts. Article 26Liabilities:  item C (6)Other technical provisionsThis item shall comprise, inter  alia, the provision for unexpired risks, i.e. the amount set aside in addition to unearned premiums  in respect of risks to be borne by the insurance undertaking after the end of the financial year,  in order to provide for all claims and expenses in connection with insurance contracts in force in  excess of the related unearned premiums and any premiums receivable on those contracts. However, if  national legislation so provides, the provision for unexpired risks may be added to the provision  for unearned premiums, as defined in Article 25, and included in the amount shown under item C  (1). Where the amount of unexpired risks is significant, it shall be disclosed separately either in the  balance sheet or in the notes on the accounts. Where the option provided for in the second paragraph of Article 3 is not exercised, this item  shall also include the ageing reserves. Article 27Liabilities:  item C (2)Life assurance provisionThe life assurance provision shall  comprise the actuarially estimated value of an insurance undertaking's liabilities including  bonuses already declared and after deducting the actuarial value of future premiums. Article 28Liabilities:  item C (3)Claims outstandingThe provision for claims outstanding shall  be the total estimated ultimate cost to an insurance undertaking of settling all claims arising  from events which have occured up to the end of the financial year, whether reported or not, less  amounts already paid in respect of such claims. Article 29Liabilities:  item C (4)Provision for bonuses and rebatesThe provision for bonuses  and rebates shall comprise amounts intended for policyholders or contract beneficiaries by way of  bonuses and rebates as defined in Article 39 to the extent that such amounts have not been credited  to policyholders or contract beneficiaries or included in an item Ba (Fund for future  appropriations), as provided for in Article 22, first paragraph, or in item C (2). Article 30Liabilities:  item C (5)Equalization provision1.  The equalization provision shall  comprise any amounts set aside in compliance with legal or administrative requirements to equalize  fluctuations in loss ratios in future years or to provide for special risks. 2.  Where, in the absence of any such legislative or administrative requirements, reserves within  the meaning of Article 20 have been constituted for the same purpose, this shall be disclosed in  the notes on the accounts. Article 31Liabilities:  item DTechnical provisions for life-assurance policies where the  investment risk is borne by the policyholders. This item shall comprise technical provisions constituted to cover liabilities relating to  investment in the context of life assurance policies the value of or the return on which is  determined by reference to investments for which the policyholder bears the risk, or by reference  to an index. Any additional technical provisions constituted to cover death risks, operating expenses or other  risks (such as benefits payable at the maturity date or guaranteed surrender values) shall be shown  under item C (2). Item D shall also comprise technical provisions representing the obligations of a tontine's  organizer vis-à-vis its members. Article 32Liabilities:  item FDeposits received from reinsurersIn the balance sheet of an  undertaking ceding reinsurance this item shall comprise amounts deposited by or withheld from other  insurance undertakings under reinsurance contracts. These amounts may not be merged with other  amounts owed to or by the other undertakings in question. Where an undertaking ceding reinsurance has received as a deposit securities which have been  transferred to its ownership, this item shall comprise the amount owed by the ceding undertaking by  virtue of the deposit. SECTION 5 Layout of the profit and loss account Article 331.  The Member States shall  prescribe the layout shown in Article 34 for profit and loss accounts. 2.  The technical account for non-life-insurance business shall be used for those classes of direct  insurance which are within the scope of Directive 73/239/EEC and for the corresponding classes of  reinsurance business. 3.  The technical account for life-assurance business shall be used for those classes of direct  insurance which are within the scope of Directive 79/267/EEC and for the corresponding classes of  reinsurance business. 4.  Member States may require or permit undertakings the activities of which consist wholly of  reinsurance to use the technical account for non-life-insurance business for all their business.  This shall also apply to undertakings underwriting direct non-life-insurance and also reinsurance. Article 34Profit and loss accountIII.  Technical account - Non-life-insurance business 1.   Earned premiums, net of reinsurance: (a)  gross premiums written. (b)outward reinsurance premiums ( ). . (c)change in the gross provision for unearned premiums and, in so far as national legislation  authorizes the inclusion of this provision in liabilities item C (1), in the provision for  unexpired risks (+/ ). (d)change in the provision for unearned premiums, reinsurers' share (+/ ). . .  2. Allocated investment return transferred from the non-technical account (item III (6)).  3. Other technical income, net of reinsurance.  4. Claims incurred, net of reinsurance: (a)claims paid(aa)  gross amount.(bb)reinsurers' share ( ). . (b)change in the provision for claims, (aa)gross amount. (bb)reinsurers' share ( ). . .  5. Changes in other technical provisions, net of reinsurance, not shown under other headings (+/ ).  6. Bonuses and rebates, net of reinsurance.  7. Net operating expenses: (a)acquisition costs. (b)change in deferred acquisition costs (+/ ). (c)administrative expenses. (d)reinsurance commissionsand profit participation ( ). .  8. Other technical charges, net of reinsurance.  9. Change in the equalization provision (+/ ). 10. Sub-total (balance on the technical account for non-life-insurance business (item III 1)). . III. Technical account - Life-assurance business 1.  Earned premiums, net of reinsurance: (a)  gross premiums written. (b)outward reinsurance premiums ( ). (c)change in the provision for unearned premiums, net of reinsurance (+/ ). .  