CUSTOMER ORIENTATION
When you act with PASSION, you run the risk.
AUDITED FINANCIAL STATEMENTS
8
INDEPENDENT AUDITORS’ REPORT
To the Shareholders and Board Members of Compañía de Seguros CorpVida S.A.: We have audited the enclosed financial statements of Compañía de Seguros CorpVida S.A. hereinafter “the Company”), including the statement of financial position as of December 31, 2012, the related statements of comprehensive income, changes in equity, and cash flows for the year then ended, and the corresponding notes to the financial statements. Note 6.III has not been audited by us; therefore, this report is not extensive to it.
60
Management’s Responsibility for the Financial Statements The Company’s Management is responsible for the reasonable preparation and presentation of these financial statements in accordance with the accounting standards established by the Superintendency of Securities and Insurance. This responsibility includes the design, implementation, and maintenance of internal control over the reasonable preparation and presentation of the financial statements so that they are free of material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards in Chile. Those standards require that we plan and
AUDITED FINANCIAL STATEMENTS
perform our auditing work to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves the application of procedures to obtain evidence supporting the amounts and disclosures in the financial statements. The selected procedures depend on the auditor’s judgment, including an evaluation of the risks of material misstatement, whether due to fraud or error. In performing these risk evaluations, the auditor considers relevant internal control for the reasonable preparation and presentation of the Company’s financial statements in order to design auditing procedures that are consistent with the circumstances but with no intention of expressing an opinion concerning the effectiveness of the Company’s internal control. Consequently, we express no such opinion. An audit also includes assessing the accounting principles used and significant estimates made by the Company’s Management as well as an evaluation of the overall financial statement presentation. In our opinion, the auditing evidence we have obtained is adequate and appropriate to provide a fair basis for our opinion. Opinion In our opinion, the aforementioned financial statements fairly present, in all material respects, the financial position of Compañía de Seguros CorpVida S.A. as of December 31, 2012 and the
results of its operations and cash flows for the year then ended, in conformity with generally accepted accounting principles in Chile and the regulations of the Superintendency of Securities and Insurance. Other Issues: Additional Information Our audit was carried out with the purpose of obtaining an opinion concerning the overall financial statements. Notes to the financial statements 25.3.2 “Hedging Indices”, 25.3.3 ”Equivalent Cost Rate”, 25.4 “Disability and Survival Insurance (SIS) Reserve”, and 44 “Foreign Currency” and technical charts 6.01 “Contribution Margin Chart”, 6.02 “Premium Reserve Opening Chart”, 6.03 “Claim Cost Chart”, 6.04 “Income Cost Chart”, 6.05 “Reserve Chart”, 6.06 “Pension Fund Insurance Chart”, 6.07 “Premium Chart”, and 6.08 “Data Chart” are presented with the purpose of enabling a more comprehensive analysis than that deriving from the information normally provided in financial statements. This additional information is Management’s responsibility; it was derived from, and is directly related to, accounting records and other underlying records used in the preparation of the financial statements. The aforementioned additional information has been subject to the auditing procedures applied to financial statement auditing and other selective additional procedures, including a direct comparison and reconciliation of this additional information with the accounting records and other underlying records used in the preparation of financial statements or with the financial statements themselves, and other additional procedures in accordance with generally accepted auditing standards in Chile. In our opinion, the aforementioned additional information is reasonably presented in all material respects in relation to the overall financial statements.
61
AUDITED FINANCIAL STATEMENTS
Other Matters: New Accounting Standards As of January 1, 2012, CompaĂąĂa de Seguros CorpVida S.A. has adopted the new accounting standards established by the Superintendency of Securities and Insurance, corresponding to new standards for the recognition and measurement of assets and liabilities, as well as new presentation and disclosing requirements for financial information. As a result of the firsttime application of these standards, changes to equity were introduced as of January 1, 2012, for M$ (738,638). Additionally, the enclosed financial statements as of December 31, 2012 do not include comparative information in accordance with Official Circular No. 2,022 issued by the Superintendency of Securities and Insurance.
62
February 28, 2013 Santiago, Chile
Juan Carlos Jara M.
AUDITED FINANCIAL STATEMENTS
63
AUDITED FINANCIAL STATEMENTS
STATEMENT OF FINANCIAL POSITION
64
5.10.00.00
TOTAL ASSETS
2.042.671.519
5.11.00.00
TOTAL FINANCIAL INVESTMENTS
1.671.828.173
5.11.10.00
Cash and Cash Equivalents
5.11.20.00
Financial Assets at Fair Value
5.11.30.00
Financial Assets at Amortized Cost
5.11.40.00
Loans
7.331.294
5.11.41.00
Policyholder Advance
1.081.493
5.11.42.00
Loans Granted
6.249.801
5.11.50.00
Single Investment Account (SIA) Insurance Investments
5.11.60.00
Interests in Group Entities
0
5.11.61.00
Interests in Subsidiary Companies (Affiliates)
0
5.11.62.00
Interests in Associated Companies
0
5.12.00.00
TOTAL REAL ESTATE INVESTMENTS
273.916.624
5.12.10.00
Investment Properties
157.434.265
5.12.20.00
Leasing Accounts Receivable
5.12.30.00
Properties, Plant, and Equipment for Own Use
5.12.31.00
Properties for Own Use
5.12.32.00
Plant and Equipment for Own Use
5.13.00.00
NON-CURRENT ASSETS HELD FOR SALE
AUDITED FINANCIAL STATEMENTS
6.943.880 119.322.227 1.450.709.225
87.521.547
115.177.707 1.304.652 47.117 1.257.535 0
5.14.00.00
TOTAL INSURANCE ACCOUNTS
44.173.056
5.14.10.00
Insurance Accounts Receivable
2.742.286
5.14.11.00
Insured Party Accounts Receivable
2.502.011
5.14.12.00
Debtors from Reinsurance Transactions
5.14.12.10
Claims Receivable from Reinsurers
5.14.12.20
Premiums Receivable from Accepted Reinsurances
5.14.12.30
Assets from Non-Proportional Reinsurances
5.14.12.40
Other Debtors from Reinsurance Transactions
5.14.13.00
Debtors from Coinsurance Transactions
0
5.14.13.10
Premiums Receivable from Coinsurance Transactions
0
5.14.13.20
Claims Receivable from Coinsurance Transactions
0
5.14.20.00
Reinsurance Interest in Technical Reserves
5.14.21.00
Reinsurance Interest in Reserve for Ongoing Risks
5.14.22.00
Reinsurance Interest in Pension Fund Reserves
41.257.606
5.14.22.10
Reinsurance Interest in Reserve for Life Annuities
41.257.606
5.14.22.20
Reinsurance Interest in Disability and Survival Insurance Reserve
0
5.14.23.00
Reinsurance Interest in Reserve for Unexpired Claims
0
5.14.24.00
Reinsurance Interest in Reserve for Private Annuities
5.14.25.00
Reinsurance Interest in Reserve for Claims
5.14.26.00
Reinsurance Interest in Other Technical Reserves
5.15.00.00
OTHER ASSETS
5.15.10.00
Intangible Assets
5.15.11.00
Goodwill
5.15.12.00
Intangible Assets Other than Goodwill
240.275 46.045 0 193.196 1.034
41.430.770 0
143.014 30.150 0 52.753.666 1.660.727 0 1.660.727
AUDITED FINANCIAL STATEMENTS
65
STATEMENT OF FINANCIAL POSITION
66
5.15.20.00
Taxes Receivable
5.15.21.00
Accounts Receivable for Current Taxes
5.15.22.00
Assets from Deferred Taxes
5.15.30.00
Other Assets
5.15.31.00
Personnel Debts
494.081
5.15.32.00
Accounts Receivable from Brokers
235.115
5.15.33.00
Related Debtors
5.15.34.00
Prepaid Expenses
5.15.35.00
Other Assets
5.20.00.00
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (B + C)
2.042.671.519
5.21.00.00
TOTAL LIABILITIES
1.892.411.685
5.21.10.00
FINANCIAL LIABILITIES
5.21.20.00
NON-CURRENT LIABILITIES HELD FOR SALE
5.21.30.00
TOTAL INSURANCE ACCOUNTS
1.843.001.215
5.21.31.00
Technical Reserves
1.842.637.791
5.21.31.10
Reserve for Ongoing Risks
5.21.31.20
Pension Fund Insurance Reserves
1.717.478.111
5.21.31.21
Reserve for Life Annuities
1.717.478.111
5.21.31.22
Disability and Survival Insurance Reserve
5.21.31.30
Reserve for Unexpired Claims
AUDITED FINANCIAL STATEMENTS
5.889.815 711.355 5.178.460 45.203.124
6.152.911 24.049 38.296.968
35.934.587 0
2.697.029
0 15.873.108
5.21.31.40
Fund Value Reserve
86.516.922
5.21.31.50
Reserve for Private Annuities
17.137.636
5.21.31.60
Reserve for Claims
2.929.842
5.21.31.70
Reserve against Earthquakes
5.21.31.80
Reserve for Premium Inadequacy
5.21.31.90
Other Technical Reserves
5.21.32.00
Debts from Insurance Transactions
5.21.32.10
Debts with Insured Parties
5.21.32.20
Debts from Reinsurance Transactions
363.424
5.21.32.30
Debts from Coinsurance Transactions
0
5.21.32.31
Premiums Payable for Coinsurance Transactions
0
5.21.32.32
Claims Payable for Coinsurance Transactions
0
5.21.32.40
Anticipated Revenue from Insurance Transactions
0
5.21.40.00
OTHER LIABILITIES
5.21.41.00
Provisions
5.21.42.00
Other Liabilities
5.21.42.10
Taxes Payable
447.869
5.21.42.11
Account Payable for Current Taxes
447.869
5.21.42.12
Liabilities from Deferred Taxes
5.21.42.20
Debts with Related Parties
5.21.42.30
Debts with Brokers
5.21.42.40
Debts with Personnel
2.556.338
5.21.42.50
Anticipated Revenue
0
0 5.143 0 363.424 0
13.475.883 55.961 13.419.922
0 2.217.402 35.226
AUDITED FINANCIAL STATEMENTS
67
STATEMENT OF FINANCIAL POSITION
68
5.21.42.60
Other Non-Financial Liabilities
5.22.00.00
TOTAL SHAREHOLDERS’ EQUITY
150.259.834
5.22.10.00
Paid-In Capital
151.303.510
5.22.20.00
Reserves
18.603.327
5.22.30.00
Retained Earnings
-19.647.003
5.22.31.00
Accumulated Profit/Loss
-21.885.071
5.22.32.00
Income for the Period
5.22.33.00
(Dividends)
0
5.22.40.00
Other Adjustments
0
AUDITED FINANCIAL STATEMENTS
8.163.087
2.238.068
STATEMENT OF COMPREHENSIVE INCOME
INCOME STATEMENT 5.31.10.00
CONTRIBUTION MARGIN (CM)
-69.652.428
5.31.11.00
Retained Premium
283.232.445
5.31.11.10
Direct Premium
283.392.905
5.31.11.20
Accepted Premium
0
5.31.11.30
Assigned Premium
-160.460
5.31.12.00
Change in Technical Reserves
5.31.12.10
Change in Reserve for Ongoing Risks
5.31.12.20
Change in Reserve for Unexpired Claims
5.31.12.30
Change in Fund Value Reserve
5.31.12.40
Change in Catastrophic Reserve against Earthquakes
5.31.12.50
Change in Reserve for Premium Inadequacy
5.31.12.60
Change in Other Technical Reserves
5.31.13.00
Claim Cost for the Period
-18.650.222
5.31.13.10
Direct Claims
-19.020.025
5.31.13.20
Assigned Claims
369.803
5.31.13.30
Accepted Claims
0
5.31.14.00
Annuity Cost for the Period
5.31.14.10
Direct Annuities
5.31.14.20
Assigned Annuities
2.372.134
5.31.14.30
Accepted Annuities
0
5.31.15.00
Intermediation Income
-21.071.051 -1.851.124 -3.712.558 -15.502.226 0 -5.143 0
-294.903.045 -297.275.179
-16.756.006
AUDITED FINANCIAL STATEMENTS
69
STATEMENT OF COMPREHENSIVE INCOME (CONTINUED)
70
5.31.15.10
Direct Agent Fees
-9.476.082
5.31.15.20
Broker Fees and Pension Fund Consultant Compensation
-7.286.922
5.31.15.30
Accepted Reinsurance Fees
0
5.31.15.40
Assigned Reinsurance Fees
6.998
5.31.16.00
Expenses for Non-Proportional Reinsurance
5.31.17.00
Medical Expenses
5.31.18.00
Insurance Impairment
5.31.20.00
ADMINISTRATION COSTS (AC)
-27.958.812
5.31.21.00
Remunerations
-8.339.610
5.31.22.00
Others
-19.619.202
5.31.30.00
INCOME FROM INVESTMENTS (II)
106.051.668
5.31.31.00
Net Income from Realized Investments
39.318.203
5.31.31.10
Real Estate Investments
20.409.785
5.31.31.20
Financial Investments
18.908.418
5.31.32.00
Net Income from Unrealized Investment
-11.557.736
5.31.32.10
Real Estate Investments
5.31.32.20
Financial Investments
5.31.33.00
Net Income from Accrued Investments
5.31.33.10
Real Estate Investments
5.31.33.20
Financial Investments
5.31.33.30
Depreciation
5.31.33.40
Management Expenses
5.31.34.00
Net Income from Investments for Single Investment Account Insurances
5.31.35.00
Investment Impairment
AUDITED FINANCIAL STATEMENTS
-751.038 -63.351 -690.160
7.832 -11.565.568 75.385.219 7.255.274 69.434.226 -1.264.669 -39.612 2.733.991 171.991
STATEMENT OF COMPREHENSIVE INCOME (CONTINUED) 5.31.40.00
TECHNICAL INCOME FROM INSURANCES (CM + II + AC)
8.440.428
5.31.50.00
OTHER INCOME AND EXPENSES
5.31.51.00
Other Income
1.555.412
5.31.52.00
Other Expenses
-1.679.172
5.31.61.00
Exchange Rate Difference
-1.172.909
5.31.62.00
Profit (Loss) from Adjustable Units
5.31.70.00
Income from Continuous Transactions Before Income Tax
5.31.80.00
Profit (Loss) from Discontinuous Transactions and Assets Available for Sale (less Tax)
5.31.90.00
Income Tax
-1.065.483
5.31.00.00
TOTAL INCOME FOR THE PERIOD
2.238.068
-123.760
-3.840.208 3.303.551 0
STATEMENT OF OTHER COMPREHENSIVE INCOME 5.32.10.00
Income from Property, Plant, and Equipment Assessment
5.32.20.00
Income from Financial Assets
5.32.30.00
Income from Cash Flow Hedging
5.32.40.00
Other Income with Adjustment to Shareholders’ Equity
5.32.50.00
Deferred Taxes
5.32.00.00
TOTAL OTHER COMPREHENSIVE INCOME
5.30.00.00
TOTAL COMPREHENSIVE INCOME
0 2.238.068
AUDITED FINANCIAL STATEMENTS
71
STATEMENT OF CHANGES IN EQUITY
Capital Paid-In
Surplus on Stock Price
Reserve for Hedging Adjustment
Reserve for Gap in SIA Insurances
Other Reserves
72
Reserves
127.378.510
400.180
11.748.904
-12.709
0
127.378.510
400.180
11.748.904
-12.709
0
0
0
0
0
0
Transactions with Shareholders
23.925.000
0
0
0
0
8.41.00.00
Capital Increases (Decreases)
23.925.000
8.42.00.00
(-) Dividend Distribution
8.43.00.00
Other Transactions with Shareholders
8.50.00.00
Reserves
6.471.165
-4.213
8.60.00.00
Transfer of Shareholders’ Equity to Income
8.70.00.00
SHAREHOLDERS’ EQUITY AT END OF PERIOD
18.220.069
-16.922
8.11.00.00
Initial Shareholders’ Equity Before Adjustments
8.12.00.00
Previous Period Adjustments
8.10.00.00
Shareholders’ Equity at beginning of Period
8.20.00.00
Comprehensive Income
8.21.00.00
Income for the Period
8.22.00.00
Total Recorded Revenue (Expenses) with Credit (Debit) to Shareholders’ Equity
8.23.00.00
Deferred Taxesv
8.30.00.00
Transfers to Retained Earnings
8.40.00.00
AUDITED FINANCIAL STATEMENTS
151.303.510
400.180
0
Retained Earnings
Other Adjustments Total
Other Income with Adjustment to Shareholders’ Equity
Income from Cash Flow Hedging
Income from Financial Assets
Income for the Period -21.254.083
Income from Property, Plant, and Equipment Assessment
Retained Earnings Previous Periods 107.650
118.368.452
-738.638
-738.638
-630.988
-21.254.083
0
0
0
0
117.629.814
-21.254.083
23.492.151
0
0
0
0
2.238.068
2.238.068
2.238.068 0 0
-21.254.083
21.254.083
0
0
0 0
0
0
0
23.925.000 23.925.000 0 0 6.466.952 0
-21.885.071
2.238.068
0
0
0
0
150.259.834
AUDITED FINANCIAL STATEMENTS
73
NOTE 1. REPORTING ENTITY
74
LEGAL NAME COMPAÑÍA DE SEGUROS CORPVIDA S.A. TAX NUMBER 96.571.890-7 LEGAL ADDRESS ROSARIO NORTE 660 PISO 21 ECONOMIC GROUP CORPGROUP NAME OF PARENT COMPANY CORPGROUP NAME OF GROUP ULTIMATE PARENT COMPANY CORPGROUP MAIN ACTIVITIES LIFE INSURANCE BUSINESS EXEMPT RESOLUTION NO. 190 SVS EXEMPT RESOLUTION DATE DECEMBER 13, 1989 SECURITIES REGISTRY NO 384 MAIN CHANGES IN OWNERSHIP FROM MERGERS AND ACQUISITIONS During the accounting period ending on December 31, 2012, no changes in ownership from mergers and acquisitions were made. SHAREHOLDERS NAME
TAX NUMBER
TYPE OF ENTITY
OWNERSHIP %
Mass Mutual (Chile) Limitada.
