insurope multinational pooling - complete guide

Global Solutions...locally focused7/2011 © 2011 Insurope

Employee Benefits Multinational Pooling

A complete guide

Contents

Global Solutions 3

Multinational Pooling...the concept 4

Multinational Pooling...the principle 5

Pooling Systems 6

Standard Loss Carry Forward System 7

Limited Loss Carry Forward System 8

Stop Loss System 9

Multipool System 10

Flexible adaptation of Multinational Pooling 11

Global Free Cover Limits and Global Rating Limits 12

Multinational Pooling Accounts 13-17

Worldwide Presence 18-19

Global Solutions...locally focused

2

Global Solutions

3

Insurope

The Insurope network is an association of independent life insurance companies. Set up in the late sixties it has been providing employee benefi t services to multinational companies across the world for over 40 years. Today it is represented in more than 80 countries world-wide (see p.18).

The central area of Insurope’s activity is multinational pooling, a concept which links insured employee benefi t plans world-wide for multinational companies. In a world where the amounts spent on employee benefi ts have become very signifi cant, multinational pooling provides a way for multinational companies to reduce these overheads. If the experience of insured plans is favourable, important cost reductions can arise. The principle aim of the Insurope network is to develop competitive employee benefi t arrangements in today’s global environment.

Insurope, with an impressive growth record over the past 15 years, has solutions to suit all group risk and benefi t plan challenges facing multinational companies and their advisers

• extensive network of employee benefi t specialist group insurance providers in over80 countries

• combined fi nancial strength of many of the largest insurance groups worldwide

• local products designed to requirement across the whole group insurance range:life, pension, disability, accident, medical

• over 40 years experience in multinational pooling

Global strategies for employee benefi ts

As the process of globalisation in many service areas continues to change the way in which multinational companies operate, so too in the area of employee benefi ts the international insurance network is playing an increasingly important role. More and more multinational companies are adopting global employee benefi t strategies. Insurope can play a key role in helping managethese strategies.

Insurope’s aim is to facilitate the global benefi t strategies of its multinational clients by providing one source of employee benefi t services required by headquarters and regional headquarters. This enables multinational companies to provide for, and coordinate the insurance needs of their subsidiaries from one point, in the knowledge that attention is being paid to the activities and services which must be carried out locally for the subsidiary.

Insurope’s key objective remains the economies of scale of a global approach while respecting each country’s customary practice and local regulations.


Multinational Pooling...the concept

4

For customer comment onInsurope services see: www.insurope.com

Multinational pooling allows multinational companies to benefit from favourable insured claims experience on a world-wide basis.

Around the world there exist various methods of financing employee benefits. Many multinational companies choose insurance as a method of financing employee benefit plans. A multinational pooling account is essentially a second stage accounting of insured employee benefit plans at the international level. Such a process introduces the application of administration and risk charge retentions which are based on an accurate assessment of costs incurred in insuring a given group of employee benefit risks internationally. This approach means that ingoing premium levels, even if set by tariff, do not necessarily represent the cost of a given plan. In many cases the real or net cost can be considerably less, depending on the level of insured claims experience.

A multinational pool brings together insured benefit plans (retirement, death, disability, medical, accident) which have been set up locally for two or more countries. Premiums are paid by subsidiaries on a purely local basis, and claims settled by Insurope’s local insurers on a purely local basis. At the end of each experience year the local insurers, involved in a given multinational pooling account, will submit the results of the local plans to Insurope showing amounts held, received and paid in respect of those plans.

A multinational account is then drawn up showing premiums paid minus claims paid as well as the insurer’s risk retention and administration charge as dictated by Insurope. This account also takes into consideration other items such as reserves, interest, non-rated premiums, local taxes, local dividends and commissions.

If the experience of the insured group is favourable, then there will be a surplus in the multinational account, payable to the client as a multinational dividend. Estimates by advisers on multinational pooling suggest that over a period of years an 8% to 15% reduction of local premium costs can be achieved. In single years of good experience, dividend percentages can be substantial, even reaching 80% to 90% of risk premiums paid.

What differentiates Insurope?

• high pooling limits…resulting in more premium pooled hence greater dividends

• worldwide application of high levels of network free cover ...rather than often very low local levels

• worldwide Insurope scale for admin. charges ...rather than “local charges apply”

• full spectrum of pooling systems from loss free to full stop loss or anything in-between

• technical flexibility and high level of expertise

• solutions for linkage to captive insurance arrangements

• the most performant small groups pooling product on the market : Insurope’s Multipool with an average 44% payout ratio since its launch in 1984

• dynamic web enabled CRM system providing customers a more effective development of multinational pooling

Multinational pooling is facilitated by a Multinational Program. This consolidates the insured employee benefit contracts which a multinational company and/or its subsidiaries has underwritten with Insurope network partners, into one umbrella contract set up between the multinational company and Insurope.

Multinational profit & loss accountBy consolidating the insured employee benefits with Insurope network partners worldwide, Insurope is able, through a better spread of risk, to provide the multinational company with a multinational profit & loss account. Through this multinational profit & loss account the multinational company and its subsidiaries receive the benefit of international profit sharing. To simplify, this multinational profit & loss account will identify the difference between premiums and claims. Any positive balance is made available to the multinational company and/or its subsidiaries as a multinational dividend.

Pooling systemThe pooling system protects the result of the multinational profit & loss account. Insurope has a variety of protection ranging from

• Stop loss : a negative result in the multinational profit & loss account is cancelled by the Insurope network.