2. Investment income: (a)income from participating interests, with a separate indication of that derived from affiliated undertakings ................. . (b)income from other investments, with a separate indication of that derived from affiliated undertakings ................. (aa)  income from land and buildings. (bb)income from other investments. . (c)value re-adjustments on investments. (d)gains on the realization of investments. .  3. Unrealized gains on investments.  4. Other technical income, net of reinsurance.  5. Claims incurred, net of reinsurance: (a)claims paid(aa)gross amount. (bb)reinsurers' share ( ). . (b)change in the provision for claims(aa)gross amount. (bb)reinsurers' share ( ). . .  6. Change in other technical provisions, net of reinsurance, not shown under other headings (+/ ): (a)life assurance provision, net of reinsurance(aa)gross amount. (bb)reinsurers' share ( ). . (b)other technical provisions, net of reinsurance. .  7. Bonuses and rebates, net of reinsurance.  8. Net operating expenses: (a)acquisition costs, . (b)change in deferred acquisition costs (+/ ). (c)administrative expenses. (d)reinsurance commissionsand profit participation ( ). .  9. Investment charges: (a)investment management charges, including interest. (b)value adjustments on investments. (c)losses on the realization of investments. . 10. Unrealized losses on investments. 11. Other technical charges, net of reinsurance. 12. Allocated investment return transferred to the non-technical account ( ) (item III 4)). 13. Sub-total: (balance on the technical account - life assurance business) (item III 2)). III. Non-technical account 1.  Balance on the technical account - non-life-insurance business (item I  (10)).  2. Balance on the technical account - life-assurance business (item II (13)).  3. Investment income(a)  income from participating interests, with a separate indication of that derived from affiliated undertakings ................. . (b)income from other investments, with a separate indication of that derived from affiliated undertakings ................. (aa)  income from land and buildings. (bb)income from other investments. . (c)value re-adjustments on investments. (d)gains on the realization of investments. .  4. Allocated investment return transferred from the life-assurance technical account (item II (12)).  5. Investment charges: (a)investment management charges, including interest. (b)value adjustments on investments. (c)losses on the realization of investments. .  6. Allocated investment return transferred to the non-lifeinsurance technical account (item I 2)).  7. Other income.  8. Other charges, including value adjustments.  9. Tax on profit or loss on ordinary activities. 10. Profit or loss on ordinary activities after tax. 11. Extraordinary income. 12. Extraordinary charges. 13. Extraordinary profit or loss. 14. Tax on extraordinary profit or loss. 15. Other taxes not shown under the preceding items. 16. Profit or loss for the financial year. SECTION 6 Special provisions relating to certain profit-and-loss-account items Article  35Non-life-insurance technical account:  item I (1) (a)Life-assurance technical account:  item  II (1) (a)Gross premiums writtenGross premiums written shall comprise all amounts due during the  financial year in respect of insurance contracts regardless of the fact that such amounts may  relate in whole or in part to a later financial year, and shall include inter alia: ii(i)  premiums yet to be written, where the premium calculation can be done only at the end of the  year: i(ii)- single premiums, including annuity premiums,- in life assurance, single premiums resulting from bonus and rebate provisions in so far as they  must be considered as premiums on the basis of contracts and where national legislation requires or  permits their being shown under premiums; (iii)additional premiums in the case of half-yearly, quarterly or monthly payments and additional  payments from policyholders for expenses borne by the insurance undertaking; (iv)in the case of co-insurance, the undertaking's portion of total premiums; i(v)reinsurance premiums due from ceding and retroceding insurance undertakings, including  portfolio entries, after deduction of: - portfolio withdrawals credited to ceding and retroceding insurance undertakings, and-  cancellations. The above amounts shall not include the amounts of taxes or charges levied with premiums. Article 36Non-life-insurance technical account:  item I (1) (b)Life-assurance technical  account:  item II (1) (b)Outward reinsurance premiumsOutward reinsurance premiums shall comprise  all premiums paid or payable in respect of outward reinsurance contracts entered into by an  insurance undertaking. Portfolio entries payable on the conclusion or amendment of outward  reinsurance contracts shall be added; portfolio withdrawals receivable must be deducted. Article 37Non-life-insurance technical account:  items I (1) (c) and (d)Life-assurance  technical account:  item II (1) (c)Change in the provision for unearned premiums, net of  reinsurancePending further coordination, Member States may, in the case of life assurance, require  or permit the change in unearned premiums to be included in the change in the life assurance  provision. Article 38Non-life-insurance technical account:  item I (4)Life-assurance technical account:   item II (5)Claims incurred, net of reinsurance1.  Claims incurred shall comprise all payments  made in respect of the financial year plus the provision for claims but minus the provision for  claims for the preceding financial year. These amounts shall include annuities, surrenders, entries and withdrawals of loss provisions to  and from ceding insurance undertakings and reinsurers, external and internal claims management  costs and charges for claims incurred but not reported such as referred to in Article 60 (1) (b)  and (2) (a). Sums recoverable on the basis of subrogation and salvage within the meaning of Article 60 (1) (d)  shall be deducted. 2.  