76.080.631-5
Domestic Legal Entity
27,88%
Corp Group Vida Limitada.
76.651.100-7
Domestic Legal Entity
72,12%
CREDIT RATING AGENCIES NAME
TAX NUMBER
RISK RATING
REGISTRATION N°
RATING DATE
Feller-Rate Clasificadora de Riesgo Ltda.
79.844.680-0
AA-
9
13-07-2012
ICR International Credit Rating Ltda
76.188.980-K
AA
12
01-08-2012
EXTERNAL AUDITORS Deloitte. SVS EXTERNAL AUDITOR REGISTRY N° 1
AUDITED FINANCIAL STATEMENTS
MANAGEMENT AND OTHER INFORMATION
Abello Prieto Christian Rodrigo Legal Agent ( Surnames / Names )
Tax Number 6376512-0
Abello Prieto Christian Rodrigo Chief Executive Officer ( Surnames / Names )
6376512-0
Reyes Borquez Alvaro Finance Manager ( Surnames / Names )
9211898-3
Saieh Guzman Maria Catalina 15385612-5
Chairwoman ( Surnames / Names )
75
Board Member Names Alejandro Ferreiro Yazigi 6362223-0 Francis Lucchesi Extranjero Bruce Stanforth Extranjero Si単a Gardner Fernando Jorge 7103672-3 Saieh Guzman Jorge Andres 8311093-7 Del Rio Charles Naylor 7667414-0 Saieh Guzman Maria Catalina 15385612-5 Nro of Employees | 685
Ordinary Shareholder Meeting Deadline 30
4
AUDITED FINANCIAL STATEMENTS
NOTE 2. BASIS OF PREPARATION
76
A) Compliance Statement E) New Standards and Interpretations These non-comparative Financial Statements for Future Dates as of 31.12.2012 have been prepared based on In accordance with IFRS 1, the Company has the standards issued by the Superintendency applied the same accounting policies in its of Securities and Insurance (hereinafter SVS), statement of financial position as of December as applicable, in conformity with the provisions 31, 2012 and its opening statement of financial contained in Official Circular No. 2,022, position as of January 1, 2012. These accounting issued by the SVS on May 17, 2011, and any policies comply with each one of the current amendments thereto and International Financial IFRS at the end of its financial statement period, Reporting Standards (IFRS). except for the optional exemptions applicable during its transition to IFRS and the regulations The Financial Statements as of 31.12.2012 were established by the SVS. approved by the Board of Directors on February 28, 2013. Additionally, the Company has opted for early adoption of IFRS 9, Financial Instruments B) Accounting Period (issued in November 2009 and amended in These non-comparative Financial Statements October 2010 and December 2011), as required cover the twelve-month period from January 1 to by General Regulation NCG No. 311 of the December 31, 2012. Superintendency of Securities and Insurance. The Company has chosen January 1, 2012 as its C) Basis of Assessment first-time adoption date. The Financial Statements have been prepared based on amortized cost; as an exception, Specifically, IFRS 9 requires that all financial variable-income instruments have been assets be classified and subsequently assessed accounted for at fair value. at amortized cost or at fair value, based on the entity’s business model for financial asset D) Functional and Presentation Currency management and the characteristics of the The Company has defined the Chilean Peso contractual cash flows associated with financial as its functional and presentation currency, as assets. this is the currency of the primary economic environment in which it operates. Therefore, all balances and transactions denominated in currencies other than the Chilean Peso are considered as “foreign currency”. Financial Statement disclosures are presented in thousands of Chilean pesos.
AUDITED FINANCIAL STATEMENTS
a) The following new Standards and Interpretations have been adopted for these financial statements: AMENDMENTS TO IFRS
MANDATORY APPLICATION DATE
IAS 12, Deferred taxes - Recovery of underlying assets
Effective for annual periods beginning on or after January 1, 2012
IFRS 1 (Revised), First-time adoption of International Financial Reporting Standards – (i) Removal of Fixed Dates for First-Time Adopters – (ii) Severe Hyperinflation
Effective for annual periods beginning on or after July 1, 2011
IFRS 7, Financial Instruments: Disclosures – Financial Asset Transfers
Effective for annual periods beginning on or after July 1, 2011
The application of these standards has had no significant impact on the amounts reported in these financial statements; however, it may affect the accounting of future transactions or agreements. b) The following new Standards and Interpretations have been issued, but their application date is not effective yet: NEW IFRS
MANDATORY APPLICATION DATE
IFRS 10, Consolidated Financial Statements
Effective for annual periods beginning on or after January 1, 2013
IFRS 11, Joint Arrangements
Effective for annual periods beginning on or after January 1, 2013
IFRS 12, Disclosure of Interests in Other Entities
Effective for annual periods beginning on or after January 1, 2013
IAS 27 (2011), Separate Financial Statements
Effective for annual periods beginning on or after January 1, 2013
IAS 28 (2011), Investments in Associates and Joint Ventures
Effective for annual periods beginning on or after January 1, 2013
IFRS 13, Fair Value Measurement
Effective for annual periods beginning on or after January 1, 2013
77
AUDITED FINANCIAL STATEMENTS
78
AMENDMENTS TO IFRS
MANDATORY APPLICATION DATE
IAS 1, Presentation of Financial Statements – Presentation of Other Comprehensive Income Components
Effective for annual periods beginning on or after July 1, 2012
IAS 19, Employee Benefits (2011)
Effective for annual periods beginning on or after January 1, 2013
IAS 32, Financial Instruments: Presentation – Clarification of the Requirements for Offsetting Financial Assets and Liabilities
Effective for annual periods beginning on or after January 1, 2014
IFRS 7, Financial Instruments: Disclosures – Amendments to Disclosures concerning the Offsetting of Financial Assets and Liabilities
Effective for annual periods beginning on or after January 1, 2013
IFRS 10, IFRS 11, and IFRS 12 – Consolidated Financial Statements, Joint Arrangements, and Disclosure of Interests in Other Entities – Guidelines for Transition
Effective for annual periods beginning on or after January 1, 2013
Investment Entities – Amendments to IFRS 10, Consolidated Financial Statements; IFRS 12, Disclosure of Interests in Other Entities; and IAS 27, Separate Financial Statements
Effective for annual periods beginning on or after January 1, 2014
The Company’s Management estimates that the future adoption of the aforementioned Standards and Interpretations will not have a significant impact on Financial Statements.
AUDITED FINANCIAL STATEMENTS
F) Going Concern Assumption The Company’s management believes that there are no significant uncertainties, significant subsequent events, or essential impairment indicators that may affect the going concern assumption as of the non-comparative financial statement presentation date. G) Reclassifications There are no reclassifications for these Financial Statements. H) When an Entity Does Not Apply a Requirement Established by IFRS The Financial Statements are presented under IFRS and the standards issued by the Superintendency of Securities and Insurance. I) Adjustments to Prior Periods and Other Accounting Changes Based on the provisions contained in Official Circular No. 2022 of the Superintendency of Securities and Insurance, this disclosure is applicable to Financial Statements subsequent to first-time adoption.
79
AUDITED FINANCIAL STATEMENTS
NOTE 3. ACCOUNTING POLICIES
80
1. Basis of consolidation The Company does not apply basis of consolidation. 2. Exchange rate difference The Company’s Management has defined the Chilean Peso as its functional currency. Therefore, transactions denominated in currencies other than the Chilean Peso are considered as denominated in foreign currency and shall be recorded based on the closing exchange rates effective as of the date of the relevant transactions. Likewise, assets and liabilities adjustable in foreign currency are shown at the exchange rate effective on the accounting period closing date. For the preparation of the financial statements, monetary assets and liabilities denominated in foreign currency are translated based on the exchange rates effective as of the date of the respective Financial Statements. The generated profits or losses are assigned to the profit and loss account under “Exchange Rate Difference”, its effect being reflected on the Statement of Comprehensive Income, as established in NCG No. 322 of the SVS. 3. Business combinations These correspond to transactions and other events in which an acquirer obtains control over one or more businesses regardless of the legal procedures through which such control is obtained; these are valued based on the standards contained in General Regulation NCG No. 322 of the Superintendency of Securities and Insurance and subsequent amendments thereto. As of financial statement closing date, the Company has not performed any business combinations.
AUDITED FINANCIAL STATEMENTS
4. Cash and cash equivalents Cash: The balances maintained as cash on hand and at banks at the end of the period. Cash Equivalents: Short-term (90-day) investments with high liquidity and readily converted into cash. Cash Flow Statement:The cash flow statement has been prepared based on the direct accounting method and in accordance with the instructions issued by the SVS through Official Circular No. 2,022 of May 17, 2011 and any subsequent amendments thereto. The following definitions are used in the preparation of the cash flow statement: Cash flows: Cash inflows and outflows as cash on hand and at banks and/or cash equivalents, the latter referring to highly liquid short-term investments having a low risk of undergoing changes in value. Operating flows: Cash flows and/or cash equivalents originating from ordinary operations, which are the main income sources in the insurance business. Investment flows: Cash flows and/or cash equivalents originating from the acquisition, sale, or otherwise disposal of long-term assets and other investments not included in the Company’s cash and cash equivalents, such as materials, intangible assets, or financial investments. Financing flows: Cash flows and/or cash equivalents originating from activities generating changes in net equity size and composition and in liabilities that are not part of operating flows. Payments in favor of shareholders on account of dividends are also recorded within this group.
