Property income attributed to insurance policy holders (D.44)

4.68 . Definition:

Property income attributed to insurance policy holders corresponds to total primary incomes received from the investment of insurance technical reserves. Insurance technical reserves are invested by insurance enterprises and pension funds in financial assets or land (from which net property income, i.e. after deducting any interest paid, is received) or in buildings (which generate net operating surpluses). Any net income received that results from the investment of insurance enterprises’ own funds is to be excluded in proportion to the ratio between own funds and a sum of own funds and insurance technical reserves.

4.69 . Since technical reserves are assets of insurance policy holders, the receipts from investing them are shown in the accounts as being paid by insurance enterprises and pension funds to the policy holders in the form of property income attributed to insurance policy holders.

As this income is retained by insurance enterprises and pension funds in practice, it is therefore treated as being paid back to the insurance enterprises and pension funds in the form of premium and contribution supplements that are additional to actual premiums and contributions payable.

These premium and contribution supplements on non-life insurance policies and on life insurance policies taken out under social insurance schemes are recorded together with the actual premiums and contributions in the secondary distribution of income accounts of the units concerned.

The premium supplements on individual life insurance not taken out under social insurance schemes, like the actual premiums, are not current transfers and are therefore not recorded in the secondary distribution of income accounts. They are directly included as one of the elements contributing to the change in the ‘net equity of households in life insurance reserves and in pension funds reserves’ recorded in the financial accounts of the units concerned.

4.70 . Time of recording: Property income attributed to insurance policy holders is recorded when it accrues.

4.71 . In the system of accounts, the property income attributed to insurance policy holders appears:

a) among resources in the allocation of primary income account of policy holders;

b) among uses in the allocation of primary income account of the insurers;

c) among resources and among uses in the external account of primary incomes and current transfers.