Where the difference between: - the loss provision made at the beginning of the year for outstanding claims incurred in previous  years, and- the payments made during the year on account of claims incurred in previous years and  the loss provision shown at the end of the year for such outstanding claims is material, it shall be disclosed in the notes on the accounts, broken down by category and amount. Article 39Non-life-insurance technical account:  item I (6)Life-assurance technical account:   item II (7)Bonuses and rebates, net of reinsuranceBonuses shall comprise all amounts chargeable  for the financial year which are paid or payable to policyholders and other insured parties or  provided for their benefit, including amounts used to increase technical provisions or applied to  the reduction of future premiums, to the extent that such amounts represent an allocation of  surplus or profit arising on business as a whole or a section of business, after deduction of  amounts provided in previous years which are no longer required. Rebates shall comprise such amounts to the extent that they represent a partial refund of premiums  resulting from the experience of individual contracts. Where material, the amount charged for bonuses and that charged for rebates shall be disclosed  separately in the notes on the accounts. Article 40Non-life-insurance technical account:  item I (7) (a)Life-assurance technical  account:  item II (8) (a)Acquisition costsAcquisition costs shall comprise the costs arising from  the conclusion of insurance contracts. They shall cover both direct costs, such as acquisition  commissions or the cost of drawing up the insurance document or including the insurance contract in  the portfolio, and indirect costs, such as advertising costs or the administrative expenses  connected with the processing of proposals and the issuing of policies. Member States may require policy renewal commissions to be entered in item I (7) (c) or II (8)  (c). Article 41Non-life-insurance technical account:  item I (7) (c)Life-assurance technical  account:  item II (8) (c)Administrative expensesAdministrative expenses shall include the costs  arising from premium collection, portfolio administration, handling of bonuses and rebates, and  inward and outward reinsurance. They shall in particular include staff costs and depreciation  provisions in respect of office furniture and equipment in so far as these need not be shown under  acquisition costs, claims incurred or investment charges. Article 42Life-insurance technical account:  items II (2) and (9)Non-technical account:  items  III (3) and (5)Investment income and charges1.  All investment income and charges relating to  non-life insurance shall be disclosed in the non-technical account. 2.  In the case of an undertaking carrying on life-assurance business only, investment income and  charges shall be disclosed in the life-assurance technical account. 3.  In the case of an undertaking carrying on both life-assurance and non-life-insurance business,  investment income and charges shall, to the extent that they are directly connected with the  carrying on of the life-assurance business, be disclosed in the life-assurance technical account. 4.  Member States may require or permit the disclosure of investment income and charges according  to the origin or attribution of the investments, if necessary by providing for further items in the  non-life-insurance technical account, by analogy with the corresponding items in the life-assurance  technical account. Article 43Non-life-insurance technical account:  item I (2)Life-assurance technical account:   item II (2)Non-technical account:  items III (4) and (6)Allocated investment return1.  Where  part of the investment return is transferred to the non-life-insurance technical account, the  transfer from the non-technical account shall be deducted from item III (6) and added to item I  (2). 2.  Where part of the investment return disclosed in the life-assurance technical account is  transferred to the non-technical account, the amount transferred shall be deducted from item II  (12) and added to item III (4). 3.  Member States may lay down the procedures for and the amounts of transfers of allocated return  from one part of the profit and loss account to another. The reasons for such transfers and the  bases on which they are made shall be disclosed in the notes on the accounts in either event; where  appropriate, a reference to the text of the relevant regulation shall suffice. Article 44Life-assurance technical account:  items II (3) and (10)Unrealized gains and losses  on investments1.  In life-assurance business Member States may permit the disclosure in full or in  part in items II (3) and (10) in the profit and loss account of variations in the difference  between: - the valuation of investments at their current value or by means of one of the methods referred to  in Article 33 (1) of Directive 78/660/EEC, and- their valuation at purchase price. In any event, Member States shall require that the amounts referred to in the first paragraph be  disclosed in the aforementioned items where they relate to investments shown as assets under D. 2.  Member States which require or permit the valuation of the investments shown as assets under C  at their current value may, in respect of non-life-insurance, permit the disclosure in full or in  part in an item III (3a) and in an item III (5a) in the profit and loss account of the variation in  the difference between the valuation of those investments at their current value and their  valuation at purchase price. SECTION 7 Valuation rules Article 45Article 32 of Directive 78/660/EEC, under which the  valuation of items shown in the annual accounts must be based on the principle of purchase price or  production cost, shall apply to investment subject to Articles 46 to 49 of this Directive. Article 461.  Member States may require or permit the valuation of investments shown as assets  under C on the basis of their current value calculated in accordance with Articles 48 and 49. 2.  The investments shown as assets under D shall be shown at their current value. 3.  Where investments are shown at their purchase price, their current value shall be disclosed in  the notes on the accounts. However, Member States in which, on the date of the notification of this Directive, investments are  shown at their purchase price may give undertakings the option of initially disclosing in the notes  on the account the current value of investment shown as assets under C (I) no later than five years  after the date referred to in Article 70 (1) and the current value of other investments no later  than three years after the same date. 4.  