5. Financial Investments equal to or higher than UF 150 has been traded. As established in General Regulation NCG No. 311 iv) Investment funds not meeting the requirement of the Superintendency of Securities and Insurance, stated in the previous paragraph are valued as the Company values its Financial Investments as follows: shown below: - Investment funds periodically submitting an a)Â Financial Assets at Fair Value economic value to the SVS are valued at such Those financial assets acquired to obtain a shorteconomic value. term benefit from variations in their prices and - Investment funds periodically submitting financial all those instruments not meeting the necessary statements, but not an economic value to the SVS conditions to be valued at amortized cost. Also shall be valued based on installment book value in included are financial derivatives not considered accordance with these financial statements. for hedging. The Company will acquire financial assets for - Investment funds not submitting information to the trading with the purpose of obtaining a short-term SVS shall be valued at book value. profit (less than one year). v) Domestic mutual funds and mutual funds set up Subsequent valuations shall be carried out at fair in the country but with associated assets being value in accordance with current market prices at invested in foreign securities are valued at the the closing of each business day. Profits or losses installment redemption value on financial statement from adjustments for valuation at fair value as closing date. well as results from negotiation activities shall be included under income for the period. vi) Foreign shares held for trading are valued at i) Shares of domestic corporations whose annual their stock exchange trading value. adjusted turnover at financial statement closing date is equal to or higher than 25%, as provided vii) Foreign shares not held for trading are valued in Title II of General Regulation NCG No. 103 of based on general IFRS. January 5, 2001 and any subsequent amendments viii) International investment funds set up abroad thereto, are valued at their stock exchange trading are valued at the installment closing price on the value. last stock exchange trading day in the financial ii) Shares of closely-held domestic corporations statement closing month. not meeting the requirement stated in the previous paragraph shall be carried at book value. b) Financial Assets at Amortized Cost iii) Domestic investment funds and investment funds These are assets with a fixed maturity date and set up in the country but with associated assets payments collected in fixed or determinable being invested in foreign securities which, as of amounts. financial statement closing date, have an annual Criteria used to assess an instrument at amortized adjusted turnover equal to or higher than 20%, cost: computed based on the domestic stock turnover, 1.-Basic loan characteristics. The return for the are valued at the average weighted price on holder is a fixed amount. the last stock exchange trading day prior to financial statement closing date, by the number of 2.-Management based on contractual return. installments agreed. The transactions considered Financial instruments carried at amortized cost are for this calculation are those where a total amount
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subject to impairment evaluation. asset exceeds its recoverable amount. An instrument may meet the aforementioned criteria i) Financial Assets to be valued at amortized cost, but the Company A financial asset or group of financial assets is said may value it at fair cost with effect on income to to be impaired, and a loss due to value impairment reduce a given accounting effect. shall have occurred, if and only if there is objective Investments valued at “amortized cost” shall evidence of impairment as a result of one or more recognize accrued interest on income as a function events occurring after the initial recognition of the of their purchase interest rate. Amortized cost shall asset (an “event causing the loss”), with this event or mean the initial cost minus principal payments events that caused the loss having an impact which collected. may be reliably assessed on the estimated future cash flows associated with the financial asset or 6. Hedging transactions group of financial assets. Investments in derivative instruments are valued On financial statement closing date, the Company based on NCG No. 311 of the SVS. The Company evaluates if there is any indication of impairment maintains in its portfolio the following derivative in the value of a financial asset based on the instruments in order to hedge exchange rate and Company’s accounting policy. interest rate variations: cross currency swaps and ii) Non-financial assets forwards associated with fixed-income instruments The Company shall evaluate if there is any valued at amortized cost as backup for life annuity indicator of an impairment in the value of its assets obligations, with flows being matched. Flows if these have a defined useful life, for which it shall expressed in UF are valued at amortized cost, while conduct the corresponding impairment tests. For flows not meeting the aforementioned condition assets with an indefinite useful life, if no impairment are carried at fair value. indicator exists, the Company shall conduct the test All investments in derivative instruments must be on an annual basis. authorized by the Company´s Board of Directors The Company shall apply the Impairment Test and included in the Derivatives Use Policy. to the following Assets as indicated by the Superintendency of Securities and Insurance 7. Investments in single investment account standards based on the definitions stated for each (sia) insurances one of them: In accordance with the Company’s Investment a) Premiums Receivable from Insured Parties Policy, investments backing up the fund value b) Accounts Receivable from Reinsurers reserve for SIA insurances shall be comprised of c) Accounts Receivable from Lease Rentals other than two portfolios; the first shall correspond to fixedfrom Leasing income instruments, which shall be valued at d) Intangible Assets and Goodwill originating from amortized cost, and the second portfolio shall Business Combinations correspond to variable-income instruments, which e) Fixed Assets at Amortized Cost shall be valued at market value with effect on income and in accordance with the instructions delivered by the Superintendency of Securities and 9. Real estate investments Insurance through NCG No. 311. a. Investment Properties In accordance with NCG No. 316 of the 8. Impairment Of Assets An impairment has occurred when the value of an
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Superintendency of Securities and Insurance and IFRS, investment properties shall be valued at the lower value between the inflation-adjusted cost less accumulated depreciation and the commercial appraisal value based on the lower of two appraisals. i) Domestic Real Estate Investments In accordance with NCG No. 316 of the Superintendency of Securities and Insurance, these investments shall be valued at the lower value between the inflation-adjusted cost less accumulated depreciation and the commercial appraisal value based on the lower of two appraisals to be carried out at least every two years. Notwithstanding the above, if the Company has information indicating a market value potentially lower than the appraised value of a real estate, a new appraisal shall be carried out in order to adjust the value, as applicable. If the appraised value is higher than the inflationadjusted cost less accumulated depreciation, the real estate shall not be subject to any accounting adjustment, this higher value being reflected in disclosures. However, if the appraised value is lower than the inflation-adjusted cost less accumulated depreciation, the Company shall perform an adjustment for the difference through a provision charged against income, which shall be maintained until a new appraisal is carried out, where this adjustment shall be reversed and a new provision shall be set up, as applicable. ii) Foreign Real Estate Investments In accordance with NCG No. 316 of the Superintendency of Securities and Insurance, these investments shall be valued at the lower value between their historical inflation-adjusted cost in the corresponding country, less accumulated depreciation, and the commercial appraisal value based on the lower of two appraisals to be carried out at least every two years.
Notwithstanding the above, if the Company has information indicating a market value potentially lower than the appraised value of a real estate, a new appraisal shall be carried out in order to adjust the value, as applicable. If the appraised value is higher than the inflationadjusted cost less accumulated depreciation, the real estate shall not be subject to any accounting adjustment, this higher value being reflected in disclosures. However, if the appraised value is lower than the inflation-adjusted cost less accumulated depreciation, the Company shall perform an adjustment for the difference through a provision charged against income, which shall be maintained until a new appraisal is carried out, where this adjustment shall be reversed and a new provision shall be set up, as applicable. iii) Real Estate under Construction In accordance with NCG No. 316 of the Superintendency of Securities and Insurance, this real estate shall be recorded at its inflationadjusted carrying value, which shall reflect the construction status until completion in a condition enabling commercial appraisal thereof, being valued at that time, as appropriate. Notwithstanding the above, if the Company has information indicating a market value potentially lower than the appraised value of a real estate, a new appraisal shall be carried out in order to adjust the value, as applicable. iv) Awarded Real Estate Awarded real estate shall be valued at the lower value between its book value and its appraised value, with appraisals being carried out at the time of award and before the real estate is sold. b. Leasing Accounts Receivable Based on the provisions issued by the Superintendency of Securities and Insurance and IFRS 1 “First-Time Adoption of International Financial Reporting Standards”, at the time of transition the
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Company shall maintain accounts receivable such if and only if: associated with financial leasing (lessor) at their (a) Future economic benefits attributed to it flow to present value. the entity and In accordance with NCG No. 316, the Company (b) The asset cost may be measured in a reliable shall value its financial leasing transactions at the way. lower value among the residual contract value Intangible assets acquired from third parties determined based on the standards issued by the shall be valued at cost and shall be amortized Chilean Accountants Association, the inflationin accordance with the Company’s accounting adjusted cost less accumulated depreciation, and policies, not exceeding 5 years. the commercial appraisal value based on the lower of two appraisals. 11. Non-current assets held for sale c. Properties for own use An entity shall classify a non-current asset (or In accordance with NCG No. 316 of the a group of assets for use) as held-for-sale if its Superintendency of Securities and Insurance and carrying amount will be essentially recovered IFRS, these properties shall be valued at the lower through a sales transaction instead of through value between the inflation-adjusted cost less continued use, i.e., the sale must be highly accumulated depreciation and the commercial probable. The Company has no assets of this type. appraisal value based on the lower of two appraisals. 12. Insurance transactions d. Plant and equipment for own use a. Premiums Fixed assets are accounted for based on the cost These correspond to the amount owed to the model. The cost model is an accounting method Company by each reinsured party on account under which fixed assets are recorded at cost less of premiums less acceptance discount and accumulated depreciation and less accumulated impairment. impairment losses, as defined in IAS 16. b. Other Assets and Liabilities from Insurance and Maintenance, conservation, and repair expenses Reinsurance Contracts are charged against income, based on the i. Underlying derivatives in insurance contracts accrual criterion, as cost for the accounting year The Insurance Contracts executed by the in which they are incurred. Company have no underlying derivatives. The Company depreciates its assets based on ii. Insurance contracts acquired by means of the linear method as a function of the years of business combinations or portfolio assignments estimated useful life. The Company has no such insurance contracts. Profit or loss from the sale or removal of an asset iii. Acquisition expenses is calculated as the difference between the selling Acquisition expenses are directly recognized under price and the asset book value and is recognized income on an accrual basis. in income accounts. c. Technical Reserves 10. Intangible assets i. Reserve for Ongoing Risks An intangible asset is a non-monetary asset This corresponds to the Company’s obligation owned by the Company, which is without physical with insured and reinsured parties originating substance and identifiable. It will be recognized as
AUDITED FINANCIAL STATEMENTS
from premiums from accepted insurance and reinsurance contracts set up to cover outstanding risks on financial statement closing date. This reserve includes the value of the hedging cost reserve that must be set up in accordance with current regulations for life insurances with a single investment account. The Reserve for Ongoing Risks shall be applied to the main hedges with a maturity of up to 4 years or those with higher terms that may have been submitted by the Company and approved by the Superintendency of Securities and Insurance. In the case of additional hedges, the same criterion shall be applied regardless of the validity of the main hedge. The estimation of the Reserve for Ongoing Risks shall be carried out using the methodology indicated in NCG No. 306 for first group insurances or the methodologies submitted by the Company and approved by the SVS, as the case may be. ii. Reserve for Private Annuities The technical reserve set up for the annuity insurance shall be recorded in accordance with current regulations. This reserve must include any monthly payments that, as of estimation date, are due and have not been paid yet. iii. Reserve for Unexpired Claims This corresponds to the reserve for outstanding policies and is equivalent to the difference between the present value of future insurance benefits to be paid by the insurer and the present value of the future premiums to be paid by the insured party in accordance with current regulations. The value of the hedging cost reserve to be set up in accordance with current regulations for life insurances with a single investment account must be recorded in this account. The estimation of the Reserve for Unexpired Claims shall be carried out in accordance with the methodology, technical interest rate, and probability tables indicated in
NCG No. 306 or in accordance with the tables submitted by the Company and approved by the Superintendency of Securities and Insurance, as applicable. The Reserve for Unexpired Claims shall be applied to hedges with a validity exceeding 4 years or those subject to shorter periods that may have been submitted by the Company and approved by the Superintendency of Securities and Insurance. In the case of additional coverages, the previous criterion shall be applied regardless of the main coverage period. iv. Disability and Survival Insurance (SIS) Reserve The Company has no Insurance Contracts originating, or compelling it to set up, this type of reserve. v. Reserve for Life Annuities The Technical Reserve for pension fund life annuity insurances enforced before January 1, 2012 shall be estimated in accordance with the regulations contained in Official Circular No. 1512 of 2001 and General Regulation NCG No. 318 of the Superintendency of Securities and Insurance and any other instructions effective as of September 1, 2011. Based on this: a) On the date of validity or acceptance of an insurance policy, the carrying amount of its Base Technical Reserve shall be reflected under liabilities, charged against the “Annuity Cost” income account. b) On financial statement closing date, the Base Technical Reserves for each of the outstanding policies shall be re-estimated. This will be based on actuarial flows as of estimation date and cost rates or sales rates, as applicable. c) On a monthly basis, on the corresponding financial statement closing date, the Financial Reserve shall be determined. Any differences arising between the Base Technical Reserve and the Financial Reserve shall generate adjustments, the effects of which shall be reported under equity
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account “Reserves for Hedging”. d) The change in the Base Technical Reserve shall be recorded in the “Annuity Cost” account. e) In case of outstanding reinsurances, such part of the Base Technical Reserve corresponding to the portion assigned to reinsurers shall be estimated based on the corresponding reinsured liability flows on the date of re-estimation and the Equivalent Cost Rate (CR) or the Selling Rate (SR), as applicable. f) Both the Base Technical Reserve and the Financial Reserve shall be presented in gross terms in the Financial Statements. The amount corresponding to the assigned reserve shall be reported as an asset from an assigned reinsurance. g) Liability flows shall be determined based on current regulations and, if applicable, considering the gradual application of RV-2004, B-2006, and MI-2006 mortality tables in accordance with the gradual recognition mechanism applied by the Company. For policies with a validity starting on January 1, 2012, the Technical Reserve shall be estimated based on the provisions contained in General Regulation NCG No. 318 of the Superintendency of Securities and Insurance for such contracts, not considering the Company’s matching assessment: a) The rate used for discounting expected pension fund flows shall be the lowest value between the Market Rate (MR) and the Selling Rate (SR) as of policy validity date, as defined in Title III of Official Circular No. 1512. b) Only the Base Technical Reserve shall be set up in liabilities, considering the interest rate established on policy validity date in accordance with the previous paragraph. c) Flows from life annuity obligations assigned through reinsurance shall not be discounted for the calculation of the Technical Reserve for the corresponding policies. Assigned flows shall be recognized as an asset from reinsurance,
AUDITED FINANCIAL STATEMENTS
determined based on the same interest rate used for the calculation of the Technical Reserve for the reinsured policy. d) If, at the time of the execution of the reinsurance contract, there is a difference between the reinsurance premium and the asset set up as previously indicated, this shall be immediately recognized under income. e) The estimation of the expected pension fund flows shall be fully based on the mortality tables established by the Superintendency of Securities and Insurance, with their corresponding improvement factors effective as of estimation date. For the acceptance of reinsurances or portfolio transfers effective after January 1, 2012 and regardless of the underlying policy validity date, the Technical Reserve shall be estimated without considering matching assessment, discounting the accepted flows at the lowest interest rate between the MR as of the effective reinsurance contract date and the interest rate implicit in the acceptance of the flows (interest rate determined based on the reinsurance premium). The application of the previous paragraphs shall be carried out without prejudice to the deduction of the reinsurance assignments of the Technical Reserve set up in order to comply with the risk equity and indebtedness limit requirements established in Decree Law DFL No. 25 of 1931, which will be subject to the provisions contained in article 20 of such legal text and the specific regulations issued by the Superintendency of Securities and Insurance. vi. Claim Reserve This is the Company’s obligation towards insured and reinsured parties with respect to the amount of the claims or commitments assumed through insurance policies, for claims occurring and both reported and not reported, including all expenses associated with the settlement that have affected the risk subscriptions of the insurer entity and have
not been paid. The Company conducts a Liability Adequacy Test This reserve must include those payments that, as on each quarterly financial statement closing date of estimation date, are due and have not yet been in order to assess the adequacy of the reserves set paid to the insured party. up in accordance with current regulations issued by The Claim Reserve shall be recorded under a the Superintendency of Securities and Insurance. “Claim Reserve” liability account, segregating the The test is based on current hypothesis rereserve for Reported Claims and the Reserve for estimations assumed by the Company for Claims Occurring But Not Reported (OYNR) on estimating cash flows originating from insurance financial statement closing date. contracts, considering insured party options or The Reported Claim Reserve shall in turn be benefits as well as contracted guarantees. classified as follows: The contract flows indicated in the previous (a) Claims Settled But Not Paid paragraph consider at least the flows arising from (b) Claims Settled But Contested by the expected claims and direct expenses related to Insured Party settlement thereof, discounting, if applicable, the (c) Claims Under Settlement Process future premiums the insured party has agreed to The estimation of the Reserve for Claims Occurring pay as part of the insurance contract. But Not Reported shall be based on the general The Liability Adequacy Test is conducted standard application method provided for in considering flows before taxes. NCG No. 306 (Incurred Claim Triangles) or If, due to the application of this Test, a Technical any of the alternative methods provided for in Reserve inadequacy is verified, the Company the same regulation (Simplified Method and shall set up an additional Technical Reserve in Transition Method), or any methods that have been the statement of income corresponding to the submitted by the Company and approved by the respective closing date. Superintendency of Securities and Insurance, as However, based on the periodical evaluation applicable. of the items analyzed in this Test, the additional vii. Catastrophic Reserve against Earthquakes Technical Reserve may be reversed in the income This is not applicable to Life Insurance Companies. statement corresponding to the respective viii. Reserve for Premium Inadequacy closing date. The Reserve for Premium Inadequacy corresponds The Liability Adequacy Test recognizes the risk to the amount obtained by multiplying the Reserve assigned to the reinsurer, i.e., when the need to set for Ongoing Risk less the reinsurance portion by the up an additional Technical Reserve is determined, inadequacy factor. The calculation methodology this is recognized in gross terms under liabilities and is indicated in General Regulation No. 6 of the the reinsurer participation under assets. Superintendency of Securities and Insurance. When a Premium Inadequacy Test is conducted, Regardless of the risk grouping method used to the Company evaluates whether this test meets determine the amount of the Reserve for Premium the requirements to be considered in replacement Inadequacy, this is assigned and reported in the of the Liability Adequacy Test. If this is so, the latter financial statements based on the FECU branch Test is not required. classification determined by the Superintendency of The Test is applied for groups of contracts sharing Securities and Insurance. similar risks and jointly managed as part of the ix. Additional Reserve based on Liability Adequacy Test
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same portfolio. Accordingly, both the Test and the reserve inadequacy, as the case may be, are measured on a portfolio basis. However, if an inadequacy is verified as a result of the Test, this is assigned and presented in the financial statements, based on the FECU branch classification determined by the Superintendency of Securities and Insurance.