• Loss carry forward : a negative result in the multinational profit & loss account is transferred to the next year’s account. The level of the negative result to be carried forward is dependent upon the loss limitation features chosen.

• Multipool : a negative result in the multinational profit & loss account is cancelled by Insurope.

• Other adaptations of the pooling system : Loss Free, Global Risk Approach (cash flow enhancement) and Captive Reinsurance are available.

all at no additional cost

The cost for this protection (“risk charge”) will be subtracted within the multinational profit & loss account from the premiums paid, it is NOT an additional cost.

Multinational Pooling... the principle

Insurope partner Insurope partner

Contract A Contract B

Multinational Company

Multinational Program

Insurope

5

Contract A Contract B Total

Income Premiums

100 200 300

Outgo Claims

50 100 150

Result 50 100 150

Pooling Systems

6

Insurope offers a variety of pooling systems which ensure a fl exible solution for the global risk fi nancing of a multinational’s worldwide employee benefi ts.

Each system provides its own specifi c protection of the results of the multinational profi t & loss account.

Insurope single-employer systems

• Stop loss : a negative result in the multinational profi t & loss account is fully cancelled by the Insurope network.

• Loss carry forward : a negative result in the multinational profi t & loss account is, depending on the loss limitation features chosen, transferred to the next year’s account. Standard or adapted aggregate loss limitation options are available. Alternatively, or in combination, a limitation in time to two, three or fi ve years for which a loss can be carried forward (roll over options) may also be adopted.

Insurope multi-employer system

Multipool is the name given to Insurope’s multi-employer arrangement. Protected by a stop loss system, the employee benefi t insured contracts of a multinational company are consolidated with the contracts of other Insurope clients. This thereby achieves a better spread of risk for companies not large enough to have their“own” pool or large companies having, as yet, relatively small numbers of lives insured with Insurope companies.

Pooling system features

• Global free cover limits (see p.11) determine the level of coverage offered by the Insurope network partners without any medical evidence and – in many cases – signifi cantly increase the local level available. When the local Free Cover limits are more generous, the latter will be applied.

• Global rating limits (see p.11) protect the profi t & loss account from high individual claims. These limits serve to exclude from pooling accounts premiums and claim amounts relative to cover above a certain level. Because these Insurope Limits are already very high by market standards the resulting effect is that Insurope include in multinational pooling accounts higher levels of premium, which in turn produces the potential for higher multinational dividends. Insurope global rating limits are the result of over 40 years of experience, and are designed to provide an optimum balance between protection of the pool result and an increase in the overall amount of premiums available for generating dividends. The global rating limits for the Multipool multi-employer system are set at a lower level than an “own” pool or single-employer system.

• Interest : besides the normal crediting of interest to reserves, Insurope credits/debits interest to the cash fl ow generated by the risk insurances included in pooling accounts, taking into account dates of actual premium payment. The interest rates are set on a country by country basis. These local interest rates are also applied to the accumulated surpluses from the end of the related experience year until the time a transfer of multinational dividend is requested. In the same way interest is debited to outstanding losses. No interest is credited on cash fl ow nor is there interest paid on due dividends within the Multipool multi-employer system. This provides an incentive for companies to aspire to the establishment of an “own” pool.

• Risk charge : represents the cost for the protection offered by the pooling system (see diagram p.6).

• Administration charge : represents the cost for the local administration of the various insured benefi t plans included in the pooling system. Charges are governed by an Insurope worldwide network scale.

It is important to underline that the risk and administration charges incurred byinsurers in Insurope pooling arrangements are an integral part of ingoingpremiums and not an additional cost.

Standard Loss Carry Forward System

DescriptionThe standard loss carry forward system is a pooling system, in which any losses in the multinational profi t & loss account are carried forward to next year’s account to be offset by future surpluses. An integrated loss cancellation level limits the amount of loss carried forward. A risk charge relative to the level of protection provided by the standard loss carry forward system is applied (see diagram below).

Requirements• Group insured contracts in force with Insurope network partners in at least two countries, eligible for

inclusion.• Minimum 1,000 lives*. • No minimum annual premium.

*As a rule Insurope recommends the use of the Multipool system for pooling accounts below 1,000 lives. Our experience shows that single-employer systems are only normally viable above 1,000 lives. Valid exceptions to this can however be considered.

Treatment of the result• A surplus A surplus is made available in full at the end of the year. • A loss

If an overall loss arises, this loss is carried forward to be offset by surpluses in future years, but the maximum loss carried forward is limited by means of a standard aggregate loss limitation level. This standard loss cancellation level puts a limit equal to two times the pool death and disability premiums (within the global rating limits range) on the amount of loss which may be carried forward. Any excess loss over this amount is borne by the Insurope network. Insurope can offer lower or higher aggregate loss limitation options in line with the multinational company’s attitude to aggregate risk. In addition to this, the excess of a single claim above the global free cover and rating limits (see p.12) is absorbed by Insurope. If required, lower limits on a single claim can also be considered.

Multinational Pooling is essentially a mechanism, which in the area of the funding of insured employee benefi t plans, allows companies to benefi t from the incidence of favourable claims experience when this occurs...with greater or lesser levels of protection. Put simplistically the Loss Carry Forward system with its built-in “carry forward” of losses tends towards a more self insured approach as this diagram indicates.

7

For account examples see “Loss Carry Forward Accounts”(p.13-14)

Towards a more “insured” approach

Towards a more “self-insured” approach

Risk Spectrum

As protection increases, risk charge increases

Loss free

(zero risk charge =no protection of pooling account result)

Stop loss

(higher risk charge = full protection of pooling account result)

Loss carry forward

3 yearoption

standardLCF

5 yearoption

2 yearoption

Limited Loss Carry Forward System

Insurope can implement a limited loss carry forward pooling arrangement on a 2, 3 or 5 year basis. Such a system actually limits in time the “carry forward” of losses to future years via a range of roll over options.