Where investments are shown at their current value, their purchase price shall be disclosed in  the notes on the accounts. 5.  The same valuation method shall be applied to all investments included in any item denoted by  an arabic numeral or shown as assets under C (I). 6.  The method applied to each investment item shall be stated in the notes on the accounts. Article 47Where current value is applied to investments, Article 33 (2) and (3) of Directive  78/660/EEC shall apply, except as provided in Articles 37 and 44 of this Directive. Article 481.  In the case of investments other than land and buildings, current value shall mean  market value, save as provided in paragraph 5. 2.  Where investments are officially listed on an official stock exchange, market value shall mean  the value on the balance-sheet date or, when the balance-sheet date is not a stock-exchange trading  day, on the last stock-exchange trading day before that date. 3.  Where a market exists for investments other than those referred to in paragraph 2, market value  shall mean the average price at which such investments were traded on the balance-sheet date or,  when the balance-sheet date is not a trading day, on the last trading day before that date. 4.  Where on the date on which the accounts are drawn up investments such as referred to in  paragraphs 2 or 3 have been sold or are to be sold within the short term, the market value shall be  reduced by the actual or estimated realization costs. 5.  Except where the equity method is applied in accordance with Article 59 of Directive  78/660/EEC, all other investments shall be valued on a basis which has prudent regard to the likely  realizable value. 6.  In all cases the method of valuation shall be precisely described and the reason for adopting  it stated in the notes on the accounts. Article 491.  In the case of land and buildings current value shall mean the market value on the  date of valuation, where relevant reduced as provided in paragraphs 4 and 5. 2.  Market value shall mean the price at which land and buildings could be sold under private  contract between a willing seller and an arm's length buyer on the date of valuation, it being  assumed that the property is publicly exposed to the market, that market conditions permit orderly  disposal and that a normal period, having regard to the nature of the property, is available for  the negotiation of the sale. 3.  The market value shall be determined through the separate valuation of each land and buildings  item, carried out at least every five years according to methods generally recognized or recognized  by the insurance supervisory authorities. Article 35 (1) (b) of Directive 78/660/EEC shall not  apply. 4.  Where the value of any land and buildings item has diminished since the preceding valuation  under paragraph 3, an appropriate value adjustment shall be made. The lower value thus arrived at  shall not be increased in subsequent balance sheets unless such increase results from a new  determination of market value arrived at in accordance with paragraphs 2 and 3. 5.  Where on the date on which the accounts are drawn up land and buildings have been sold or are  to be sold within the short term, the value arrived at in accordance with paragraphs 2 and 4 shall  be reduced by the actual or estimated realization costs. 6.  Where it is impossible to determine the market value of a land and buildings item, the value  arrived at on the basis of the principle of purchase price or production cost shall be deemed to be  the current value. 7.  The method by which the current value of land and buildings has been arrived at and their  breakdown by financial year of valuation shall be disclosed in the notes on the accounts. Article 50Where Article 33 of Directive 78/660/EEC is applied to insurance undertakings, it  shall be so in the following manner: (a)  paragraph 1 (a) shall apply to assets shown under F (I) as defined in Article 6 of this  Directive; (b)paragraph 1 (c) shall apply to assets shown under C (I), (II), (III) and (IV) and F (I) (except  for stocks) and (III) as defined in Article 6 of this Directive. Article 51Article 35 of Directive 78/660/EEC shall apply to insurance undertakings subject to  the following provisions: (a)it shall apply to assets shown under B and C and to fixed assets shown under F (I) as defined  in Article 6 of this Directive; (b)paragraph 1 (c) (aa) shall apply to assets shown under C (II), (III) and (IV) and F (III) as  defined in Article 6 of this Directive. Member States may require that value adjustments be made in respect of transferable securities  shown as investments, so that they are shown at the lower value to be attributed to them at the  balance-sheet date. Article 52Article 38 of Directive 78/660/EEC shall apply to assets shown under F (I) as defined  in Article 6 of this Directive. Article 53Article 39 of Directive 78/660/EEC shall apply to assets shown under E (I), (II) and  (III) and F (II) as defined in Article 6 of this Directive. Article 54In non-life insurance the amount of any deferred acquisition costs shall be  established on a basis compatible with that used for unearned premiums. In life assurance the calculation of the amount of any acquisition costs to be deferred may be  taken into the actuarial calculation referred to in Article 59. Article 551.  (a)  If they have not been valued at market value, debt securities and other  fixed-income securities shown as assets under C (II) and (III) shall be shown in the balance sheet  at purchase price. Member States may, however, require or permit such debt securities to be shown  in the balance sheet at the amount repayable at maturity. (b)Where the purchase price of the securities referred to in point (a) exceeds the amount  repayable at maturity, the amount of the difference shall be charged to the profit and loss  account. Member States may, however, require or permit the amount of the difference to be written  off in instalments so that it is completely written off when the securities are repaid. That  difference must be shown separately in the balance sheet or in the notes on the accounts. (c)Where the purchase price of the securities referred to in point (a) is less than the amount  repayable at maturity, Member States may require or permit the amount of the difference to be  released to income in instalments over the period remaining until repayment. That difference must  be shown separately in the balance sheet or in the notes on the accounts. 