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Company shall set up reserves for ongoing risk or reserves for unexpired claims, being able to apply different criteria with respect to the main coverage and additional coverages in accordance with the relevant type of risk. A reserve gap shall be established for the risk assumed by the Company on account of term, interest rate, currency, and type of instrument risks, between the fund value reserves and the If, in accordance with the Superintendency of investments that back up the reserve. The estimation Securities and Insurance regulations, the gradual of this reserve shall be based on the instructions recognition of mortality tables for technical issued by NCG No. 306, and the determined reserve calculation is effective, the Liability amount shall be recorded in the “Gap Reserve” Adequacy Test does not consider the differences equity account, as indicated in Official Circular in reserves accounted for by such gradual process. No. 2022 of the Superintendency of Securities and Consequently, if an inadequacy is verified, an Insurance. additional reserve is set up only for the amount xi. Other Technical Reserves exceeding the difference in technical reserves The reserve for debts with insured parties and accounted for by the gradual process. other reserves set up by the insurance entity in x. Reserve for Insurances with a Single Investment accordance with current regulations and any Account additional reserves that must be set up by Mutual In accordance with the instructions issued in Fund Companies according to their by-laws shall NCG No. 306, the deposit and risk components be recorded under this heading. associated with an insurance with SIA shall be xii. Reinsurer Interest in Technical Reserves accounted for on a joint basis. Therefore, the The Company recognizes reinsurer interest total funds transferred to the Company by the in technical reserves on an accrual basis, in contracting party shall be recognized as the accordance with current contracts. insurance premium. d. Matching (to be reported for policies with The deposit component shall be recognized as validity prior to January 1, 2012) a technical reserve denominated “Fund Value For life annuity policies effective prior to January 1, Reserve” and shall correspond to the Policy Value 2012, the Company has valued technical reserves of each contract on the reserve estimation date using matching in accordance with the conditions established in regulations in accordance with General Regulation each contract, without deduction of any potential NCG No. 318 and Official Circular No. 1,512 of redemption charges. the Superintendency In the case of insurances associated with NCG of Securities and Insurance and any subsequent No. 176 of 2005, neither the technical reserve amendments thereto. associated with the deposit component nor the Based on this regulation, as future flows from the contract premium shall be recognized under portfolio of fixed-income instruments and technical liabilities. reserves generated by life annuities are matched Concerning the insurance component, the over time, future flows from eligible technical
AUDITED FINANCIAL STATEMENTS
reserves shall be discounted at a rate closer to the average profitability of the long-term government financial instruments determined in the month where the policy became effective. Any differences arising from the application of this regulation and general liability valuation regulations generate adjustments as of financial statement closing date, the effects of which must be presented as part of shareholders’ equity under the “Reserves for Hedging” account.
a. When the Company has an outstanding obligation (whether statutory or underlying) as a result of past events; b. When, as of financial statement date, it is likely that the Company may have to make use of resources in order to pay the obligation; and c. When the value of the amount may be estimated in a reliable way. The Company recognizes its Provisions for Liabilities on an accrual basis. 13. Interests in related companies 16. Investment Revenues And Expenses The Company has ownership interests in related Investment revenues and expenses are Companies through stock and current accounts, recognized on an accrual basis in accordance whose balances are disclosed under the heeding with the Company’s contracts or obligations “Financial Assets at Fair Value” and “Related in the Statement of Comprehensive Income in Debtors” respectively. accordance with the following detail: a. Financial Assets at Fair Value 14. Financial liabilities The Company records revenues associated with Financial liabilities are classified either as financial assets at fair value, on an accrual basis, financial liabilities at fair value under income in accordance with the market value of these or are designated as other financial liabilities investments on financial statement closing date and in accordance with IAS 39 under the following the book value thereof . categories. The associated expenses are recognized on an (a) Financial liabilities at fair value under income accrual basis in accordance with the Company’s - Financial liabilities are classified at fair value contracts or obligations. under income when they are held for trade or are b. Financial Assets at Amortized Cost designated at fair value under income. The Company records the revenues associated (b) Other financial liabilities - Other financial with financial assets at amortized cost, on an liabilities, including loans, are initially valued as per accrual basis, estimated in accordance with the amount of cash received, less transaction costs. the same discount rate used to determine the Other financial liabilities are subsequently valued instrument price at the time of purchase. at amortized cost using the effective interest rate The associated expenses are recognized on an method, recognizing interest expenses based on accrual basis in accordance with the Company’s effective profitability. contracts or obligations. 15. Provisiones. 17. Interest costs Provisions are liabilities with respect of which there Interest costs are recorded on an accrual is uncertainty concerning their amount or validity basis in accordance with the interest rate period. They are recognized in the Statement of agreed upon at the time of the granting of the Financial Position when the following circumstances corresponding credit. are met:
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18. Claim Costs The costs of claims and annuities are recorded on an accrual basis in accordance with the provisions contained in the corresponding Company’s Insurance Contracts. The claim cost includes all direct costs associated with the settlement process, such as payments associated with claimed coverages and expenses incurred in processing, assessing, and resolving the claim and in accordance with the provisions contained in the corresponding insurance contracts. These costs are directly reflected in the Company’s Statement of Comprehensive Income.
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19. Intermediation costs Intermediation costs include all fees and expenses associated with the insurance selling activity and reinsurance negotiations. Also included are expenses on account of base remuneration and fees generated by sales agents hired by the Company as well as all fees effectively paid to brokers and pension fund consultants for the contracts marketed by them. These payments are directly reflected on the Company’s Statement of Comprehensive Income for the accounting period in which they were accrued. 20. Foreign currency transactions and balances Foreign currency transactions are translated into the functional currency using the following exchange rates: a) Assets and liabilities based on the observed exchange rate on the last banking day of December 2012 as published by the Chilean Central Bank. b) Income, expenses, and cash flows based on current exchange rates as of transaction dates. Profits and losses in foreign currency resulting from the settlement of these transactions and translation at the closing exchange rates for monetary assets and liabilities denominated in
AUDITED FINANCIAL STATEMENTS
foreign currency are recognized in the Statement of Comprehensive Income. 21. Income tax and deferred tax The first-category income tax was determined based on the net taxable income determined for tax purposes. The Company records the effects of deferred taxes originating from temporary differences and other events generating differences between the accounting income and the taxable income. The expense for corporate income tax for the period is estimated based on the sum of the current tax arising from the application of the corresponding tax rate to the taxable base for the accounting period (after deducting the admissible tax credits) and the variation in assets and liabilities from deferred taxes recognized in the consolidated profit and loss accounts. Assets and liabilities from deferred taxes include temporary differences, identified as those amounts expected to be payable or recoverable on account of differences between the book value of equity elements and their corresponding taxable values as well as the negative taxable bases pending compensation and credits from fiscal deductions not applied. These amounts are recorded by applying the tax rates at which they are expected to be recovered or settled to the corresponding temporary difference. The effects of deferred taxes due to temporary differences between the tax balance and the financial balance are recorded on an accrual basis in accordance with IAS 12 “Income Taxes”. The Company recognizes liabilities from deferred taxes, as applicable, through future estimation of the tax effects attributable to differences between the liability carrying values and taxable values. The assessment of liabilities from deferred taxes is carried out based on the tax rate which, in accordance with current tax
legislation, is to be applied in the year where liabilities from deferred taxes are realized or settled. The future effects of changes in tax legislation or tax rates are recognized under deferred taxes as of the date on which the law approving such changes is published. As of December 31, 2012, the Company has recognized assets from deferred taxes because Management has established the likelihood of obtaining tax benefits in the future enabling the use of temporary differences from fiscal losses existing at the end of each period. Assets and liabilities from deferred taxes may be compensated when the right to compensate the amounts recognized in such items has been legally recognized with the tax authority and when the assets and liabilities from deferred taxes arise from the income tax corresponding to the same tax authority and the Company has the intention to settle its current taxable assets and liabilities on a net basis. Law No. 20,455, published in the Official Gazette on July 31, 2010, established that the first-category income tax rate for corporations would increase from a 17% rate to a 20% rate for commercial year 2011, would then be reduced to 18.5% for commercial year 2012, and would be again reduced to 17% from commercial year 2013 onwards. On September 27, 2012, Law 20,630 was enacted; among other matters, it established a 20% income tax rate, eliminating the transitory status of this rate established in Law 20,455. 22. Discontinuous Operations As of December 31, 2012, the Company has no discontinuous operations.
and shall be recorded based on current closing values. 24. Dividend policy Based on Company by-laws, every year the Ordinary Shareholder Meeting will set the dividend to be distributed to the Shareholders. At an Ordinary Shareholder Meeting held on April 26, 2012, the decision was made not to distribute any Dividends, with income for 2011 being recorded under Retained Earnings. 25. Others The Company has no other non-disclosed accounting policies.
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23. Adjustable units These correspond to transactions conducted in adjustable units, such as UFs, UTMs, etc.,
AUDITED FINANCIAL STATEMENTS
NOTE 4. SIGNIFICANT ACCOUNTING POLICIES
All significant accounting policies have been properly disclosed in Note No. 3 Accounting Policies.
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NOTE 5. FIRST-TIME ADOPTION
Guidelines for Transition to IFRS Until December 31, 2011, the Company issued its financial statements in accordance with generally accepted accounting principles in Chile and the standards and instructions issued by the Superintendency of Securities and Insurance (SVS). Starting on January 1, 2012, the financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and the standards issued by the Superintendency of Securities and Insurance. NOTE 5.1. EXEMPTIONS a)Business combinations This exemption is not applicable. b)Fair value or revaluation as attributable cost As provided for in IFRS 1 “First-time adoption of International Financial Reporting Standards�, the Company has adopted the exemption provided for in paragraphs 16 to 19 of IFRS, for which the amortized cost of assets corresponding to property, plant, equipment for own use, and intangible assets existing as of transition date was assigned as an attributable cost. c) Employee benefits The Company has no retirement or postemployment plans, as defined in IFRS 19, for which the exemption established in paragraph 20, IFRS 1 is not applicable. d) Currency translation reserve This exemption is not applicable.
e) Composite financial instruments This exemption is not applicable. f) Transition date for subsidiaries, associated companies, and jointly controlled entities This exemption is not applicable. g) Share-based payments This exemption is not applicable. h) Insurance contracts As provided for in paragraph 25D of IFRS 1, the Company has decided to use the exemption contained in such regulation, and therefore, to apply the transition standards established by IFRS 4. i) Liabilities from restoration or dismantling This exemption is not applicable. j) Initial valuation of financial assets and liabilities at fair value As provided for in paragraph 4.1.5 of IFRS 9, the Company has applied the exemption contemplated in that paragraph with respect to initial recognition at fair value with changes in income from financial instruments, since this removes or significantly reduces any assessment or recognition inconsistency. k)Services concessions This exemption is not applicable. l) Comparative information for mineral resource exploration and evaluation businesses This exemption is not applicable. m) Leases This exemption is not applicable because the Company has no underlying leases in its contracts and/or agreements.
AUDITED FINANCIAL STATEMENTS
93
NOTE 5.2. NOTE ON SHAREHOLDERS’ EQUITY RECONCILIATION 5.2.1SUMMARY OF CONSOLIDATED EQUITY RECONCILIATION AS OF JANUARY 1, 2012. M$ Total Shareholders' Equity based on Chilean Accounting Principles:
NOTE
118.368.452
Detail of adjustments: Adjustment to property, plant, and equipment Adjustment for functional currency Accumulated currency translation adjustment Adjustment for deferred expenses and other intangible assets Adjustment for fair value Adjustment to financial instruments
(590.450)
(1)
Adjustment to investments accounted for applying the interest method Accumulated effect from other non-significant items
-114709
(3)
Adjustment for deferred taxes
(33.479)
(2)
Adjustments to real estate investments
94
Adjustments for technical reserves
Adjustment for minority interests Total Shareholders’ Equity pursuant to IFRS
AUDITED FINANCIAL STATEMENTS
117.629.814
(1) Shareholders’ equity adjustment corresponding to impairment of fixed-income instruments and the recognition of variable income marked to market using the average at the closing of the last stock exchange day. (2) Application of deferred taxes for those items recognized at first-time adoption. (3) Shareholders’ equity adjustment corresponding to impairment of accounts receivable from real estate leases.