For example, under the 2 year roll over option, the system guarantees that the accrual of loss during a particular year will only be carried forward for maximum two years. After this period, the remaining balance, which was not offset by potential surpluses during that period will be cancelled.

The advantage of such a system is that poor experience, occurring in a particular year, will only impact the pool for a limited period.

Example of a 2 year roll over loss carry forward system

Result Balance Carried forward Loss cancelled

End year 2005 -100 -100 0

End year 2006 50 -50 0

End year 2007 20 0 30

End year 2008 -100 -100 0

End year 2009 -50 -150 0

End year 2010 30 -50 70

End year 2011 10 0 40

Rationale :

At the end of year 2007 the loss from ‘05 had been outstanding for 2 years and therefore the remaining balance of -30 : (-100+50(surplus 2006)+20(surplus 2007)) is cancelled.

At the end of year 2010 the loss from ‘08 had been outstanding for 2 years and therefore the remaining balance of -70 : (-100+0(no surplus in 2009)+30(surplus 2010)) is cancelled.

At the end of year 2011 the loss from ‘09 had been outstanding for 2 years and therefore the remaining balance of -40 : (-50+0 (surplus 2010 already used as offset for loss 2008)+10(surplus 2011)) is cancelled.

Surplus results cannot be used twice for offset purposes therefore the “FIFO” (“first in first out”) principle applies.

Limited loss carry forward options are only available to pools above 1,000 lives. If a pool should thereafter fall below this, a transfer to the Multipool system (see p.10) would apply with appropriate consideration taken in respect of any loss being carried forward at that point in time.

Risk charge levels for limited loss carry forward alternatives are adjusted accordingly to take into account a greater or lesser risk of loss cancellation.

Roll over options may be used in combination with aggregate loss limitation options (see p.7).

In addition, the excess of a single claim above the global free cover and rating limits (see p.12) is absorbed by Insurope. If required, lower limits on a single claim can also be considered.

8

Stop Loss System

9

For account examples see “Stop Loss Accounts” (p.15-16)

DescriptionThe stop loss system is a single-employer pooling system, in which losses in the multinational profi t & loss account in any year are automatically cancelled by the Insurope network. Due to this increased level of protection the risk charge or stop loss premium, as it is referred to within the stop loss system, is greater than the risk charge under the loss carry forward system (see diagram p.7).

Requirements• Group insured contracts in force with Insurope network partners in at least two countries, eligible

for inclusion.• Minimum 1,000 lives*.• No minimum annual premium.

*As a rule, Insurope recommends the use of the Multipool system for pooling accounts below 1,000 lives. Our experience shows that single employer systems are normally only sustainable above 1,000 lives. Valid exceptions to this can however be considered.

Treatment of the result• A surplus The surplus is credited to the multinational company as a multinational dividend.

• A lossAny loss is cancelled by the Insurope network and therefore NOT carried forward to thenext year’s account. In addition, the excess of a single claim above the global free cover and rating limits (see p.12) is absorbed by Insurope. If required, lower limits on a single claim canalso be considered.

Independent Employee Benefi t Advisers

Long respected by the international consulting community as a favoured pooling provider, Insurope has for many years worked actively with brokers and consultants at both international and local levels.

Support in education and training on the concept of multinational pooling and Insurope’s systems is a core service provided by Insurope to the broker and consulting community.

Should your company require such support, please email [email protected]

Information and advice on employee benefi ts at a country level

It is Insurope’s philosophy to provide succinct up to date Country Profi le, Market Trend and Typical Benefi t Plan information per country.* This then allows customers to turn to the more comprehensive sources, provided by independent international or local employee benefi t consultancies, for further information and advice should any action on, or review of, benefi t plan design be envisaged.

* see www.insurope.com under the network partners section, by clicking on the name of the country in question

Multipool System

10

For account examples see “Multipool Account” (p.17)

For Multipool results year on year since inception see Multipool section of the Insurope website at www.insurope.com

DescriptionMultipool is a multi-employer pooling arrangement protected by a stop loss system, in which losses in the overall multinational profit & loss account in any year are automatically cancelled by the Insurope network. A risk charge relative to the stop loss protection of the profit and loss account is applied (see diagram p.7). Due to the large number of companies participating in Multipool this charge is relatively low. On the other hand, within Multipool, deficit results from “other” companies are first offset before arriving at an overall surplus result.

Requirements• Group insured contracts in force with Insurope network partners in at least two countries, with at least

one group contract eligible for inclusion.

• No minimum number of lives* but a maximum of 1,000 lives is applied unless premiums are less than

0 300,000.

• No minimum annual premium.

*As a rule, Insurope recommends the use of the Multipool system for pooling accounts below 1,000 lives.

Valid exceptions to this can however be considered.

Treatment of the result

• A surplus If experience for a year is such that there is an overall surplus in Multipool, dividends will be paid in

respect of those (subsidiary) companies which produce a surplus result, irrespective of the combined result of the subsidiaries of a given multinational parent company client.* Dividends are paid in proportion to contribution to overall surplus. If a contract has produced a negative result, it has not therefore contributed to the overall positive result and in turn no multinational dividend is paid in respect of that contract.

