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Covering resetting is a term from accounting. It designates the value of the obligations from life insurance contracts and similar insurance contracts, set in the balance of an insurance company. The covering resetting is belonged the most important debit item on the passive side of the life and health insurers and to the insurance-technical resetting. The covering resetting is apart from the according to commercial law function also for the determination of necessary own resources of the insurer, for the height as security to investments holding and often contractually also for the calculation of the surplus portions of importance.
The term "covering resetting "is used both for the total post in the balance and for the part which is allotted to an individual contract. In in particular older literature one finds also the terms "to reserve ", "premium reserve "or "balance reserve ". However the covering resetting is a resetting and no reserve in the sense of accounting. Particularly for the value which is allotted to the individual contract imprecisely also the term covering capital is used, which actually designates each statistical determination of a contract value according to the traditional covering capital formula (deterministic method).
The covering resetting describes the value of the debt of the insurer which can be set according to commercial law due to the obligations from an insurance contract, as far as they do not refer to already due or due to from accidents existing requirements already occurred. Since these obligations are uncertain, it concerns a resetting. The debt does not consist its return, which or the contribution of other achievements fulfilled carrying of insurance protection in the fulfilment arrears of the insurer of the contract, for which the insurant already paid in fulfilment of its contractual obligations contributions, the insurer however yet. Such an fulfilment arrears are for representation actual conditions appropriate fortune to consider financial and earnings even if the obligation becomes due possibly only in decades. The insurants acquired requirements, which the insurer has to prove in response with their payment of dues, which the insurer proved as yield. During the evaluation of the future obligations of the insurer reducing those contributions of the insurant are considered, which this must make in the future still for the maintenance of the requirement.
Apart from the general regulations of the commercial law in "§ 246 HGB, in particular the completeness requirement, and "§ 252 HGB, in particular the individual value principle, the caution principle, the imparity principle, the implementing principle and the steadiness requirement and for insurance-technical resetting generally valid the regulations "§ 341 e HGB the regulations are to beginning and evaluation of the covering resetting in "§ 341f of the commercial code (HGB) and further defaults in "§"§ the 25 and 32 RechVersV. After "§ 341 e HGB also the regulations of the right of supervision of insurance are to be considered over the caution which can be used at least with the choice of the bases of calculation of the covering resetting. The supervision-legal standard is in "§ 65 of the law of supervision of insurance (VAG), and/or in "§ 116 VAG for the pension funds, and in the statutory orders issued in addition, to the covering resetting regulation (DeckRV) for the life insurance, the calculation regulation (KalV) for the health insurance and the pension fund covering resetting regulation (PFDeckRV) for pension funds.
In the life insurance the registrar regulation (AktuarV) places further defaults for the responsible person registrar confirming the covering resetting. In the previous stock level the evaluation depends on the authorized business plan. Changes of the calculation method or the used acceptance require thereby the permission of the supervision of insurance.
The German regulations are based on European right (guideline 2002/83/EG). The appropriate regulations of other European states, like Austria or Switzerland, are therefore not substantially different. In Switzerland the determination of the covering resetting the articles 58-65 of the supervision regulation (AVO) is regulated. For Austria the determination of the covering resetting is through "§"§ 81 i and k of the VAG Austria regulated.
As far as insurance companies provide a company conclusion or a single conclusion after IFRS, the regulations of the IFRS of 4 "insurance contracts are to be used ". From this a continuation of the regulations of the German commercial law or the US-GAAP results for most insurers. The IASB prepares at present a revised version of the IFRS 4, which will possibly plan an evaluation of the covering resetting to fair the VALUE.
The value of the future obligation is to be determined because of the eventuality of the insurance benefits in addition, because of the uncertainty of the future development not clearly, but must become estimated. This applies also, if this value is to be based as with fair the VALUE on market prices, since such market prices are not observable.
The proceeding with the estimation of the covering resetting is described by "technical design fundamentals ". These consist of "the calculation method "and "the acceptance "needed for it or "parameters ".
According to the European Union regulations the covering resetting is to be computed according to the prospektiven method. It is determined thereby according to statistical principles as difference between the statistical value of the obligation of the insurer and the statistical determined bar value of the contributions which can be made from the insurant to (prospektive method). "Prospektiv "means here that excluding future payment stream find consideration. From the word choice "obligation "and "contributions "results that all future payment stream, thus the entire contractual contributions and the entire for the completion of the contract necessary expenditures, including all expenditures for the insurance enterprise, are to be considered (gross contribution procedures). From this gross contribution procedure may be only deviated, if this is according to commercial law necessary or essentially the same value results.
If the application of the prospektiven method is not possible (e.g. with fund-bound life insurances or contracts with those the height of the achievement promise for other reasons is not absolutely fixed), the covering resetting exists in - so far interest charges agreed upon actual aufgezinsten taken contributions less the contractual withdrawals for risk and operating expenditures (retrospective method). While the prospektiv determined covering resetting aims at to hold the moneys ready for the Sicherstellung of assured future achievements of the insurance company less which, the retrospective method the residual value so far by the customer furnished of the amounts determines future contributions, due to those itself the future performance demand in accordance with contract certainly.
If the same technical design fundamentals become with the computation of the covering resetting, therefore method resembles and identical acceptance, how already originally uses with the computation of the contributions, then both methods result in the same value.
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