NOTE 6. RISK MANAGEMENT
I. Financial Risks A Qualitative Information 1.- Credit Risk a) Risk Exposure and Origin Credit Risk refers to potential losses undergone by an investor as a consequence of temporary or indefinite delay in compliance with contractual obligations by its business counterparties. b) Objectives, Policies, and Processes for Risk Management as well as Methods Used to Assess Such Risk i) Considerations and Objectives The objective established in the Investment Policy is to maximize the portfolio risk-return ratio, always maintaining a well-known risk level restricted to the risk appetite defined by the Board of Directors so that shareholders may obtain adequate return for the invested capital and our insured customers are provided with the assurance that the Company will fulfill all commitments with them. ii) General Aspects of the Risk Philosophy The Company considers within its risk philosophy that investments should have a previously identified and determined credit risk. This is defined based on a qualitative and quantitative analysis prior to the execution of each business, which attests to the creditworthiness and nature of each debt issuer. To comply with this, the limits defined by Corporate Governance - concentration by
issuer, economic sector, or group - are reviewed, and ongoing follow-up on the performance of each investment is carried out, generating any necessary alerts through investment committees. iii) Follow-up and Reporting To comply with the above, the Company relies on an Investment Policy approved by the Board of Directors, comprising all the elements necessary to meet the objectives defined by shareholders based on the risk appetite established by the Company. An Investment Committee in charge of reviewing investment/disinvestment proposals and carrying out the credit risk analysis associated with each of them meets on a bi-monthly basis. This Committee also reviews the credit standing of each one of the Company’s financial investments in Chile and abroad and Bank, Mutual Fund, Broker, and counterparty credit lines approved for derivative transactions. The members of this Investment Committee are representatives of the Company’s Board of Directors, its Chief Executive Officer, the Investment Manager, and the Risk SubManager, among other executive officers. iv) Methodology The Company assesses the credit risk associated with its investments based on the rating and research studies carried out by rating agencies as well as a substantial internal analysis by Risk Sub-Management. This study considers the financial standing of each
AUDITED FINANCIAL STATEMENTS
95
2.- Liquidity Risk a) Risk Exposure and Origin Liquidity Risk Definition Liquidity risk refers to the potential loss caused by the advance sale of financial assets, at unusual discounts, in order to face nonv)Impairment Policy scheduled or previously committed cash outflows The determination of a value decrease in the or due to a transaction that could not be timely investment portfolio arises from the economic settled or hedged with available cash. expectation or objective evidence that an asset Due to the particular nature of the Life Annuity or a group of assets, valued at amortized cost, Industry, liabilities generally have a higher will undergo impairment as a consequence of average period than assets, and consequently, one or more events, on a corporate, industry, exposure to a liquidity crisis because of this is or country, after its initial valuation. Such events low. Along the same line, it should be noted that must have an impact on future cash flows that liabilities are concentrated in life annuities with may be reasonably measured. a high degree of diversification without At the closing of each quarter, the Company any possibility of advance enforcement, evaluates if there is any indication of impairment which reduces even more the exposure in the value of an asset. Loss from impairment to a liquidity crisis. of instruments assessed at amortized cost is In addition, given that liabilities associated with equivalent to the positive difference between its SIA accounts are backed up by investments equitable value and its fair value. associated with liquid indices or assets backing c) Changes in a) or b) since the preceding up the offer made by the Company in each period. of its policies, liquidity risk is low. Additionally, As this is first-time adoption, no comparisons these liabilities represent a lower percentage of with prior periods are possible. the portfolio and, even under a stress scenario, the depth of the markets in which the assets backing up these liabilities are located is much greater than the Company’s potential liquidity needs. Within this context, the Company focuses liquidity risk assessment and management on the projection of short-term cash flows under a normal scenario and under a stress scenario, resorting to credit lines with the financial system or amounts defined by sales under repurchase agreements or advance settlement of investments with maturity exceeding 3 months so as not to affect the value of investments, and, consequently, the income statement as a issuer and counterparty for financial and real estate investments, a review of their financial statements, a ratio analysis, and a projection of flows and creditworthiness stress among other methodologies.
96
AUDITED FINANCIAL STATEMENTS
result of the write-offs associated with advance redemptions. b) Risk Management Objectives, Policy, and Processes i) Objectives To directly contribute to ensuring an adequate liquidity level through the anticipation of scenarios enabling the establishment of guidelines that proactively facilitate decisionmaking and assign the corresponding responsibilities to the involved areas in case of this kind of risk. ii) Guidelines Liquidity risk estimation is a function of the projection of the maturities of the investment portfolio, of investments committed in the future, of the sales of Company products, and of liability payments. The projection of net flows from assets and liabilities determines the liquidity risk amount, which is defined as the positive difference between net projected disbursements and earnings for a specific date or period. This information is used to calculate ratios providing the framework for different levels of tolerance and action plans. The main method for managing and assessing liquidity risk is based on the measurement of imminent liquidity needs comparing short-term outstanding liabilities with highly liquid assets. In this way, an adequate position is obtained in highly liquid assets, such as time deposits and government instruments. c) Measurement and Periodicity Liquidity hedging is projected over a quarterly period, considering the following quarters: January to March, April to June, July to September, and October to December. Additionally, there is a monthly review exercise proactively implemented by Management.
d) Liquidity Hedging (Definition and Scenarios) This is the quotient between the positive cash flow from financial investment activities and operating activities and projected cash disbursements from operating or sales activities within a 3-month period. 3.- Market Risk a) Risk Exposure and Origin Market Risk Definition The potential loss arising from factors directly affecting the value of an instrument, of portfolios, or of a firm, such as variations in interest rates, exchange rates, stock prices, etc. Given that a large portion of the investment portfolio (except for variable-income and trading assets) is comprised of instruments classified as “held-to-maturity”, no “mark-tomarket” is carried out on them, and therefore, market risk is not relevant, with credit risk being the main financial risk involved. VaR models are available for the portion of the portfolio that is marked to market. There is a complementary aspect of market risk, namely reinvestment risk. This risk component is especially relevant for insurance companies specializing in life annuities, due to the longterm nature of their liabilities and the need to reinvest the asset flow generated by investments over time. This risk is quantitatively controlled on a monthly basis through the assessment of hedging and the calculation of the AAR, the results of which, as of December 2012, are disclosed in Notes No. 13 and No. 25. i) Risk Management Objectives, Policy, and Processes To directly contribute to the mitigation of market risk associated to the portfolio through the establishment of guidelines that facilitate
AUDITED FINANCIAL STATEMENTS
97
decision-making and assign the corresponding responsibilities to the involved areas in case of this kind of risk. The associated activities and processes are implemented for this purpose.
98
ii) Guidelines Market risk has two relevant dimensions: - Asset sensitivity to market factor movements - Changes in asset sensitivity to a market factor Based on the above, market risk is estimated based on the volatility of asset prices and the Value-at-Risk (VaR) method. Additionally, Hedging and AAR are measured. The main method used by the Company to manage and assess market risk is the Value-atRisk tool, which is a market risk measure widely used in the financial world. This tool provides an estimate of the maximum expected loss for a given confidence level. This confidence level for the Company is defined at 95%. Depending on test results, the Company manages this risk mitigation through appropriate portfolio diversification. 4.- Derivative Product Use As stated in article 21, Decree Law DFL No. 251 of 1931, Insurance and Reinsurance Companies may, under NCG No. 200, perform transactions aimed at hedging both the financial risks that may affect their investment portfolio and their asset and liability structure and investment transactions aimed at increasing the profitability and diversification of the investment portfolio. a) Risk Management Objectives, Policy, and Processes i) Objectives To directly contribute to the mitigation of the financial derivative risk associated with the portfolio through the establishment of guidelines that facilitate decision-making and assign the corresponding responsibilities to the involved areas in case of this kind of risk.
AUDITED FINANCIAL STATEMENTS
Hedging Derivative Objectives: The objective of these derivatives is to hedge exchange rate, interest rate, stock, and inflation fluctuations concerning both a Company’s assets and liabilities or a given target asset, such as international bonds, shares, etc. The detail and type of Hedging Transactions based on derivatives are defined in the Company’s Derivative Policy. Investment Derivative Objectives: The purpose of the use of investment derivatives is to increase the profitability and diversification of the Company’s investment portfolio. By definition, all derivatives not designed for hedging are investment derivatives and are subject to the internal limits provided for in the Derivative Policy as well as regulatory limits. The detail and type of Investment Transactions based on derivatives are defined in the Company’s Derivative Policy. ii) Guidelines Financial derivative risk has several relevant dimensions. In accordance with NCG No. 200 and our existing Derivative Policy, there are two types of derivatives depending on their use: Hedging Derivatives and Investment Derivatives. The detail and types of Derivative Contracts used by the Company as well as by its counterparties are presented in Note No. 8 to the Financial Statements. iii) Measurement Measurement consists of taking each one of the Company’s outstanding contracts with its counterparties and recording the exchange or payment profile, considering the contract term, the involved currencies (exchange rate), and, more importantly, the counterparty. Measurement must be carried out on a monthly basis.
In addition, the contract market value is also recorded in order to assess counterparty risk in more detail. This activity is conducted on a quarterly basis. Finally, investment Derivatives are frequently monitored. One way of doing this is assessing their sensitivity to interest rate and/or exchange rate variations based on the DV01 concept, etc. The Value-at-Risk concept is also applied for these instruments. iv) Mitigation Factors The sum of investment transactions in financial derivative products carried out by the Company may not exceed the lowest amount resulting from the following limits: - Measured as a function of the value of the asset subject to the transactions: 20% of the Company’s Net Shareholders’ Equity. - Measured as a function of the transaction accounting value: 1% of the Company’s Technical Reserves and Risk Equity. Concerning guidelines, the Derivative Policy clearly defines the procedure for entering these into the investment and limit system. b) Definitions The risk from derivative use may be broken down into the following essential risks: i) Market Risk Market risk is related to the possibility of incurring losses as a consequence of variations in transaction values or in the positions maintained. The value of transactions mainly depends on the market price of underlying assets in each transaction, with prices in turn depending on the evolution of financial markets. The variation in derivative product values is mainly affected by the following kinds of market risks: Price risk: Variations in the prices of the
underlying asset may negatively affect the value of a financial instrument or a portfolio. Volatility risk: Sensitivity of portfolio value to changes in risk factor volatility. Correlation risk: This risk is linked to the existing relationship between risk factors. Liquidity risk: This occurs when, due to financial market conditions, it is not possible to unwind or close a risk position without impacting market price or transaction cost.” ii) Credit Risk Broadly speaking, credit risk is the loss potential whether from the transaction counterparty not meeting in an adequate time and proper manner the contractual obligations agreed upon in the transaction or from a non-compliance for country risk reasons. For financial derivative transactions, this risk is measured as the sum of the transaction or position replacement costs plus an estimate of the future potential risk due to market variations. Based on the way in which the non-compliance may occur, there are two kinds of risks: Counterparty non-compliance risk: This refers to the capacity or intention of the counterparty to meet its agreed upon financial obligations at any time during the life of the contract. Country risk: This refers to the sovereign risk assumed with States or entities guaranteed by States and the transfer risk incurred by a country’s foreign creditors due to an impairment in such country’s capacity to pay its debts or a lack of foreign currencies to perform payments. iii) Liquidity Risk Liquidity risk for derivative products is associated with two types of risks: Market liquidity risk: This occurs when, due to financial market conditions, it is not possible to unwind or close a risk position without impacting market price or the transaction cost.
AUDITED FINANCIAL STATEMENTS
99
100
Financing liquidity risk: This occurs in case of incapacity to obtain financing on the financial market due to a temporary mismatch of cash flows or unforeseen treasury or liquidity needs. iv) Operational and Juridical Risks This refers to the loss potential due to deficiencies or failures in internal processes, personnel, technology, or systems, or deriving from external circumstances. This kind of risks also includes risks of a juridical nature, the legal risk arising from deficiencies in transaction contracts, and regulatory deficiencies as a consequence of non-compliance with legal obligations. 1.- Credit Risk b) Concerning letter a), description of guarantees set up and other credit improvements: A part of the bond portfolio is subject to financial covenants limiting indebtedness, disinvestment, and ownership changes by issuers, among other safeguards. The mortgage credit portfolio is subject to a guarantee over the underlying immovable assets associated with each debt contract. As of December 2012, the debt to guarantee ratio for the Company’s mortgage loan note portfolio amounted to 62%. The real estate transactions in the portfolio are subject to guarantees such as: land, buildings, and performance bonds, among other safeguards. Within this context, the financial leasing business stock as of September 2012 displayed an outstanding balance to guarantees ratio equivalent to 70%. Total payments of consumer credits offered and outstanding as of the closing of the accounting period are directly discounted from our customers’ life annuity payments.
AUDITED FINANCIAL STATEMENTS
c) Credit quality of assets not in default or subject to value impairment, reporting at least the risk rating by type of instrument:
101
AUDITED FINANCIAL STATEMENTS
OPENING PER ASSET FAMILY AND RISK RATING NOT CONSIDERING IMPAIRED ASSETS Figures expressed as percentages of the total non-impaired local and international bond portfolio
Sin Clasificaci贸n
Porcentaje por Instrumento
0,3% 20,2%
B(cl)
7,4% 23,1%
BB(cl)
1,2%
BBB(cl)
13,4%
A(cl)
AA(cl)
102
Securities issued or guaranteed by the Government or the Chilean Central Bank Mortgage bonds, bonds, and other debt or credit securities issued by banks or financial institutions Bonds, promissory notes, and other debt or credit securities issued by public or private companies Interests in syndicated loans Mortgage loans notes Real estate financial leasing/General purpose leasing Total percentage per local rating
AAA(cl)
December 2012 Local Ratings Without Rating Percentage per Instrument
-
14,7%
-
-
-
-
7,3%
-
-
-
-
37,7%
-
-
-
34,4%
-
-
-
-
1,5%
13,6% 0,3%
-
-
-
-
-
-
-
-
3,5%
3,5%
-
-
-
-
-
-
8,2%
8,2%
-
-
11,7%
100,0%
21,1% 44,6%
1,5%
22,4% 0,3%
Amount UF 61.635.493
AUDITED FINANCIAL STATEMENTS
AA
A
BBB
BB
B
Sin Clasificaci贸n
Porcentaje por Instrumento
Foreign investments Fixed income Total percentage per international rating
AAA
International Ratings Without Rating Percentage per Instrument
-
-
7,7%
71,6%
20,4%
0,2%
-
100,0%
-
-
7,7%
71,6%
20,4%
0,2%
-
100,0%
Amount UF 9.318.135 Total balance of bonds and other securities representing debts as of December 2012, increasing to UF 71,007,024.
d) Book value of financial assets that would be in default or subject to impairment if their conditions had not been renegotiated. No assets in this condition are recorded. e)Seniority analysis by tier of financial assets in default, but not subject to impairment. The stock of mortgage loans and their default condition is presented below. In accordance with NCG No. 311, all credits are provisioned on a decreasing scale in proportion to the default period. No. of Monthly Installments Overdue Debt / 2012 Total Due Portfolio 1- 3 4-6 7- 9 10 - 12 13 - 24 >= 25 Total
8,9% 1,7% 0,6% 0,3% 0,6% 0,8%
Figures expressed as a percentage of the Mortgage Loan portfolio. Default estimated as outstanding balance at par value plus dividends in default. 0.06% of Mortgage Loans in the portfolio have effective payment plans with the Company.
12,9%
AUDITED FINANCIAL STATEMENTS
103
f) Analysis of financial assets individually determined as impaired, including the factors used to determine the impairment. In accordance with the procedures described in the “Impairment Policy”, each financial issue was individually profiled based on: the stability of the issuer’s economic sector and industry, the shareholder profile, management, credit access capacity, profitability and margins, cash flow, payment capacity. equity levels, and leverage. These variables were weighted averaged to obtain a grade or score similar to a credit risk rating scale that, under a certain threshold, determined the instrument or instruments subject to the Impairment Policy. On December 2012, assets subject to deterioration on an individual basis were as follows: Risk Score
Gross Investment
Impairment %
Net Exposure
Transa Securitización CDO Newport
Mnemonic
Issuer
104
BTRA1-B
3,2
11.338
31,45%
7.772
CDOA6A-$L
3,3
42.059
17,83%
34.560
Total Impairment UF
11.065
This asset impairment represents 0.02% of bonds and other securities representing debt as of December 2012.
