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In line with the requirement to reinstate original values, assets which had been written down to a lower market value in earlier years were written up to their cost of acquisition or a lower current market value. This appreciation was treated as income with an impact on results.

C.IV. Deposits withheld on assumed reinsurance business

Deposits retained and amounts receivable on assumed reinsurance business are posted at face value; appropriate write-offs were made to account for uncollectible amounts.

E. Other assets

Property, plant and equipment classed as major value assets are carried at their cost of acquisition less the maximum depreciation allowed for tax purposes. Minor value assets were fully written off in the year of acquisition.

Stocks are stated as at 31 December 2000 in accordance with Section 240 Para. 3 of the German Commercial Code (HGB).

Miscellaneous assets

All remaining assets are shown at face value.

Equity and Liabilities

C. Underwriting funds and provisions

Underwriting funds and provisions are of a magnitude judged adequate to ensure that all commitments can be met.

Provisions for business assumed were calculated as follows:

I. Unearned premiums

Unearned premiums for business assumed were calculated on the basis of data supplied by ceding companies. Where such data were not made available, unearned premiums were assessed by the fraction method or as a fixed percentage of the premiums for which the formation of pro- visions is obligatory. The Federal Finance Minister’s decree of 30 April 1974 was observed.

II. Premium funds

Premium funds were generally calculated on the basis of the data sup- plied by ceding companies. Where non-zillmerized reserves were stated

Notes to the Financial Statements 73

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