2.  Where debt securities or other fixed-income securities that are not valued at market value are  sold before maturity and the proceeds are used to purchase other debt securities or fixed-income  securities, Member States may permit the difference between the proceeds of sale and their book  value to be spread uniformly over the period remaining until the maturity of the original  investment. Article 56Technical provisionsThe amount of technical provisions must at all times be such that  an undertaking can meet any liabilities arising out of insurance contracts as far as can reasonably  be foreseen. Article 57Provision for unearned premiums1.  The provision for unearned premiums shall in  principle be computed separately for each insurance contract. Member States may, however, permit  the use of statistical methods, and in particular proportional and flat-rate methods, where they  may be expected to give approximately the same results as individual calculations. 2.  In classes of insurance where the assumption of a temporal correlation between risk experience  and premium is not appropriate, calculation methods shall be applied that take account of the  differing pattern of risk over time. Article 58Provision for unexpired risksThe provision for unexpired risks referred to in Article  26 shall be computed on the basis of claims and administrative expenses likely to arise after the  end of the financial year from contracts concluded before that date, in so far as their estimated  value exceeds the provision for unearned premiums and any premiums receivable under those  contracts. Article 59Life assurance provision1.  The life assurance provision shall in principle be  computed separately for each life assurance contract. Member States may, however, permit the use of  statistical or mathematical methods where they may be expected to give approximately the same  results as individual calculations. A summary of the principal assumptions made shall be given in  the notes on the accounts. 2.  The computation shall be made annually by an actuary or other specialist in this field on the  basis of recognized actuarial methods. Article 60Provisions for claims outstanding1.  Non-life insurance(a)  A provision shall in  principle be computed separately for each case on the basis of the costs still expected to arise.  Statistical methods may be used if they result in an adequate provision having regard to the nature  of the risks; Member States may, however, make the application of such methods subject to prior  approval. (b)This provision shall also allow for claims incurred but not reported by the balance-sheet date;  its amount shall be determined having regard to past experience as to the number and magnitude of  claims reported after the balance-sheet date. (c)Claims settlement costs shall be included in the calculation of the provision irrespective of  their origin. (d)  Recoverable amounts arising out of the acquisition of the rights of policyholders with respect  to third parties (subrogation) or of the legal ownership of insured property (salvage) shall be  deducted from the provision for claims outstanding; they shall be estimated on a prudent basis.  Where such amounts are material, they shall be disclosed in the notes on the accounts. (e)By way of derogation from subparagraph (d), Member States may require or permit the disclosure  of recoverable amounts as assets. (f)Where benefits resulting from a claim must be paid in the form of annuity, the amounts to be  set aside for that purpose shall be calculated by recognized actuarial methods. (g)Implicit discounting or deductions, whether resulting from the placing of a present value on a  provision for an outstanding claim which is expected to be settled later at a higher figure or  otherwise effected, shall be prohibited. Member States may permit explicit discounting or deductions to take account of investment income.  N° such discounting or deductions shall be permissible unless: ii(i)  the expected average date for the settlement of claims is at least four years after the  accounting date; i(ii)the discounting or deduction is effected on a recognized prudential basis; the competent  authority must be given advance notification of any change in method; (iii)when calculating the total cost of settling claims, an undertaking takes account of all  factors that could cause increases in that cost; (iv)an undertaking has adequate data at its disposal to construct a reliable model of the rate of  claims settlements; i(v)the rate of interest used for the calculation of present values does not exceed a prudent  estimate of the investment income from assets invested as a provision for claims during the period  necessary for the payment of such claims. Moreover, it must not exceed either of the following: - the investment income from such assets over the preceding five years, - the investment income from such assets during the year preceding the balance-sheet date. When discounting or effecting deductions, an undertaking shall, in the notes on its accounts,  disclose  the total amount of provisions before discounting or deduction, the categories of claims  which are discounted or from which deductions have been made and, for each category of claims, the  methods used, in particular the rates used for the estimates referred to in the preceding  subparagraph, points (iii) and (v), and the criteria adopted for estimating the period that will  elapse before the claims are settled. 2.  Life insurance(a)  The amount of the provision for claims shall be equal to the sums due to  beneficiaries, plus the costs of settling claims. It shall include the provision for claims  incurred but not reported. (b)Member States may require the disclosure in liabilities item C (2) of the amounts referred to  in (a). Article 611.  