*This is different to market practice, which usually first offsets deficit results for subsidiaries of the same

multinational. In contrast, Insurope give a greater chance of dividends being paid for some, if not all, operations

of the same multinational firm each year. Another advantage of Insurope’s Multipool is that it offers high ratings

limits, even for such small groups, and therefore pools more premium.

• A lossIf there is an overall loss within the Multipool system in a given year, no multinational dividend is payable. As the Multipool account is protected by a stop loss system, any loss is cancelled by Insurope and therefore NOT carried forward to the next year’s account. In addition, the excess of a single claim above the global free cover and rating limits (see p.12) is absorbed by Insurope.

• Track record The market-leading track record of Multipool is impressive over the long term. Average dividends payable from Multipool, since its launch in 1984, run at a 44% average payout of own positive results, over the lifetime of this pooling product. Over good years this can represent as much as a 17% reduction in risk premiums. This is a healthy reduction in costs for any multinational group, however big or small. Since its inception Multipool has paid dividends in all years except 1984 and 1993.

Flexible adaptation of Multinational Pooling

Loss Free (or partial Loss Free)Insurope’s loss free system can enable the multinational company to come as close as possible to the financial result of an “Administration Services Only” arrangement.

The basis of this system is similar to a loss carry forward system, but Insurope is allowed to recoup any accrued losses. The timing of the recovery is determined within the agreement. The fact that losses can be recovered, means that the loss cancellation level applied within the loss carry forward system is eliminated and therefore no risk charge is levied.

Insurope can provide a partial loss free system where the multinational company is only liable to repay outstanding losses to a certain level, in which case an appropriate risk charge is levied.

Global Risk Approach (cash flow enhancement)The global risk approach is a global underwriting system for death and disability coverages based on the multinational company’s global experience.

The aim of this system is to provide the multinational company with an “upfront multinational discount” on the related premiums, enhancing the cash flow position of the multinational company.

With this system, Insurope moves away from a country by country pricing of these coverages and the assessment of the overall risk is done on a multinational level.

In practical terms, the application of this system means, wherever possible or appropriate, the local pricing is revised downwards to a level of pricing set on a multinational basis.

Once the local pricing is adjusted based on the global risk approach, further savings due to the multinational pooling of these plans, through a loss carry forward or a stop loss system, may still be possible.

Captive ReinsuranceWith this system the multinational company’s reinsurance captive takes part in the Multinational Program. In doing so, the multinational company can integrate the provision of risk benefits with the overall risk management philosophy adopted by the captive. The level of participation can be multiple :

• Transfer of the multinational dividend to the captive

The multinational company’s captive becomes the holder of the Multinational Program and receives the multinational dividend.

• Transfer of the pooling risk to the captive

The multinational company’s captive assumes risk related to the pooling system upon which therefore no risk charge is levied.

• Transfer of risk related reserves to the captive

Reserves for ‘Incurred But Not Reported” claims held at the year end by Insurope network partners, as a provision for insured but yet unknown claims, can be transferred (if legally possible) – together with the liability they cover – to the captive.

11

w

Global Free Cover Limits and Global Rating Limits

Global free cover limits determine the level of coverage offered by the Insurope network partners without any medical evidence. In many cases these signifi cantly increase the local level available. However, when the local free cover limits are more generous, the latter will be applied, although the pool global rating limits will remain unchanged.

Global rating limits protect the profi t and loss account by excluding from the pooling account premium and claims amounts relative to cover above a certain limit. This reduces the impact of high individual claims on the pool profi t and loss result.

Both sets of limits are identical as they are intrinsically linked. In order to facilitate the provision of a global free cover system across diverse local markets, the same limits are required to allow a consequent sharing of risk between pool insurers up to these uniform levels.

The global free cover limits and global rating limits, applied as of January 1 of each year, to plans included in Insurope multinational profi t & loss accounts are given below.

The global rating limits used in the multinational profi t & loss account are determined at the effective date of each Multinational Program, and each subsequent anniversary date of the Multinational Program, according to the exchange rates applicable on the fi rst business day in October preceding such date.

Each year, the global free cover limits and the global rating limits are communicated to the multinational company. These limits are subject to annual modifi cation by Insurope to account for infl ation and exchangerate fl uctuation.

Single Company Multinational Pools

Global Free Cover and Global Rating Limits for pools with more than 5,000 lives

Sum assured on death or on total and permanent disablement rider* 0 1,150,000

Disability pension benefi t (per annum) or 0 85,000

Separate sum assured on total and permanent disablement 0 1,150,000

Global Free Cover and Global Rating Limits for pools with less than 5,000 lives

Sum assured on death or on total and permanent disablement rider* 0 850,000


Separate sum assured on total and permanent disablement 0 850,000

Multipool**

Global Free Cover and Global Rating Limits

Sum assured on death or on total and permanent disablement rider* 0 700,000


Separate sum assured on total and permanent disablement 0 700,000

The above limits are applicable for 2011.Current limits are constantly available at www.insurope.com.

*This applies to total sums on death including survivors’ pensions.