Concerning bulk instrument evaluation, also defined in the policy, the mortgage, leasing, and consumer credit portfolio yielded the following results: Asset Family Mortgage Loan Notes Leasing Consumer Loans
Portfolio % Impairment 0,70% 0,07% 2,33%
Figures expressed as a percentage of the total portfolio for each family of assets. The total impairment of these three asset families represents 0.04% of bonds and other securities representing debt as of December 2012. Based on the current Impairment Policy, the write-offs to be applied to Consumer Credits shall be estimated based on the instructions issued by the SVS through NCG No. 208 (or any subsequent regulations replacing it). Likewise, for Mortgage Loans, an impairment consistent with the instructions issued by NCG No. 311 (or any subsequent regulations replacing it) is stipulated
AUDITED FINANCIAL STATEMENTS
2.- Liquidity Risk Instrument a) Analysis of Financial Liability CDO Newport Maturities Transa Securitización Financial liability maturities are detailed in Note No. 23 of the Financial Statements as of Total December 31, 2012. The Company’s monthly maturities are mainly Public Investment Fund influenced by the payment of life annuity CFICIMENT pensions, which are fairly stable in the short run, for which projections concerning them can be CFINRAICES readily made. CFIDESIN06 CFIMDI b) Description of how liquidity risk is managed CFISANTDI7 Liquidity is proactively managed through the Total projection of investment maturities, interest and capital payment receipts, prepayments, revenue from sale of Company products, etc., all these Private Investment Fund representing cash inflows. In turn, the same Fondos Kappa y Alpha exercise is carried out projecting cash outflows, CARVAJAL which mostly correspond to pension and benefit IVK payments and investments, in relation to which there is discretionality to adjust the required Total resources. As alternatives to manage potential temporary Overall total liquidity shortage situations, there is the possibility of resorting to credit lines with the financial system, sales transactions under repurchase agreement, or early settlement of liquid investments, which are a relevant part of the Company’s asset portfolio. c) Detail of Illiquid Financial Investments To define illiquid investments, the settlement term for each type of investment, the potential loss in value that the investment may undergo on account of early settlement, and finally, their relationship with the Company’s long-term business are taken into account. Based on the above, the following instruments
UF 34.560 7.772 42.332 UF 89.165 49.320 21.775 19.016 7.205 186.481 UF 1.232.062 3.116 2.651 1.237.828 1.466.641
AUDITED FINANCIAL STATEMENTS
105
d) Asset flow maturity profile
No. of months
Tier 1
Tier 2
Tier 3
1 -24
25 - 48
49 - 72
Months
Tier 4 73 - 96
24
24
24
18.213.094
10.775.507
10.829.595
End of Dic-12
106
t=1
3.- Market Risk Since the major part of the investment portfolio is invested in fixed-income and real estate assets valued at amortized cost, the Company does not face market risk in association with these assets. Accordingly, market risk from exposure to different currencies is also taken care of by the hedges associated with the different positions. It is important to state that all foreign positions are covered by a tactical decision, and therefore, market exposure and risk are marginal or zero. To estimate a sensitivity to market risk for the portfolio portion subject to this type of risk, basically corresponding to variable-income investments, the VaR for this portion of the portfolio was calculated. VaR measurement is an integral part of the Company’s Investment Policy, with calculation of this parameter being carried out on a periodical basis and being reported to the ALM Committee. The “Value-at-Risk (VaR)� is a measure quantifying the maximum potential loss in the value of a financial instrument portfolio, within a given time horizon and confidence level. In 1997,
AUDITED FINANCIAL STATEMENTS
11.963
the US Securities and Exchange Commission established that public corporations should disclose quantitative information concerning their derivative activities. Large banks and licensees opted for applying the standard including VaR information in the notes to their financial statements. Given the theoretical consistency and widespread global acceptance of the VaR, the Company estimates that it is an appropriate tool for market risk assessment and management. Below is an explanation of the VaR methodology used by the Company: parametric VaR: using history to estimate portfolio volatilities and correlations and assuming normal return conditions under a 95% confidence level and a 1-month holding period. After estimating volatilities and correlations, the following formula is applied. In turn, another risk measure is reinvestment risk, which was addressed through AAR estimation and the ICO hedging chart, whose results are disclosed in Notes No. 13 and No. 25 to the Financial Statements as of December 2012. The VaR is shown in the charts below.
Tier 5 97 - 120
Tier 6 121 - 156
Tier 7 157 - 192
Tier 8 193 - 252
Tier 9 253 -336
24
24
36
36
60
3.040
10.164.607
13.606.282
12.157.309
20.126.383
VAR = [Rp - ( z ) ( q )] Vp
Tier 10 337 - end 84 rest
7.905.531
15,931
Evaluation Date: 04-01-2013 Base Currency: CLP Horizon Date: 04-02-2013
Rp = Monthly expected return Vp = Portfolio value z = Significance level q = Monthly standard deviation
Net Equity (31 Dic 2012) 139.028.292.000 CLP
The VaR is presented in the charts below: CorpVida Evaluation Date: 04-01-2013 Base Currency: CLP Horizon Date: 04-02-2013 Total Market Value of included securities: 67.524.463.808 CLP
Probability of Loss 1%
Value At Risk
Equity %
3.673.204.702
2,64%
2% 5%
3.242.782.492 2.597.154.168
2,33% 1,87%
Probability of Value At Risk % of Total Loss Mkt Val 1% 3.673.204.702 5,44% 2% 3.242.782.492 4,80% 5%
2.597.154.168
3,85%
AUDITED FINANCIAL STATEMENTS
107
108
4.- Derivative Product Use - Subscription Policy I.- The derivative position exposed to - Reinsurance Policy counterparty risk is detailed in Note No. 8 to - Investment Policy the Financial Statements as of December 31, The Reserve Policy establishes the criteria and 2012. responsibilities in relation to the calculation of II.-The derivative position exposed to market risk technical reserves, considering compliance with is detailed below: the regulations issued by the Superintendency As of December 31. 2012, there are no of Securities and Insurance as well as the derivatives exposed to market risk. information requirements by Company’s Corporate Governance. II. INSURANCE RISKS 1.- Objectives, Policy, and Processes for The Company’s Fee Policy is based on the Insurance Risk Management principles of equivalence and equality, The Company has set as main objective for considering the competitive environment in insurance risk management the availability of which the insurance business is carried out. adequate resources to guarantee compliance Based on these principles, insurance premiums with the commitments established in insurance are calculated for them to be adequate to contracts. finance claims, operational expenses, and the To meet this objective, the Company has expected profitability, reflecting the risk assumed organized itself considering the following by the Company. functions: II.Technical Management: Reserve calculation, For its part, the Subscription Policy has been fee calculation, subscription guideline definition, designed to ensure appropriate risk rating in withholding limit and reinsurance agreement accordance with medical and non-medical determination, and actuarial analyses and factors, taking into account the level of projections. contracted capital. Subscription guidelines are Operational Management: Implementation of adapted to each type of business depending on subscription, policy issuance, premium collection, its characteristics and marketing method always contract maintenance, and claim and benefit applying the principles of objectivity and nonpayment processes. discrimination. Product Development Management: Detection of market needs, coordination of the adjustment The Company has a Reinsurance Policy defining process, and product development. risk and diversification requirements that must be met by reinsurance companies, in order to The Company has implemented the following minimize the liquidity risk associated with any policies which guide its actions and define potential non-compliance by the latter. the design of the processes associated with The Investment Policy has been described in the insurance risk management: first part of this Note. - Reserve Policy - Fee Policy Additionally, the Company maintains permanent
AUDITED FINANCIAL STATEMENTS
technical training objectives concerning the different Delivery Channels, in accordance with their characteristics, type of product, and target markets. 2.- Objectives, Policy, and Processes for Insurance Contract Market, Liquidity, and Credit Risk Management Within the insurance risk context, market, liquidity, and credit risks arise from the rights granted by policies to policy underwriters.
b) Pension Fund and Private Life Annuities Traditional Insurances This category comprises individual term life and health insurances, insurances with an investment account, and universal life insurances, including VPFS insurances, mass delivery insurance, and title insurances. a) Temporary Life Insurances Concerning the Company, such risks are mainly These pay a principal when the policyholder expressed in insurances with an investment dies. Some plans also involve the payment of account through the right to redemption of a survival capital. The term of these insurances Policy Values, which has an underlying Liquidity may range from 1 to 20 years, and the premium Risk, and investment options with a minimum payment may be a single one or a periodical guaranteed interest rate, which are subject to one. Depending on the product, additional Market Risk. accident, health, and disability coverages may be contracted. The Company has a specific policy and processes for the management of these risks, b) Temporary Health Insurances which have already been described in the first These mainly correspond to catastrophic part of this Note. individual insurances. These insurances are subject to annual renewal and pay a benefit Note No. 25.2.4 presents the hedge for the in the form of a single capital or reimbursement Fund Value Reserve per type of insurance. of medical expenses when these exceed a deductible amount and up to the specified 3.- Exposure to Insurance, Market, Liquidity, capital by product. and Credit Risk from insurance Contracts Concerning insurance contracts, the main risk c) Insurances with an Investment faced by the Company is that both the amount Account of claims and their timing differ with respect These are individual long-term insurances that to underlying expectations when pricing is pay the amount of the agreed benefit in case defined. Any changes that may occur in claim of policy holder-death. The contracting party to frequency, average claim cost, and the return on one of these policies may select the investment investments associated with contracts have an portfolio associated with the reserve fund impact on claim risk. generated by the premiums, opting between The insurances offered by the Company may be classified under the following groups: the investment alternatives that the Company makes available for this purpose. This fund, denominated Policy Value, may be redeemed a) Traditional Insurances by the contracting party on a partial or total basis at any time during the validity of the
AUDITED FINANCIAL STATEMENTS
109
policy, subject to the agreed charges. The total redemption of the Policy Value results in early policy termination. There is no guaranteed profitability on the Policy Value if the selected investment alternative is related to variableincome instruments; however, the Company has a fixed-income investment alternative with a minimum guaranteed profitability. There is no obligation to pay the premiums or the amount of the premiums. The necessary expenses to maintain policy validity are monthly discounted from the Policy Value.
110
single premium, they are irrevocable, and the policyholder pension is expressed as a constant amount in UF (Unidades de Fomento). Pension Fund Life Annuities may be hired with a guaranteed payment period over which the pension shall be provided regardless of the death of the policyholder or the loss of rights by beneficiaries.
