An investment restriction is a restriction with the plant of capital.

Introduction

The investment politics of an insurance company cannot take place completely freely. It is subject to different factors of influence. The following illustration shows the restrictions, which affect the investment politics and thus the height of the net yield strongly.

Supervision-legal basic conditions

In most countries insurance companies are bound with the choice of their investments to legal plant regulations. In Germany these regulations are particularly in the VAG as well as contained of the Federal Institution for supervision of financial service (BAFin) in the arrangements and administrative principles, which specify the framework of the individual investment politics of the insurance companies mainly regarding the kinds of investment.

The purpose of these plant regulations is to be guaranteed it that the insurance company can follow its received obligations at any time.

Fortune blocks

Connecting factor for plant regulations, both for general principles and for special requirements, is organization investments in three fortune blocks, whose demarcation results from the one which can be assigned the passive posts in each case, from which the investments are financed.

The respective extent cannot be inferred from the assets side of the balance, since this is arranged according to the fortune blocks according to the kinds of investment and not. The height is communicated the BaFin in the framework to internal accounting quartalsweise.

Liabilities fund (since 12/2003 "“safeguard ability"”)

The height of the liabilities fund depends on the covering resetting. The covering resetting is formed from the interest-bearing accumulation of the annually taken in contributions and interest after covering of the administratives expense and insurance benefits. She is determined after statistical principles for each insurance. The calculation-moderate interest charges of the covering resetting are fixed in the technical business plan of an insurance.

The covering resetting serves the insurance company thus to adjust the period between the payment of dues and the maturity of the achievement shown in the balance. This period amounts to with life insurance enterprises on the average 27 years, which clarifies the large range of the covering resetting with the life insurance enterprises.

Due to the Sicherstellung of the requirements of the insured ones in case of a bankruptcy, the liabilities fund is a special estate separated internally from the remaining fortune of the insurance company, which is extracted from the access of other creditors. The liabilities fund of belonging fortune articles in a liabilities fund listing are led and by a trustee supervised.

Remaining bound fortune (since 12/2003 "“other bound fortune"”)

Net assets outside of the liabilities fund at height of the other insurance-technical obligations belong to the remaining bound fortune. Other insurance-technical obligations are insurance-technical resetting and the commitments and calculation deferred items developed from insurance conditions.

Bound fortune

Together the liabilities fund and the remaining bound fortune result in the bound fortune.

From the regulations of the VAG the being of the liabilities fund as well as those of the remaining bound fortune result.

A any deficit in the rest of bound fortunes can be charged on a cover of the covering resetting. A reverse accounting is not possible regarding the privileged position of the Dekkungsstocks.

Free (remaining) fortune

The remaining fortune are thus the equivalents of liabilities, which insurance-technical nature are not. To it mainly own resources and all not-insurance-technical liabilities belong.

General plant principles

The covering capital is to be in such a way put on, "„that as large security and a profitability as possible with each-early liquidity of the insurance company under keeping of appropriate mixture and dispersion is reached "“.

This general plant principle refers only to the investments, which serve for the covering of the bound fortune. For the plant of the free fortune there are no restrictions.

Principle of security

Regarding the fulfillableness of the insurance contracts is the requirement of large a security as possible, which is mentioned by the legislator consciously in the first place, of granting absolutely priority.

Present and recognizable future risks are to be excluded with the investment. This as risk-free an administration of an estate as possible requires a permanent monitoring and excludes speculative plants.

Principle of profitability

With consideration of the basic conditions investments must obtain a lasting yield. A minimum net yield is not prescribed. Not acceptable are however interest charges, which lie below the calculation-moderate interest charges of the covering resetting. This would lead to a deficit.

Principle of the liquidity

An insurance company must be able to fulfill its due liabilities at any time. In the context of a comprehensive financial and the investments must be so structured therefore that at each time a business-necessary amount at liquid or problem-free liquidatable plants is available.

Principle of the mixture and dispersion

Here it concerns a general principle, which does not aim directly at the security of individual investments, but to it to contribute itself is to avoid a one-sided investment policy and to manufacture a compensation of risks between the plants altogether. The compensation of risks takes place thereby via distribution of the plants on different plant forms (mixture) and on different debtors (dispersion), so that a one-sided investment policy is avoided.

Interdependences between the plant principles

The principles security, liquidity and profitability are not without compromises compatible with one another. "„The uneasy triangle "“of the investment illustrates the stress ratio.

It cannot be carried out of the investment principles fully, without it comes to conflicts with the others.

• On the one hand a tendentious lower net yield must be taken in purchase for the achievement of high a degree at security as possible.
• On the other hand a conflict between liquidity and profitability develops, since liquidere plants are connected with net yield eight-hurrying often.

The principle of the mixture and dispersion considers the investment principles in conflict and leads thereby to a compromise.

Special investment regulations

Beyond the general plant principles of the VAG special plant regulations are intended for the liabilities fund existence and for the remaining bound fortune. The special plant regulations make the following demands against the bound fortune:

• Restriction in the permissible kinds of plant: The VAG lists the kinds of plant permissible without special permission of the supervisory authority.
• Attention of the special mixture ratios and dispersion regulations: Apart from the above general principle of the mixture and dispersion special ratios for the distribution of the fortune are specified in the permissible kinds of plant and different debtors in the VAG.
• Attention of the currency-congruent coverage: According to the principle of the currency congruence are to be taken place investments mostly in the currency, in which the obligations were entered. The additional safety thought of the legislator consists of endangering the fulfillableness of the obligations with not congruent coverage from a development moving in opposite directions from plant and obligation currency to.
• Attention of the Belegenheitsprinzips: Just as a congruent Dekkung of the currency, in which the obligations are expressed, and which currency of the coverage values, requires the principle of the voucherness a correspondence of the voucherness of the coverage values. The close linkage between the voucherness of the obligations and the voucherness of the appropriate plants is not demanded, a voucherness in the EG/EWR area is sufficient.

According to commercial law evaluation regulations

In the balance of the insurance companies after plant and circulating capital one does not differentiate. The evaluation of the fortune articles of the insurance companies is regulated in "§"§ the 341 b, C, D HGB. These special regulations become on the general regulations for the plant and circulating capital "§"§ 252 of the FF. HGB led back.

To the fixed assets belong among other things properties, buildings, name debenture bonds and mortgage loans. The beginning of these fortune articles takes place to continued initial costs. For name debenture bonds and mortgage loans also the nominal value may be selected in accordance with "§ 341c Abs.1 HGB.

The circulating capital, to which shares, Investmentanteile as well as other securities at fixed interest and at fixed interest do not belong, is evaluated with the minimum value principle.

In the context of the plant control can be decided with the choice of the evaluation methods freely. The methods permissible for accounting purposes must be along-considered however. An understocking relating to the balance of the commitments is avoided thereby.

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