Pending further coordination, Member States may require or permit the application  of the following methods where, because of the nature of the class or type of insurance in  question, information about premiums receivable, claims payable or both for the underwriting years  is insufficient when the annual accounts are drawn up for accurate estimates to be made. Method 1The excess of the premiums written over the claims and expenses paid in respect of  contracts commencing in the underwriting year shall form a technical provision which is included in  the technical provision for claims outstanding shown in the balance sheet in liabilities item C  (3). The provision may also be computed on the basis of a given percentage of the premiums written  where such a method is appropriate for the type of risk insured. Should the need arise, the amount  of this technical provision shall be increased to make it sufficient to meet present and future  obligations. The technical provision constituted by this method shall be replaced by a provision  for claims outstanding estimated in the usual manner as soon as sufficient information has been  gathered and not later than the end of the third year following the underwriting year. Method 2The figures shown in the technical account or in certain items within it shall relate to a  year which wholly or partly precedes the financial year. It must not do so by more than 12 months.  The amounts of the technical provisions shown in the annual accounts shall if necessary be  increased to make them sufficient to meet present and future obligations. 2.  Where one of the methods described in paragraph 1 is adopted, it shall be applied  systematically in successive years unless circumstances justify a change. The use of either method  shall be disclosed in the notes on the accounts and the reasons given; in the event of a change in  the method applied, the effect on the assets, liabilities, financial position and profit or loss  shall be indicated in the notes on the accounts. Where Method 1 is used, the length of time that  elapses before a provision for claims outstanding is constituted on the usual basis shall be  disclosed in the notes on the accounts. Where Method 2 is used, the length of time by which the  earlier year to which the figures relate precedes the financial year and the magnitude of the  transactions concerned shall be disclosed in the notes on the accounts. 3.  For the purposes of this Article, 'underwriting year` shall mean the financial year in which  the insurance contracts in the class or type of insurance in question commenced. Article 62Pending further coordination, those Member States which require the constitution of  equalization provisions shall prescribe the valuation rules to be applied to them. SECTION 8 Contents of the notes on the accounts Article 63In place of the information  provided for in Article 43 (1) (8) of Directive 78/660/EEC, insurance undertakings shall provide  the following particulars: III.  As regards non-life insurance, the notes on the accounts shall disclose: 1.  gross premiums written; 2. gross premiums earned; 3.gross claims charges; 4. gross operating expenses; 5. the reinsurance balance. These amounts shall be shown broken down between direct insurance and reinsurance acceptances, if  reinsurance acceptances amount to 10 % or more of gross premiums written, and then within direct  insurance into the following groups of classes: - accident and health, - motor, third-party liability, - motor, other classes, - marine, aviation and transport, - fire and other damage to property, - third-party liability, - credit and suretyship, - legal expenses, - assistance, - miscellaneous. The breakdown into groups of classes within direct insurance shall not be required where the amount  of the gross premiums written in direct insurance for the group in question does not exceed ECU 10  million. However, undertakings shall in any case disclose the amounts relating to the three largest  groups of classes in their business. III. As regards life assurance, the notes on the accounts shall disclose: 1.  gross premiums written, broken down between direct insurance and reinsurance acceptances, if  reinsurance acceptances amount to 10 % or more of gross premiums written, and then within direct  insurance to indicate: (a)  ii(i)  individual premiums; i(ii)premiums under group contracts; (b)ii(i)periodic premiums; i(ii)single premiums; (c)ii(i)  premiums from non-bonus contracts; i(ii)premiums from bonus contracts; (iii)premiums from contracts where the investment risk is borne by policyholders. Disclosure of the figure relating to (a), (b) or (c) shall not be required where it does not exceed  10 % of the gross premiums written in direct insurance; 2. the reinsurance balance; III. In the case covered by Article 33 (4), gross premiums broken down between life assurance and  non-life insurance. IV. In all cases, the total gross direct insurance premiums resulting from contracts concluded by the  insurance undertaking- in the Member State of its head office, - in the other Member States, and- in other countries, except that disclosure of the figure relating to the above shall not be required if they do not  exceed 5 % of total gross premiums. Article 64In the notes on their accounts insurance undertakings shall disclose the total amount  of commissions for direct insurance business taken into the accounts for the financial year. This  requirement shall cover commissions of any kind, and in particular acquisition, renewal, collection  and portfolio management commissions. SECTION 9 Provisions relating to consolidated accounts Article 651.  Insurance undertakings  shall draw up consolidated accounts and consolidated annual reports in accordance with Directive  83/349/EEC, save as otherwise provided in this section. 2.  In so far as a Member State does not have recourse to Article 5 of Directive 83/349/EEC,  paragraph 1 shall also apply to parent undertakings, the sole or essential object of which is to  acquire holdings in subsidiary undertakings and turn them to profit, where those subsidiary  undertakings are either exclusively or mainly insurance undertakings. Article 66Directive 83/349/EEC shall apply subject to the following provisions: 1.  Articles 4, 6, and 40 shall not apply; 2.  