These products do not consider interests in profits or redemption values beyond the cash payment for the guaranteed period, if applicable. d) Mass Delivery Insurances These correspond to annual Life and Health b) Private Life Annuities coverages granted to insured groups under a These operate in a way similar to pension fund collective policy. The Company maintains a life annuities, but provide increased flexibility residual portfolio of these products. in the determination of beneficiaries and the determination of surviving beneficiaries. In e) Title Insurances addition, private life annuities may be hired These are insurances associated with credits during temporary terms. issued by financial institutions which, in case of death of the policyholder, pay the outstanding The main insurance risks faced by the Company debt balance to the creditor. These insurances are as follows: may have an annual or bi-annual coverage a) Mortalidad The risk of loss due to a death such as insurances associated with mortgage rate different from expected. loans or coverage during the credit term in the b) Longevidad The risk of loss due to an case of consumer credits. increase in life expectations beyond predictions. c) Inversiones The risk of loss due to lower Life Annuities profitabilities than expected. a) Pension Fund Life Annuities d) Gastos The risk of loss due to an increase in Pension Fund Life Annuities comprise the expenses beyond predictions. payment of a pension to the policyholder until e) Persistencia The risk of loss due to his/her death and thereafter a percentage of deviations in redemptions and early termination the pension to surviving beneficiaries under of policies with respect to expectations. the conditions established by law. In case of In the case of policies with a main death policyholder death, the payment of a capital coverage, the main factors that may increase equivalent to UF 15 for funeral expense funding claim frequency are: epidemics, widespread is considered. changes in life styles, and natural disasters. These contracts are funded by means of a
AUDITED FINANCIAL STATEMENTS
In the case of life insurances with an investment account, the following risks are added to the risk of death: liquidity risk associated with redemptions and the risk related to the profitability of investments in insurances associated with an investment alternative with a guaranteed profitability rate. Concerning Life Annuities, the main risk factors associated with an increase in longevity are advances in medical science and the population’s social conditions. Also highly important for these insurances is investment market risk and the gap risk, which are completely assumed by the Company. The technical reserve by type of product is detailed in Note No. 25 and the charts attached to these Financial Statements. 4.- Insurance Risk Management Methodology To face these risks, the following mitigating activities have been identified: - Product Design - Subscription - Claim Analysis - Reinsurance The Company has defined requirements concerning insurability and subscription for all its traditional product lines, adapted to the characteristic of each product and the mode of distribution. Consequently, for all coverages offered by the Company, limits are established concerning the age of entry and policyholder permanency. Additionally, the subscription contemplates the evaluation of applicant’s medical, financial, and moral aspects. As a result of risk rating, the Company may accept the risk under normal conditions, accept it with
an overpremium or special conditions, or reject the requested coverage. In the case of Pension Fund Life Annuities, where marketing characteristics do not enable a detailed subscription on an individual basis, the pricing mechanism has been strengthened in order to consider in pension calculation the main risk factors determining longevity risk that may be considered in the insurance offering process. In the case of traditional insurances, the claim analysis carried out as part of the regular settlement process is oriented to ensuring compliance with agreed conditions for benefit payment and for proper determination of benefits, thus avoiding the payment of inadmissible or fraudulent claims. The result of these analyses is also applied to adjustment and new product creation processes. As for insurances with an investment account, where insured parties may select the policy investment mode and in addition have a right to redeem part or the total of the Policy Accumulated Value, the Company avoids gaps with respect to the assets backing up the policy, investing the Fund Value reserve in the different selected alternatives in accordance with their proportion of the total. The liquidity risk associated with redemption amounts is mitigated by means of charges associated with these transactions, when current regulations so permit, and by the offer of only highly liquid investment alternatives. Furthermore, the Company maintains proportional and non-proportional reinsurance contracts for all traditional products. In the case
AUDITED FINANCIAL STATEMENTS
111
of Life Annuities, the assignment of risks from new businesses is not considered. 5.- Insurance Concentration per Product and Delivery Channel The detailed premium per product is provided in the charts attached to these Financial Statements. The Company’s direct premium distribution per Delivery Channel is as follows: DIRECT PREMIUM AS OF DECEMBER 31, 2012 Product Internal External Channel Channel
112
Life Annuities Traditional Insurances Bank Insurance Title Insurances
84.24 % -
AUDITED FINANCIAL STATEMENTS
100.00% 15.76 % 100,00% 100,00%
6.- Sensitivity Analysis 6.1.- Methods and Hypotheses The Sensitivity Analysis is conducted by measuring the impact on shareholders’ equity from variation in each risk factor on a separate basis, assuming that all the variables are constant. The deviations used for each risk factor correspond to reasonably probable changes which, according to the Company and international experience, may have occurred during the reporting period. For the purpose of the sensitivity analysis, deviations in the considered Mortality and Longevity factors are assumed not to change future projections for these variables with respect to the parameters used in the calculation of technical reserves. Only negative deviations in risk factors are considered. As appropriate, the effects are evaluated based on the outstanding policy portfolio at the beginning of the period and the results are extrapolated to income for the year. The effect of correlations between risk factor movements is not considered. Therefore, partial results for each risk are not considered on an aggregate basis
Note should be taken that, due to the nature of the variables involved in the analysis, the impact from the factors is not linear. 6.2.- Changes in Methods and Hypotheses with Respect to the Previous Period The Sensitivity Analysis is presented for the first time in the Financial Statements as for December 31, 2012. 6.3.- Risk Factors The most relevant risk factors based on which the Sensitivity Analysis is carried out are as follows: Evaluation Assumptions RISK Projection Basis Longevity SVS Mortality Tables Mortality SVS Mortality Tables Expenses
Company Expenses
Persistence
Company Experience Variable-Income and Real Estate Value
Investments
VARIATION -5,0% qx + 5,0% qx + 5,0% Annual -10,00%
113
-5,00%
AUDITED FINANCIAL STATEMENTS
6.4.- Effects on Shareholders’ Equity The result of the Sensitivity Analysis on the Company’s Net Worth is as follows:
SENSITIVITY TEST RESULTS AS OF DECEMBER 31, 2012 Product Longevity Mortality Persistence Expenses Investments
114
Net Worth Variation (%) -0,23% -0,19% -0,05% -0,37% -3,58%
III. INTERNAL CONTROL AND RISK MANAGEMENT The Company has defined an internal control structure based on the relevant policies, regulations, and procedure manuals and/or handbooks aimed at strengthening the internal control culture throughout the organization, including all its stakeholders. Such structure enables the Company to monitor efficient and effective resource use, reinforcing its risk management system, and strengthening the degree of compliance with the legal and regulatory obligations established by all the relevant regulatory agencies related to the organization The effectiveness of the internal control system is supported by the Corporate Governance structure adopted by the Company, which is led by the Board of Directors with the assistance of Board Member Committees as well as Senior
AUDITED FINANCIAL STATEMENTS
Management and its respective Committees. This structure promotes Board of Directors involvement, thereby enabling detection of improvement opportunities associated with the commitments assumed towards the different interest groups. Additionally, the Company has a risk management system sustainable over time and applicable to the entire organization, thereby enabling identification, evaluation, treatment, control, monitoring, and communication of our risks to the different levels of the organization. In this way, the Company, and essentially its Corporate Governance, appropriately understand the risks to which the entity is exposed, including their genesis and interrelations, and potential impacts affecting the business. Concerning Compliance, the Company established such function with the purpose of ensuring that all legal and regulatory obligations are met, as well as internal regulations applicable to insurance companies, and specifically promoting an ethical corporate culture that safeguards the operation of the organization’s values, corporate image, and sound reputation. As regards External Auditing, its main function is to express an opinion concerning the reasonableness of the Financial Statements in all material respects, based on the performance of audits in accordance with current auditing standards, being also charged, as part of its relevant duties, of conducting an evaluation of the Company’s Internal Control structure. In order to verify the level of compliance with the organization’s objectives in terms of internal
control, the Company has established an Internal Audit function within the Comptroller’s Department which is independent from Management and directly reports to the Board of Directors on a periodical basis and through the Auditing Committee. For its part, Internal Auditing examines and evaluates both the relevance and the efficiency and effectiveness of the Company’s Internal Control Structure through the performance of audits to central units and branches in addition to special reviews as required, always within a framework of risk-based supervision and internal and external regulations, and providing objective opinions concerning the corresponding evaluation and review. Among its functions, it must also ensure that all relevant processes within the organization are audited with reasonable frequency and are consistent within an appropriate control environment. The organization is responsible for creating, implementing, and applying the relevant controls during the different relevant processes and sub-processes. For its part, Internal Auditing is responsible for ensuring appropriate internal control as a function of the size and level of complexity and vulnerability of the different business units.
AUDITED FINANCIAL STATEMENTS
115
NOTE 7. CASH AND CASH EQUIVALENTS
Figures in M$
Cash and Cash Equivalents Cash on hand Banks Cash equivalents Total Cash and Cash Equivalents
116
AUDITED FINANCIAL STATEMENTS
CLP USD EUR OTRA Total 980.840 980.840 1.073.392 640.038 1.713.430 4.249.610 4.249.610 6.943.880 6.303.842 640.038
NOTE8. FINANCIAL ASSETS AT FAIR VALUE NOTE 8.1.INVESTMENTS AT FAIR VALUE
117
AUDITED FINANCIAL STATEMENTS
NOTE8. FINANCIAL ASSETS AT FAIR VALUE NOTE 8.1. INVESTMENTS AT FAIR VALUE
AUDITED FINANCIAL STATEMENTS
Level 2
FOREIGN INVESTMENTS Fixed Income Securities issued by Foreign Governments and Central Banks Securities issued by Foreign Banks and Financial Institutions Securities issued by Foreign Companies Fixed Income Shares of Foreign Corporations Foreign investment fund installments
Level 1
118
DOMESTIC INVESTMENTS Fixed Income Government instruments Instruments issued by the financial system Debt or credit instruments Domestic company instruments traded abroad Mortgage loan notes Others Variable Income Shares of publicly traded companies Shares of closely held companies Investment funds Mutual funds Others
50.045.437 -
53.131.573
-
1.622.444 2.104.033
-
-
Effect on OCI (Other Compressive Income)
-
1.073.989 3.225.922
Effect on results
2.644.648
Amortized cost
Total
Level 3 1.073.989 3.225.922 -
-
119
50.045.437 2.644.648 53.131.573 -
50.045.437 2.644.648 53.131.573
2.001.722 1.037.001
2.000.072 965.011
1.622.444 2.104.033
1.622.444 2.104.033
1.650 71.990 -
AUDITED FINANCIAL STATEMENTS
2.366.359 21.237 -
DERIVATIVES Hedging derivatives Investment derivatives Others
47.862 63.546.006
TOTAL
NOTE 8.2. HEDGING AND INVESTMENT DERIVATIVES NOTE 8.2.1. DERIVATIVE USE STRATEGY
120
Level 2
Level 1
Installments of investment funds set up in the country with assets invested abroad Foreign mutual fund installments Installments of mutual funds set up in the country with assets invested in foreign securities Others
53.131.573
The main purpose of the derivative product use policy is the use of derivative products aimed at hedging financial risks as well as conduct investment transactions enabling the Company to increase its profitability and diversify its investment portfolio.
NOTE 8.2.2. POSITION IN DERIVATIVE CONTRACTS Hedging Derivatives
Investment M$ Other derivatives
Type of instrument Hedging M$ Forward Purchase Sale Options Purchase Sale Swaps TOTAL
AUDITED FINANCIAL STATEMENTS
Hedging 1512 M$
(87.097) 134.959
47.862
0 -
10.114.462 10.114.462
0
-
Number of co
2.366.359
-
21.237
21.237
-
-
-
-
-
-
Effect on OCI (Other Compressive Income)
Amortized cost
Effect on results
Total
Level 3
2.366.359
47.862
2.644.648
-
119.322.227
47.862 119.200.725
121.502
-
Likewise, the financial risk policy is aimed at maintaining associated risks (market, liquidity, reinvestment, credit, and operating risks) within predetermined limits.
ontracts
Effect on Income for the Period M$
2 11
(12.252) -28.938
137 150
-394.352 -435.542
Effect on OCI M$
-
121
Asset amounts at Margin (1) M$
-
AUDITED FINANCIAL STATEMENTS
NOTE 8.2.3. POSITION IN DERIVATIVE CONTRACTS (FUTURES)
* As of December 31, 2012, the Company has no positions in Futures Derivative Contracts.
NOTE 8.2.4. SHORT-SELLING TRANSACTIONS
* As of December 31, 2012, the Company has no Short-Selling Transactions.
NOTE 8.2.5. OPTIONS CONTRACTS
* As of December 31, 2012, the Company has no Options Contracts.
NOTE 8.2.6. FORWARD CONTRACTS
Contract Objetive
Type Of Transaction
Item Transaction
Transaction Counterparty
1555 1840
1 1
Goldman Sachs Estados Unidos ABanco De Chile Chile AAA
Nominal
Target Asset
Risk Rating
122
Transaction Characteristics Nationality
Name
Transaction operaci贸n
PURCHASE Hedging UF PROM
200.000 2.000.000
Hedging 1512 Investment
TOTAL
SALE
AUDITED FINANCIAL STATEMENTS
2.200.000
$$ $$
Origin Of Information
Fair Value Of Frw Contract As Of Rep. Date M$ Flow Discount Rate
Forward Price Quoted In M째 As Of Rep. Date Spot Price As Of Reporting Date Market Value Of Target Asset As Of Rep. Date M$
Contract Expiry Date
AUDITED FINANCIAL STATEMENTS
123 Date Transaction
Forward Price
Currency
(87.097) 5.528.070
BLOOMBERG BLOOMBERG (94.872) 7.775 -156,82% 14,00% 22.840,75 0,48 1,00 1,00 4.568.150 959.920 11-04-2012 08-03-2013 20-12-2012 04-01-2013 23.248,00 476,08 $ $
Valuation Reporting
Hedging
124
1005
1
1006
1
1718
1
1727
1
1730
1
1827
1
1828
1
1829
1
1837
1
1843
1
1844
1
BANCO BBVA CHILE BANCO BBVA CHILE HSBC BANK CHILE BANCO DE CHILE BANCO BBVA CHILE MORGAN STANLEY Credit Suisse First Boston Credit Suisse First Boston BANCO SANTANDER JPMORGAN CHASE BANK N.A BANCO SANTANDER
Chile
AA+
UF
65.358 PR
Chile
AA+
UF
65.184 PR
Chile
AAA
$$
1.469.910.000 PR
Chile
AAA
$$
1.469.400.000 PR
Chile
AA+
$$
978.800.000 PR
Estados Unidos A-
$$
953.500.000 PR
Estados Unidos A
$$
1.669.675.000 PR
Estados Unidos A
$$
1.430.400.000 PR
Chile
AAA
$$
1.190.500.000 PR
Chile
AAA
$$
1.199.475.000 PR
Chile
AAA
$$
963.600.000 PR
Investment TOTAL
NOTE 8.2.7. FUTURES CONTRACTS
* As of December 31, 2012, the Company has no Futures Contracts.