**Lower than standard limits may apply in Multipool for total pooled volumeof less than 500 lives.

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Loss Carry Forward Account (positive result)

Country Australia Belgium Denmark France Japan Norway Singapore Spain UK TOTAL

INCOME

Reserves

-contractual benefi ts 0 418,533 505,871 0 0 0 0 0 0 924,404

-local dividends 9,065 17,296 0 0 26,748 0 0 611 0 53,720

-IBNR 0 0 0 0 0 0 0 0 0 0

-disability waiting period 13,618 6,771 0 0 0 0 0 0 23,731 44,120

-disability claims 0 0 0 7,575 0 0 0 0 148,021 155,596

-medical 0 923 0 55,380 0 0 2,485 0 0 58,788

Premiums 48,584 85,483 76,689 191,765 53,847 1,053 190,426 15,312 97,745 760,904

Interest 1,825 24,141 38,387 2,046 -87 35 598 210 11,803 78,958

Non-rated claims 0 0 0 0 0 0 0 0 0 0

Total 73,092 553,147 620,947 256,766 80,508 1,088 193,509 16,133 281,300 2,076,490

OUTGO

Reserves

-contractual benefi ts 0 458,329 455,789 0 0 0 0 0 0 914,118

-local dividends 11,116 19,743 0 0 0 0 0 709 0 31,568

-IBNR 0 0 0 0 0 0 0 0 0 0



-medical 0 628 0 39,557 0 0 0 0 0 40,185

Claims

-death 0 0 0 2,171 165,289 0 0 0 0 167,460

-disability 0 0 0 0 0 0 5,848 0 69,941 75,789

-medical 0 515 0 90,662 0 0 132,695 0 0 223,872

-surrender 0 41,966 148,493 0 0 0 0 0 0 190,459

-survival 0 0 0 0 0 0 0 0 0 0

Non-rated premiums 614 1,804 1,446 20,561 0 0 0 0 10,511 34,936

Indexation premium 0 0 0 4,902 0 0 0 0 0 4,902

Continuation option 1,943 0 0 0 0 0 0 0 0 1,943

Commissions 0 2,133 0 10,145 2,144 0 9,521 524 0 24,467

Local tax 1,214 50 0 7,503 824 0 0 0 0 9,591

Administration charge 4,213 9,715 8,436 14,310 4,670 316 34,492 2,297 7,763 86,212

Risk charge 3,704 1,227 1,154 10,066 2,154 76 7,185 1,148 6,073 32,787

Local dividend 9,065 987 0 0 26,748 0 0 2,505 0 39,305

Surplus/loss 26,648 11,946 5,629 27,566 -121,321 696 3,768 8,950 107,093 70,975

Total 73,092 553,147 620,947 256,766 80,508 1,088 193,509 16,133 281,300 2,076,490

Lives 118 15 12 139 214 9 482 26 128 1,143

Special notes :In Japan negative interest is debited as the death claim caused a negative cash fl ow during the year.

Clients may choose the currency required for multinational pooling accounts. The common currencyversion of the multinational account is for presentation purposes only. All monies are held in localcurrency and appropriate conversions are made at the point in time when a given account is drawn up.

A loss carry forward account (0) for a multinational company with plans in 9 countries included in the multinational profi t & loss account. Plans in Belgium and Denmark include retirement, whereas in all other countries only risk benefi ts are insured. Although death claims occurred in Japan causing a negative result for that contract, the loss carry forward account still produces a positive result of 0 70,975.

13

Loss Carry Forward Account (negative result)

A loss carry forward account (0) for a multinational company with plans in 9 countries included in the multinational profit & loss account. Plans in Belgium and Denmark include retirement, whereas in all other countries only risk benefits are insured.

Negative results in Belgium, Japan and Spain caused an overall negative result of 0 366,541. This loss will be transferred to the next year’s account.


INCOME

Reserves

-contractual benefits 0 418,533 505,871 0 0 0 0 0 0 924,404

-local dividends 9,065 17,296 0 0 26,748 0 0 611 0 53,720

-IBNR 0 0 0 0 0 0 0 0 0 0



-medical 0 923 0 55,380 0 0 2,485 0 0 58,788

Premiums 48,584 85,483 76,689 191,765 53,847 1,053 190,426 15,312 97,745 760,904

Interest 1,825 23,235 38,387 2,046 -87 35 598 -1,976 11,803 75,866

Non-rated claims 0 83,646 0 0 0 0 0 0 0 83,646

Total 73,092 635,887 620,947 256,766 80,508 1,088 193,509 13,947 281,300 2,157,044

OUTGO

Reserves


-local dividends 11,116 19,743 0 0 0 0 0 0 0 30,859

-IBNR 0 0 0 0 0 0 0 0 0 0


-disability claims 0 390,545 0 29,323 0 0 0 0 55,008 474,876

-medical 0 628 0 39,557 0 0 0 0 0 40,185

Claims

-death 0 0 0 2,171 165,289 0 0 125,000 0 292,460

-disability 0 3,234 0 0 0 0 5,848 0 69,941 79,023

-medical 0 515 0 90,662 0 0 132,695 0 0 223,872

-surrender 0 41,966 148,493 0 0 0 0 0 0 190,459

-survival 0 0 0 0 0 0 0 0 0 0




Commissions 0 2,133 0 10,145 2,144 0 9,521 524 0 24,467

Local tax 1,214 50 0 7,503 824 0 0 0 0 9,591


Risk charge 3,704 1,227 1,154 10,066 2,154 76 7,185 1,148 6,073 32,787

Local dividend 9,065 987 0 0 26,748 0 0 2,505 0 39,305

Surplus/loss 26,648 -299,093 5,629 27,566 -121,321 696 3,768 -117,527 107,093 -366,541

Total 73,092 635,887 620,947 256,766 80,508 1,088 193,509 13,947 281,300 2,157,044

Lives 118 15 12 139 214 9 482 26 128 1,143

Special notes :In Japan and Spain negative interest is debited as the death claim caused a negative cash flow during the year.