the information referred to in the first and second indents of Article 9 (2), namely: - the amount of the fixed assets, and- the net turnover, shall be replaced by particulars of the gross premiums written as defined in Article 35 of this  Directive; 3. a Member State may also apply Article 12 of Directive 83/349/EEC to two or more insurance  undertakings which are not connected as described in Article 1 (1) or (2) of the same Directive but  are managed on a unified basis other than pursuant to a contract or provisions of their memoranda  or articles of association. Unified management may also consist of important and durable  reinsurance links; 4. Member States may permit derogations from Article 26 (1) (c) of Directive 83/349/EEC where a  transaction has been concluded according to normal market conditions and has established  policyholder rights. Any such derogation shall be disclosed and where they have a material effect  on the assets, liabilities, financial position and profit or loss of all the undertakings included  in the consolidation that fact shall be disclosed in the notes on the consolidated accounts; 5. Article 27 (3) of Directive 83/349/EEC shall apply provided that the balance-sheet date of an  undertaking included in a consolidation does not precede the consolidated balance-sheet date by  more than six months; 6. Article 29 of Directive 83/349/EEC shall not apply to those liabilities items, the valuation of  which by the undertakings included in a consolidation is based on the application of provisions  specific to insurance undertakings or to those assets items changes in the values of which also  affect or establish policyholders' rights. Where recourse is had to this derogation, the fact shall  be disclosed in the notes on the consolidated accounts. Article 67In consolidated accounts alone Member States may require or permit all investment  income and charges to be disclosed in the non-technical account, even when such income and charges  are connected with life-assurance business. Furthermore, Member States may in such cases require or permit the allocation of part of the  investment return to the life-assurance technical account. SECTION 10 Publication Article 681.  The duly approved annual accounts of insurance  undertakings, together with the annual reports and the reports by the persons responsible for  auditing the accounts, shall be published as laid down by the laws of each Member State in  accordance with Article 3 of Directive 68/151/EEC (;). (;) OJ N° L 65, 14. 3. 1968, p. 8. The laws of a Member State may, however, provide that annual reports need not be published as  provided in the first subparagraph. In that event, they shall be made available to the public at  the undertakings' head offices in the Member State concerned. It must be possible to obtain a copy  of all or part of any such report upon request. The price of such a copy shall not exceed its  administrative cost. 2.  Paragraph 1 shall also apply to the duly approved consolidated accounts, the consolidated  annual report and the reports by the persons responsible for auditing the accounts. 3.  Where an insurance undertaking which has drawn up annual accounts or consolidated accounts is  not established as one of the types of company listed in Article 1 (1) of Directive 78/660/EEC and  is not required by its national law to publish the documents referred to in paragraph 1 and 2 of  this Article as prescribed in Article 3 of Directive 68/151/EEC, it shall at least make them  available to the public at its head office. It must be possible to obtain copies of such documents  on request. The price of such copies shall not exceed their administrative cost. 4.  Member States shall provide for appropriate sanctions for failure to comply with the  publication rules laid down in this Article. SECTION 11 Final provisions Article 69The contact committee set up pursuant to Article 52 of  Directive 78/660/EEC shall also, when constituted appropriately, have the following functions: (a)  to facilitate, without prejudice to Articles 169 and 170 of the Treaty, harmonized application  of this Directive through regular meetings dealing in particular with practical problems arising in  connection with its application; (b)to advise the Commission, if the need arises, on additions or amendments to this Directive. Article 701.  Member States shall adopt the laws, regulations and administrative provisions  necessary for them to comply with this Directive before 1 January 1994. They shall forthwith inform  the Commission thereof. When Member States adopt these measures, they shall include a reference to this Directive or be  accompanied by such reference on the occasion of their official publication. The methods of making  such a reference shall be laid down by the Member States. 2.  Member States may provide that the provisions referred to in paragraph 1 shall first apply to  annual accounts and consolidated accounts for financial years beginning on 1 January 1995 or during  the calendar year 1995. 3.  Member States shall communicate to the Commission the texts of the main provisoins of national  law which they adopt in the field governed by this Directive. Article 71Five years after the date referred to in Article 70 (2) the Council, acting on a  proposal from the Commission, shall examine and if need be revise all those provisions of this  Directive which provide for Member State options in the light of the experience acquired in  applying this Directive and in particular of the aims of greater transparency and harmonization of  the provisions referred to by this Directive. Article 72This Directive is addressed to the Member States. Done at Brussels, 19 December 1991. For the CouncilThe PresidentP. DANKERT(1) OJ N° C 131, 18. 4. 1987, p. 1. (2) OJ N° C 96, 17. 4. 1989, p. 93; and OJ N° C 326, 16. 12. 1991. (3) OJ N° C 319, 30. 11. 1987, p. 13. (4) OJ N° L 222, 14. 8. 1978, p. 11. (5) OJ N° L 317, 16. 11. 1990, p. 60. (6) OJ N° L 193, 18. 7. 1983, p. 1. (7) OJ N° L 228, 16. 8. 1973, p. 3. (8) OJ N° L 330, 29. 11. 1990, p. 44. (1) OJ N° L 63, 13. 3. 1979, p. 1. (2) OJ N° L 330, 29. 11. 1990, p. 50. ANNEX PROVISIONS RELATING TO LLOYD'S A.  GeneralFor the purposes of this Directive,  both Lloyd's and Lloyd's syndicates shall be deemed to be insurance undertakings. Subject to the necessary adaptations set out in section B: - Lloyd's syndicates shall prepare annual accounts ('syndicate accounts`), and- Lloyd's shall  prepare aggregate accounts ('aggregate accounts`) in place of the consolidated accounts prescribed  in Directive 83/349/EEC. In this Annex, 'Lloyd`s accounts' shall mean both types of accounts referred to above. B. Special provisions 1.  