Part of the disability claim in Belgium is in excess of the Insurope global rating limit. That part of the claim is re-injected into the account under income items as a non-rated claim. For maximum transparency the full claim amount (both non-rated and rated) are shown under outgo items while the risk premium in respect of non-rated cover is shown under the line “Non-rated premiums”.

Clients may choose the currency required for multinational pooling accounts (see same footnote p.13).

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INCOME

Reserves


-local dividends 9,065 17,296 0 0 26,748 0 0 611 0 53,720

-IBNR 0 0 0 0 0 0 0 0 0 0



-medical 0 923 0 55,380 0 0 2,485 0 0 58,788

Premiums 48,584 85,483 76,689 191,765 53,847 1,053 190,426 15,312 97,745 760,904

Interest 1,825 23,235 38,387 2,046 -87 35 598 -1,976 11,803 75,866

Non-rated claims 0 83,646 0 0 0 0 0 0 0 83,646

Total 73,092 635,887 620,947 256,766 80,508 1,088 193,509 13,947 281,300 2,157,044

OUTGO

Reserves


-local dividends 11,116 19,743 0 0 0 0 0 0 0 30,859

-IBNR 0 0 0 0 0 0 0 0 0 0



-medical 0 628 0 39,557 0 0 0 0 0 40,185

Claims

-death 0 0 0 2,171 165,289 0 0 125,000 0 292,460

-disability 0 3,234 0 0 0 0 5,848 0 69,941 79,023

-medical 0 515 0 90,662 0 0 132,695 0 0 223,872

-surrender 0 41,966 148,493 0 0 0 0 0 0 190,459

-survival 0 0 0 0 0 0 0 0 0 0




Commissions 0 2,133 0 10,145 2,144 0 9,521 524 0 24,467

Local tax 1,214 50 0 7,503 824 0 0 0 0 9,591


Risk charge 3,704 1,227 1,154 10,066 2,154 76 7,185 1,148 6,073 32,787

Local dividend 9,065 987 0 0 26,748 0 0 2,505 0 39,305

Surplus/loss 26,648 -299,093 5,629 27,566 -121,321 696 3,768 -117,527 107,093 -366,541

Total 73,092 635,887 620,947 256,766 80,508 1,088 193,509 13,947 281,300 2,157,044

Lives 118 15 12 139 214 9 482 26 128 1,143

Special notes :In Japan and Spain negative interest is debited as the death claim caused a negative cash flow during the year.



Stop Loss Account (positive result)

A stop loss account (0) for a multinational company with plans in 9 countries included in the multinational profit& loss account. Plans in Belgium and Denmark include retirement, whereas in all other countries only risk benefits are insured.

Although death claims occurred in Japan causing a negative result for that contract, the stop loss account still produces a positive result of 0 32,974.

This amount is available to the multinational company as a multinational dividend.


INCOME

Reserves


-local dividends 9,065 17,296 0 0 26,748 0 0 611 0 53,720

-IBNR 0 0 0 0 0 0 0 0 0 0



-medical 0 923 0 55,380 0 0 2,485 0 0 58,788

Premiums 48,584 85,483 76,689 191,765 53,847 1,053 190,426 15,312 97,745 760,904

Interest 1,825 24,141 38,387 2,046 -87 35 598 210 11,803 78,958

Non-rated claims 0 0 0 0 0 0 0 0 0 0

Total 73,092 553,147 620,947 256,766 80,508 1,088 193,509 16,133 281,300 2,076,490

OUTGO

Reserves


-local dividends 11,116 19,743 0 0 0 0 0 709 0 31,568

-IBNR 0 0 0 0 0 0 0 0 0 0



-medical 0 628 0 39,557 0 0 0 0 0 40,185

Claims

-death 0 0 0 2,171 165,289 0 0 0 0 167,460

-disability 0 0 0 0 0 0 5,848 0 69,941 75,789

-medical 0 515 0 90,662 0 0 132,695 0 0 223,872

-surrender 0 41,966 148,493 0 0 0 0 0 0 190,459

-survival 0 0 0 0 0 0 0 0 0 0




Commissions 0 2,133 0 10,145 2,144 0 9,521 524 0 24,467

Local tax 1,214 50 0 7,503 824 0 0 0 0 9,591


Stop Loss premium 10,001 2,817 2,728 19,589 5,816 205 10,135 3,101 16,396 70,788

Local dividend 9,065 987 0 0 26,748 0 0 2,505 0 39,305

Surplus/loss 20,351 10,356 4,055 18,043 -124,983 567 818 6,997 96,770 32,974

Total 73,092 553,147 620,947 256,766 80,508 1,088 193,509 16,133 281,300 2,076,490

Lives 118 15 12 139 214 9 482 26 128 1,143

Special notes : In Japan negative interest is debited as the death claim caused a negative cash flow during the year.


15

Stop Loss Account (negative result)

A stop loss account (0) for a multinational company with plans in 9 countries included in the multinational profit& loss account. Plans in Belgium and Denmark include retirement, whereas in all other countries only risk benefits are insured. Negative results in Belgium, Japan and Spain caused an overall negative result of 0 404,542.

This loss is cancelled by the Insurope network.


INCOME

Reserves


-local dividends 9,065 17,296 0 0 26,748 0 0 611 0 53,720

-IBNR 0 0 0 0 0 0 0 0 0 0



-medical 0 923 0 55,380 0 0 2,485 0 0 58,788

Premiums 48,584 85,483 76,689 191,765 53,847 1,053 190,426 15,312 97,745 760,904

Interest 1,825 23,235 38,387 2,046 -87 35 598 -1,976 11,803 75,866

Non-rated claims 0 83,646 0 0 0 0 0 0 0 83,646

Total 73,092 635,887 620,947 256,766 80,508 1,088 193,509 13,947 281,300 2,157,044

OUTGO

Reserves


-local dividends 11,116 19,743 0 0 0 0 0 0 0 30,859

-IBNR 0 0 0 0 0 0 0 0 0 0



-medical 0 628 0 39,557 0 0 0 0 0 40,185

Claims

-death 0 0 0 2,171 165,289 0 0 125,000 0 292,460

-disability 0 3,234 0 0 0 0 5,848 0 69,941 79,032

-medical 0 515 0 90,662 0 0 132,695 0 0 223,872

-surrender 0 41,966 148,493 0 0 0 0 0 0 190,459

-survival 0 0 0 0 0 0 0 0 0 0




Commissions 0 2,133 0 10,145 2,144 0 9,521 524 0 24,467

Local tax 1,214 50 0 7,503 824 0 0 0 0 9,591



Local dividend 9,065 987 0 0 26,748 0 0 2,505 0 39,305

Surplus/loss 20,351 -300,683 4,055 18,043 -124,983 567 818 -119,480 96,770 -404,542

Total 73,092 635,887 620,947 256,766 80,508 1,088 193,509 13,947 281,300 2,157,044

Lives 118 15 12 139 214 9 482 26 128 1,143

Special notes : In Japan and Spain negative interest is debited as the death claim caused a negative cash flow during the year.



16


INCOME

Reserves


-local dividends 9,065 17,296 0 0 26,748 0 0 611 0 53,720

-IBNR 0 0 0 0 0 0 0 0 0 0



-medical 0 923 0 55,380 0 0 2,485 0 0 58,788

Premiums 48,584 85,483 76,689 191,765 53,847 1,053 190,426 15,312 97,745 760,904

Interest 1,825 23,235 38,387 2,046 -87 35 598 -1,976 11,803 75,866

Non-rated claims 0 83,646 0 0 0 0 0 0 0 83,646

Total 73,092 635,887 620,947 256,766 80,508 1,088 193,509 13,947 281,300 2,157,044

OUTGO

Reserves


-local dividends 11,116 19,743 0 0 0 0 0 0 0 30,859

-IBNR 0 0 0 0 0 0 0 0 0 0



-medical 0 628 0 39,557 0 0 0 0 0 40,185

Claims

-death 0 0 0 2,171 165,289 0 0 125,000 0 292,460

-disability 0 3,234 0 0 0 0 5,848 0 69,941 79,032

-medical 0 515 0 90,662 0 0 132,695 0 0 223,872

-surrender 0 41,966 148,493 0 0 0 0 0 0 190,459

-survival 0 0 0 0 0 0 0 0 0 0




Commissions 0 2,133 0 10,145 2,144 0 9,521 524 0 24,467

Local tax 1,214 50 0 7,503 824 0 0 0 0 9,591



Local dividend 9,065 987 0 0 26,748 0 0 2,505 0 39,305

Surplus/loss 20,351 -300,683 4,055 18,043 -124,983 567 818 -119,480 96,770 -404,542

Total 73,092 635,887 620,947 256,766 80,508 1,088 193,509 13,947 281,300 2,157,044

Lives 118 15 12 139 214 9 482 26 128 1,143

Special notes : In Japan and Spain negative interest is debited as the death claim caused a negative cash flow during the year.



Multipool Account

A Multipool account (0) for a multinational company with plans in 4 countries included in the multinational profit & loss account. Although death claims occurred in Japan causing an overall negative result in this particular company’s Multipool account, a multinational dividend is still payable in respect of the positive results for the contracts in Australia, Norway and Singapore. This example assumes the overall multi-employer Multipool account result is positive for the year in question.

The multinational dividend for this particular multinational company amounts to 0 10,682, being the sum of0 8,973, 0 237 and 0 1,472.

Country Australia Japan Norway Singapore TOTAL

INCOME

Reserves

-contractual benefits 0 0 0 0 0

-local dividends 9,065 26,748 0 0 35, 813

-IBNR 0 0 0 0 0

-disability waiting period 13,618 0 0 0 13,618

-disability claims 0 0 0 0 0

-medical 0 0 0 2,485 2,485

Premiums 48,584 53,847 1,053 190,426 293,910

Interest 0 0 0 0 0

Non-rated claims 0 0 0 0 0

Total 71,267 80,595 1,053 192,911 345,826

OUTGO

Reserves

-contractual benefits 0 0 0 0 0

-local dividends 11,116 0 0 0 11,116

-IBNR 0 0 0 0 0

-disability waiting period 14,575 0 0 0 14,575

-disability claims 0 0 0 0 0

-medical 0 0 0 0 0

Claims

-death 0 165,289 0 0 165,289

-disability 0 0 0 5,848 5,848

-medical 0 0 0 132,695 132,695

-surrender 0 0 0 0 0

-survival 0 0 0 0 0

Non-rated premiums 614 0 0 0 614

Indexation premium 0 0 0 0 0

Continuation option 1,943 0 0 0 1,943

Commissions 0 2,144 0 9,521 11,665

Local tax 1,214 824 0 0 2,038

Administration charge 4,213 4,670 316 34,492 43,691

Risk charge 2,889 1,680 59 6,150 10,778

Local dividend 9,065 26,748 0 0 35,813

Surplus before offset of Multipool losses

25,638 -120,760 678 4,205 -90,239

Total 71,267 80,595 1,053 192,911 345,826

Multinational dividend 8,973 0 237 1,472 10,682

Lives 118 214 9 482 823


17

Worldwide Presence

Insurope network partners

18

Any name changes or network partner additions are recorded as they occur and may be found in the

Download Zone at www.insurope.com.