Contents of syndicate accountsSubject to paragraph 9, syndicate accounts  shall be prepared on a cumulative basis for three underwriting years of account at a time and shell  comprise a separate underwriting years of account for each such year and a balance sheet for all  such years taken together. Accounts prepared after 12 and 24 months respectively shall be known as  open years. The underwriting account shall be prepared by analogy with the provisions governing the  preparation of the profit and loss account; it shall show, in addition: (a)  for each entry, the change in the figures since the preceding accounting date; (b)the allocated capacity of the syndicate for the relevant underwriting year of account.  2. Contents of aggregate accountsAggregate accounts shall be prepared by cumulation of the accounts  of all Lloyd's syndicates. They shall include a note giving details of: (a)  inter-syndicate business including premiums written and claims paid; (b)the method by which run-off years of account, referred to in paragraph 9, are taken into  account; (c)the method by which the premium income limit for individual members of Lloyd's syndicates is  calculated.  3. CapitalLloyd's and Lloyd's syndicates shall not be required to disclose, in the aggregate accounts  and dyndicate accounts respectively, figures for liabilities items A (I) (Subscribed capital or  equivalent fund), A (II) (Share premium account) and A (IV) (Reserves). Instead, Lloyd's shall  attach a note to the aggregate accounts disclosing the following: (a)  Members' personal resources1.  Lloyd's deposits 2. The Personal Reserve Fund3. The Special Reserve Fund4. Other disclosed means(b)Central resources of Lloyd's1. The net assets of the Central Fund2. The net assets of the Corporation of Lloyd's.  4. Taxation(a)  Lloyd's and Lloyd's syndicates shall not be required to disclose, in the aggregate  accounts and syndicate accounts respectively, figures for liabilities items E (2) (Provisions for  taxation) and G (V) (Other creditors, including tax and social security), as far as tax alone is  concerned, and items III (9) (Tax on profit or loss on ordinary activities) and III (14) (Tax on  extraordinary profit or loss) in the profit and loss account as with the exception of amounts  deducted at source. (b)However, a note to all Lloyd's accounts shall state why a tax charge is not shown and the basic  rate of tax applicable for the amounts deducted at source.  5. Accounting principles(a)  Going concernThe going concern principle set out in Article 31 (1) (a)  of Directive 78/660/EEC shall not apply to Lloyd's accounts. (b)AccrualsThe accruals principle set out in Article 31 (1) (d) of Directive 78/660/EEC shall not  apply to Lloyd's accounts. (c)Allocation of incomeNot more than three years after the date referred to in Article 70 (1),  Lloyd's and Lloyd's syndicates shall allocate income which derives from insurance contracts to  syndicate years of account on an inception date basis. (d)Other accounting principlesIn all Lloyd's accounts: - like items shall receive uniform treatment, - reinsurance recoveries shall be taken into account in respect of open years where a syndicate has  paid a claim, - operating expenses shall be allocated to the underwriting year of account for which they are  incurred.  6. Technical provisionsSubject to paragraph 9 and by way of derogation from Articles 56 and 60,  technical provisions shall not appear in Lloyd's accounts. However: (a)  the underwriting accounts for open years shall show the excess of the premiums collected over  the claims and expenses paid, by analogy with Article 61; (b)a provision for claims outstanding shall be calculated when the underwriting year of account is  closed and shall be shown in accordance with paragraph 8.   7. Open yearsSyndicates shall prepare accounts for open years on a cash receipts and payments basis.  8. Reinsurance to closeSubject to paragraph 9, syndicates shall close their accounts at the end of a  three-year period by payment of a premium ('Reinsurance to close`) and shall disclose at least the  following information: - Gross notified outstanding claims. - Reinsurance recoveries anticipated ( ). - Net notified outstanding claims. - Provision for gross claims incurred but not reported. - Reinsurance recoveries anticipated ( ). - Provision for net claims incurred but not reported. - Net premium for 'reinsurance to close` the year of account (net total).  9. Run-off years of account(a)  For the purposes of this paragraph a run-off year of account shall be  one in respect of which, on the date on which it would normally be closed in accordance with  paragraph 8, uncertainty prevents the determination of the 'reinsurance to close`, and which  accordingly is left open until that uncertainty is resolved. (b)In respect of each run-off year of account, syndicate accounts shall include an underwriting  account showing the amount retained to meet all known and unknown outstanding liabilities, which  represents a provision for claims outstanding estimated in the usual manner. 10. Disclosure of deposits with cedantsFor up to three years after the date referred to in Article 70  (1) Lloyd's and Lloyd's syndicates shall not be required to disclose the figures for assets item C  (IV) (Deposits with ceding untertakings). 11. Life businessBy way of derogation from Article 33 (3), Lloyd's life-assurance business (pure term  life assurance for a period of not more than 10 years) may be shown in Lloyd's accounts in the  format provided for in Article 34 (I) for non-life-insurance business. 12. Gross premiumsBy way of derogation from Article 35, gross premiums may be stated net of brokerage.  By way of addition to the requirements of Article 35 in relation to profit and loss account items I  (1) (a) and II (1) (a) (Gross premiums written, net of reinsurance) a note shall be included: - in each syndicate's accounts explaining the basis upon which commission and brokerage are charged  and giving the estimated average rate of commission and brokerage for each of the main lines of  business written by the syndicate, - in the aggregate accounts giving the estimated average rate of commission and brokerage across  the market. 13. Contents of the notes on Lloyd's accountsIn the notes on Lloyd's accounts the meaning of gross  premiums shall be as set out in paragraph 12.