For the purposes of Insurope related business, Insurope network partners only underwrite coverages in

the country for which they represent Insurope as a network partner.

Country Network partner

Anguilla Sagicor Anguilla

Antigua Sagicor Antigua

Argentina HSBC-NYL

Aruba Sagicor Aruba

Australia AXA

Austria UNIQA

Bahamas Sagicor Bahamas

Barbados Sagicor Barbados

Belgium AG Insurance

Belize Sagicor Belize

Bosnia/Herzegovina UNIQA

Brazil HSBC Seguros

Bulgaria UNIQA

Canada Standard Life Canada

Cayman Islands Sagicor Cayman

China Ping An

Croatia UNIQA

Curacao Sagicor Curacao

Cyprus Universal Life

Czech Republic UNIQA Pojistovna

Denmark Danica Pension

Dominica Sagicor Dominica

Estonia ERGO Elukindlustuse

Finland Mandatum Life

France GAN

Germany Alte Leipziger

Greece International Life

Grenada/Carricou Sagicor Grenada

Guernsey Nordben Life and Pension Insurance

Hong Kong Manulife

Hungary Groupama

India HDFC Standard Life

Indonesia Jiwasraya

Ireland Aviva

Italy Fondiaria / SAI

Jamaica Sagicor Life of Jamaica

Japan Asahi Mutual

Japan AXA

Latvia ERGO Latvia

Liechtenstein Baloise Liechtenstein

Lithuania ERGO Lietuva

Luxembourg Fortis Insurance Luxembourg

Malaysia HSBC Amanah Takaful

Country Network partner

Mexico Grupo Nacional Provincial

Monaco Gan Monaco

Montenegro UNIQA

Montserrat Sagicor Montserrat

Morocco RMA Watanya

Netherlands Delta Lloyd

New Zealand AXA

Norway Storebrand

Panama Sagicor Panama

Peru Pacifi co Vida

Philippines Asian Life

Poland Aviva Commercial Union

Portugal Companhia de Seguros Tranquilidade

Portugal T-Vida, Companhia de Seguros

Puerto Rico Prudential Puerto Rico

Romania Aviva Asigurari de Viata

Russia ERGO Life

Serbia UNIQA

Singapore HSBC Insurance

Slovakia UNIQA

South Africa Sanlam

South Korea Kyobo Life

Spain España

St Lucia Sagicor St Lucia

St. Kitts Sagicor St Kitts

St. Martin Sagicor St Martin

St. Vincent Sagicor St Vincent

Sweden SPP

Switzerland Baloise

Taiwan China Life

Thailand SCB Life

Trinidad & Tobago Sagicor Trinidad and Tobago

Turkey Groupama Emeklilik

Turkey Groupama Sigorta

Ukraine UNIQA

United Kingdom Canada Life

United Kingdom BUPA

USA Prudential

Vietnam Baoviet

Virgin Islands (British) Sagicor Virgin Islands (British)

1-7/2011

Worldwide Presence

19

Insurope network central offi ces

Any changes to Insurope network central offi ces coordinates are recorded as

they occur and may be found in the Download Zone at www.insurope.com

INSUROPE SECRETARIATINSUROPE EASTERN EUROPEINSUROPE MID EUROPEINSUROPE SOUTHERN EUROPE

Avenue des Arts 91210 Brussels, BELGIUMT +32-2 286 50 60v+32-2 286 50 70B [email protected]

INSUROPE GERMANY

Martin-Buber Weg 11,71686 Remseck, GERMANYT +49-7146 407 160v+49-7146 407 161

INSUROPE NORDIC REGION

c/o Mandatum LifeBulevardi 56FIN-00120 Helsinki, FINLANDT +358 9 644 080v+358 10 716 7503

INSUROPE UK & IRELAND

Knowledge Centre,Wyboston LakesGreat North Road,Wyboston, Beds MK44 3BYUNITED KINGDOMT +44 1480 479 322v+44 1480 210 362

INSUROPE AMERICAS

420 Lexington Avenue,Suite 2114-15,New York, NY 10170, USAT +1-212 682 0194

INSUROPE East Coast USA

7 Alfred DrivePo Box 861Tolland, CT 06084, USAT +1-860 872 7170

INSUROPE Midwest USA

5047 North Kostner Avenue Chicago, IL 60630, USAT +1-646 732 1995

INSUROPE South USA

1650 Galiano Street,Suite 17, Coral Gables, Florida, 33134, USA T +1-305 374 1122

INSUROPE West Coast USA

PO Box 16994Irvine, CA 92623-6994, USAT +1-714 760 4291v+1-212 682 6051

INSUROPE CANADA

5047 North Kostner Avenue Chicago, IL 60630, USAT +1-646 732 1995

INSUROPE LATIN AMERICA

1650 Galiano Street,Suite 17, Coral Gables, Florida, 33134, USA T +1-305 374 1122

INSUROPE ASIA PACIFIC

10 Eunos Road 8,#11-01 Singapore Post Centre,Singapore408600SINGAPORET +65 631 93570

INSUROPE CHINA

10 Eunos Road 8,#11-01 Singapore Post Centre,Singapore408600SINGAPORET +65 631 93570

1-7/2011


INSUROPE SECRETARIATAvenue des Arts, 9 • 1210 Brussels • Belgium

Tel: +32 2 286 50 60 • Fax: +32 2 286 50 70

www.insurope.com

insurope multinational pooling - complete guide

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