AUDITED FINANCIAL STATEMENTS
11.325.390.542
ROM
0,02 18-05-2011 10-06-2013
1.439.880 479,96
0,88
64,00%
48.690
BLOOMBERG
ROM
0,02 19-05-2011 10-06-2013
1.439.880 479,96
0,88
64,00%
44.717
BLOOMBERG
ROM
489,97 27-08-2012 03-01-2013
1.439.880 479,96
0,48
21,00%
30.004
BLOOMBERG
ROM
489,80 03-09-2012 08-01-2013
1.439.880 479,96
0,48
53,00%
29.347
BLOOMBERG
ROM
489,40 04-09-2012 04-01-2013
959.920 479,96
0,48
14,00%
18.865
BLOOMBERG
ROM
476,75 12-12-2012 14-01-2013
959.920 479,96
0,48
73,00%
(6.691)
BLOOMBERG
ROM
477,05 13-12-2012 17-01-2013
1.679.860 479,96
0,48
107,00%
(11.028)
BLOOMBERG
ROM
476,80 12-12-2012 14-01-2013
1.439.880 479,96
0,48
73,00%
(9.886)
BLOOMBERG
ROM
476,20 18-12-2012 04-01-2013
1.199.900 479,96
0,48
28,00%
(9.437)
BLOOMBERG
ROM
479,79 27-12-2012 25-01-2013
1.199.900 479,96
0,48
166,00%
(1.806)
BLOOMBERG
ROM
481,80 27-12-2012 29-01-2013
959.920 479,96
0,48
193,00%
2.184
BLOOMBERG
14.158.820
134.959
AUDITED FINANCIAL STATEMENTS
125
NOTE 8.2.8. SWAP CONTRACTS
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty
Transaction Characteristics Tipo Cambio Contrato
Currency Short Position
Currency Long Position
Nominal Short Position
Nominal Long Position
Risk Rating
Nationality
Name
HEDGING
126
142
1 Credit Suisse First Boston
Inglaterra A
59.217,00
2.000.000,00 UF
AVE
530,80
5
427
1 Banco Santander
Chile
58.693,00
2.200.000,00 UF
AVE
560,40
4
428
1 Credit Suisse First Boston
Inglaterra A
107.586,00
4.000.000,00 UF
AVE
564,65
4
506
1 Deutsche Bank London
Inglaterra A
26.298,00
1.000.000,00 UF
AVE
549,00
505
1 Deutsche Bank London
Inglaterra A
26.298,00
1.000.000,00 UF
AVE
549,00
504
1 Deutsche Bank London
Inglaterra A
52.596,00
2.000.000,00 UF
AVE
549,00
527
1 Banco Santander
Chile
AAA
102.601,00
4.000.000,00 UF
AVE
536,00
528
1 Banco Santander
Chile
AAA
25.650,00
1.000.000,00 UF
AVE
536,00
538
1 Deutsche Bank London
Inglaterra A
12.662,00
500.000,00 UF
AVE
530,20
5
694
1 Banco BBVA Chile
Chile
AA-
25.804,00
1.000.000,00 UF
AVE
544,25
4
695
1 Banco BBVA Chile
Chile
AA-
12.902,00
500.000,00 UF
AVE
544,25
5
696
1 Credit Suisse First Boston
Inglaterra A
76.367,00
3.000.000,00 UF
AVE
537,00
712
1 Deutsche Bank London
Inglaterra A
125.279,00
5.000.000,00 UF
AVE
530,32
4
713
1 Deutsche Bank London
Inglaterra A
12.528,00
500.000,00 UF
AVE
530,32
4
714
1 Deutsche Bank London
Inglaterra A
25.056,00
1.000.000,00 UF
AVE
530,32
4
731
1 Goldman Sachs
Estados Unidos
A-
50.405,00
2.000.000,00 UF
AVE
534,99
5
732
1 Goldman Sachs
Estados Unidos
A-
12.601,00
500.000,00 UF
AVE
534,99
5
AUDITED FINANCIAL STATEMENTS
AAA
Valuation Reporting Transaction Date
Contract Expiry Date
Market Value Of Target Asset As Of Rep. Date M$
Market Exchange Rate
Market Rate Long Position
Market Rate Short Position
PRESENT VALUE LONG POSITION M$
Present Value Short Position M$
Information Origin
Tasa Posicion Corta
Fair Value Of Swap Contract As Of Rep. Date M$
Tasa Posicion Larga
5.65%
7.375%
09-03-2006
15-12-2014
959.920
479,96
5.65%
7.375%
1.355.857
963.473
392.384 BLOOMBERG
4.15%
6.375%
19-05-2009
09-06-2017
1.055.912
479,96
4.15%
6.375%
1.343.020
1.060.244
282.776 BLOOMBERG
4.78%
7.846%
28-05-2009
01-04-2019
1.919.840
479,96
4.78%
7.846%
2.484.917
1.960.540
524.377 BLOOMBERG
6.6%
9.5%
15-09-2009
23-04-2019
479.960
479,96
6.6%
9.5%
608.460
490.288
118.172 BLOOMBERG
6.6%
9.5%
15-09-2009
23-04-2019
479.960
479,96
6.6%
9.5%
608.460
490.288
118.172 BLOOMBERG
6.6%
9.5%
15-09-2009
23-04-2019
959.920
479,96
6.6%
9.5%
1.216.918
980.576
236.342 BLOOMBERG
4.9%
7.25%
22-10-2009
29-07-2019
1.919.840
479,96
4.9%
7.25%
2.390.594
1.980.964
409.630 BLOOMBERG
4.9%
7.25%
22-10-2009
29-07-2019
479.960
479,96
4.9%
7.25%
597.648
495.241
102.407 BLOOMBERG
5.47%
7.625%
28-10-2009
23-07-2019
239.980
479,96
5.47%
7.625%
296.079
248.396
47.683 BLOOMBERG
4.78%
6.75%
25-05-2010
30-09-2019
479.960
479,96
4.78%
6.75%
596.103
488.523
107.580 BLOOMBERG
5.45%
7.25%
25-05-2010
30-09-2019
239.980
479,96
5.45%
7.25%
298.051
244.261
53.790 BLOOMBERG
4.2%
6.2%
26-05-2010
15-04-2020
1.439.880
479,96
4.2%
6.2%
1.757.765
1.458.880
298.885 BLOOMBERG
4.18%
6.2%
17-06-2010
15-04-2020
2.399.800
479,96
4.18%
6.2%
2.883.429
2.431.466
451.963 BLOOMBERG
4.18%
6.2%
17-06-2010
15-04-2020
239.980
479,96
4.18%
6.2%
288.343
243.147
45.196 BLOOMBERG
4.18%
6.2%
17-06-2010
15-04-2020
479.960
479,96
4.18%
6.2%
576.686
486.293
90.393 BLOOMBERG
5.01%
7%
13-07-2010
20-01-2020
959.920
479,96
5.01%
7%
1.176.261
990.802
185.459 BLOOMBERG
5.01%
7%
13-07-2010
20-01-2020
239.980
479,96
5.01%
7%
294.065
247.700
46.365 BLOOMBERG
AUDITED FINANCIAL STATEMENTS
127
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty
Transaction Characteristics Tipo Cambio Contrato
Currency Short Position
Currency Long Position
Nominal Short Position
Nominal Long Position
Risk Rating
Nationality
Name
HEDGING
128
740
1 Deutsche Bank London
Inglaterra A
48.852,00
2.000.000,00 UF
AVE
518,50
741
1 Goldman Sachs
Estados Unidos
A-
74.055,00
3.000.000,00 UF
AVE
524,00
746
1 Deutsche Bank London
Inglaterra A
49.012,00
2.000.000,00 UF
AVE
520,20
5
747
1 Deutsche Bank London
Inglaterra A
49.012,00
2.000.000,00 UF
AVE
520,20
5
766
1 Credit Suisse First Boston
Inglaterra A
96.573,00
4.000.000,00 UF
AVE
512,60
4
756
1 Goldman Sachs
Estados Unidos
A-
96.978,00
4.000.000,00 UF
AVE
514,85
863
1 Hsbc Bank Chile
Chile
AAA
44.603,00
2.000.000,00 UF
AVE
477,88
4
864
1 Deutsche Bank London
Inglaterra A
33.738,00
1.500.000,00 UF
AVE
482,00
5
867
1 J.p Morgan & Co.
Estados Unidos
A
45.440,00
2.000.000,00 UF
AVE
486,97
6
866
1 J.p Morgan & Co.
Estados Unidos
A
45.440,00
2.000.000,00 UF
AVE
486,97
4
894
1 Banco De Chile
Chile
AAA
92.636,00
4.000.000,00 UF
AVE
497,00
898
1 Hsbc Bank Usa N.a.
Estados Unidos
A+
46.497,00
2.000.000,00 UF
AVE
498,97
4
897
1 Hsbc Bank Usa N.a.
Estados Unidos
A+
23.248,00
1.000.000,00 UF
AVE
498,97
4
913
1 J.p Morgan & Co.
Estados Unidos
A
22.824,00
1.000.000,00 UF
AVE
489,89
3
915
1 Hsbc Bank Usa N.a.
Estados Unidos
A+
68.415,00
3.000.000,00 UF
AVE
489,50
4
914
1 J.p Morgan & Co.
Estados Unidos
A
11.379,00
500.000,00 UF
AVE
488,49
3
924
1 Banco BBVA Chile
Chile
AA-
80.276,00
3.500.000,00 UF
AVE
492,44
4
929
1 Banco BBVA Chile
Chile
AA-
55.930,00
2.500.000,00 UF
AVE
480,50
4
942
1 Banco BBVA Chile
Chile
AA-
65.388,00
3.000.000,00 UF
AVE
468,70
4
AUDITED FINANCIAL STATEMENTS
5
Valuation Reporting Transaction Date
Contract Expiry Date
Market Value Of Target Asset As Of Rep. Date M$
Market Exchange Rate
Market Rate Long Position
Market Rate Short Position
PRESENT VALUE LONG POSITION M$
Present Value Short Position M$
Information Origin
Tasa Posicion Corta
Fair Value Of Swap Contract As Of Rep. Date M$
Tasa Posicion Larga
5.26%
7.25%
22-07-2010
22-04-2020
959.920
479,96
5.26%
7.25%
1.126.413
974.336
152.077 BLOOMBERG
5.2%
7.25%
28-07-2010
22-04-2020
1.439.880
479,96
5.2%
7.25%
1.707.291
1.461.503
245.788 BLOOMBERG
5.35%
7.25%
02-08-2010
22-04-2020
959.920
479,96
5.35%
7.25%
1.130.366
974.336
156.030 BLOOMBERG
5.35%
7.25%
02-08-2010
22-04-2020
959.920
479,96
5.35%
7.25%
1.130.366
974.336
156.030 BLOOMBERG
4.29%
5.9%
10-08-2010
19-01-2021
1.919.840
479,96
4.29%
5.9%
2.245.300
1.971.387
273.913 BLOOMBERG
4.19%
5.9%
11-08-2010
19-01-2021
1.919.840
479,96
4.19%
5.9%
2.255.830
1.971.387
284.443 BLOOMBERG
4.61%
5.75%
22-11-2010
22-01-2021
959.920
479,96
4.61%
5.75%
1.038.394
983.996
54.398 BLOOMBERG
5.88%
6.75%
24-11-2010
30-09-2019
719.940
479,96
5.88%
6.75%
782.097
732.784
49.313 BLOOMBERG
6.12%
7%
29-11-2010
20-01-2020
959.920
479,96
6.12%
7%
1.066.374
990.802
75.572 BLOOMBERG
4.72%
5.75%
29-11-2010
01-02-2021
959.920
479,96
4.72%
5.75%
1.057.375
982.774
74.601 BLOOMBERG
5.9%
4.3%
07-01-2011
19-01-2021
1.919.840
479,96
5.9%
4.3%
2.154.926
1.971.387
183.539 BLOOMBERG
4.05%
5.625%
10-01-2011
15-01-2021
959.920
479,96
4.05%
5.625%
1.080.415
984.416
95.999 BLOOMBERG
4.05%
5.625%
10-01-2011
15-01-2021
479.960
479,96
4.05%
5.625%
540.208
492.208
48.000 BLOOMBERG
3.91%
5.5%
12-01-2011
15-01-2021
479.960
479,96
3.91%
5.5%
530.217
492.208
38.009 BLOOMBERG
4.04%
5.625%
13-01-2011
20-01-2021
1.439.880
479,96
4.04%
5.625%
1.587.557
1.474.557
113.000 BLOOMBERG
3.88%
5.5%
13-01-2011
20-01-2021
239.980
479,96
3.88%
5.5%
264.085
245.759
18.326 BLOOMBERG
4.57%
5.75%
21-01-2011
22-01-2021
1.679.860
479,96
4.57%
5.75%
1.868.522
1.721.992
146.530 BLOOMBERG
4.39%
5.625%
01-02-2011
15-01-2021
1.199.900
479,96
4.39%
5.625%
1.301.803
1.230.520
71.283 BLOOMBERG
4.47%
6%
18-02-2011
21-01-2020
1.439.880
479,96
4.47%
6%
1.521.707
1.478.238
43.469 BLOOMBERG
AUDITED FINANCIAL STATEMENTS
129
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty
Transaction Characteristics Tipo Cambio Contrato
Currency Short Position
Currency Long Position
Nominal Short Position
Nominal Long Position
Risk Rating
Nationality
Name
HEDGING
130
948
1
Banco BBVA Chile
Chile
AA-
11.039,00
500.000,00 UF
AVE
475,10
4
971
1
Banco De Chile
Chile
AAA
19.803,00
883.300,00 UF
AVE
483,30
5
1015
1
Banco Bbva Chile
Chile
AA-
107.996,00
5.000.000,00 UF
AVE
470,80
4
1016
1
J.p Morgan & Co.
Estados Unidos
A
86.053,00
4.000.000,00 UF
AVE
469,20
4
1017
1
J.p Morgan & Co.
Estados Unidos
A
32.270,00
1.500.000,00 UF
AVE
469,20
4
1024
1
Banco Santander
Chile
AAA
64.264,00
2.977.330,00 UF
AVE
471,60
4
1031
1
Banco BBVA Chile
Chile
AA-
63.917,00
3.000.000,00 UF
AVE
467,00
5
1034
1
Banco BBVA Chile
Chile
AA-
63.403,00
3.000.000,00 UF
AVE
463,30
10
1036
1
J.p Morgan & Co.
Estados Unidos
A
21.095,00
1.000.000,00 UF
AVE
462,50
4
1045
1
Banco BBVA Chile
Chile
AA-
21.084,00
1.000.000,00 UF
AVE
462,55
10
1046
1
Banco BBVA Chile
Chile
AA-
21.084,00
1.000.000,00 UF
AVE
462,55
10
1061
1
Credit Suisse First Boston
Inglaterra A
86.772,00
4.050.000,00 UF
AVE
470,52
4
1060
1
Hsbc Bank Usa N.a.
Estados Unidos
A+
42.892,00
2.000.000,00 UF
AVE
471,00
4
1070
1
Banco BBVA Chile
Chile
AA-
74.973,00
3.520.000,00 UF
AVE
467,85
1071
1
Banco De Chile
Chile
AAA
42.603,00
2.000.000,00 UF
AVE
467,90
4
1075
1
Banco Santander
Chile
AAA
42.740,00
2.000.000,00 UF
AVE
469,44
4
1076
1
Banco Santander
Chile
AAA
25.680,00
1.200.000,00 UF
AVE
470,10
7
1079
1
Barclays Bank Plc
Estados Unidos
A-
21.300,00
1.000.000,00 UF
AVE
468,00
1083
1
Banco BBVA Chile
Chile
AA-
42.295,00
2.000.000,00 UF
AVE
464,70
1084
1
J.p Morgan & Co.
Estados Unidos
A
19.034,00
900.000,00 UF
AVE
464,75
AUDITED FINANCIAL STATEMENTS
7
6
Valuation Reporting Transaction Date
Contract Expiry Date
Market Value Of Target Asset As Of Rep. Date M$
Market Exchange Rate
Market Rate Long Position
Market Rate Short Position
PRESENT VALUE LONG POSITION M$
Present Value Short Position M$
Information Origin
Tasa Posicion Corta
Fair Value Of Swap Contract As Of Rep. Date M$
Tasa Posicion Larga
4.54%
6%
25-02-2011
21-01-2020
239.980
479,96
4.54%
6%
256.976
246.373
10.603 BLOOMBERG
5.99%
7.373%
16-03-2011
16-06-2022
423.949
479,96
5.99%
7.373%
453.724
425.771
27.953 BLOOMBERG
4.25%
5.95%
25-05-2011
03-06-2021
2.399.800
479,96
4.25%
5.95%
2.471.765
2.410.717
61.048 BLOOMBERG
4.11%
5.7%
26-05-2011
18-05-2021
1.919.840
479,96
4.11%
5.7%
1.972.714
1.932.485
40.229 BLOOMBERG
4.11%
5.7%
26-05-2011
18-05-2021
719.940
479,96
4.11%
5.7%
739.770
724.682
15.088 BLOOMBERG
4.44%
6.223%
16-06-2011
15-12-2026
1.428.999
479,96
4.44%
6.223%
1.468.981
1.433.279
35.702 BLOOMBERG
5.35%
5.25%
11-07-2011
11-02-2016
1.439.880
479,96
5.35%
5.25%
1.489.725
1.468.678
21.047 BLOOMBERG
0.14%
9.5%
13-07-2011
15-08-2014
1.439.880
479,96
10.14%
9.5%
1.505.499
1.493.029
12.470 BLOOMBERG
4.44%
5.95%
13-07-2011
03-06-2021
479.960
479,96
4.44%
5.95%
482.932
482.143
789 BLOOMBERG
0.07%
9.5%
25-07-2011
15-08-2014
479.960
479,96
10.07%
9.5%
500.492
497.676
2.816 BLOOMBERG
0.07%
9.5%
25-07-2011
15-08-2014
479.960
479,96
10.07%
9.5%
500.492
497.676
2.816 BLOOMBERG
4.38%
4.25%
11-08-2011
18-05-2021
1.943.838
479,96
4.38%
4.25%
1.990.075
1.956.641
33.434 BLOOMBERG
4.38%
5.7%
12-08-2011
14-01-2016
959.920
479,96
4.38%
5.7%
999.105
978.347
20.758 BLOOMBERG
7.9%
8.75%
17-08-2011
06-11-2019
1.689.459
479,96
7.9%
8.75%
1.735.995
1.716.551
19.444 BLOOMBERG
4.55%
5.7%
19-08-2011
03-06-2021
959.920
479,96
4.55%
5.7%
977.369
966.243
11.126 BLOOMBERG
4.88%
5.95%
19-08-2011
03-06-2021
959.920
479,96
4.88%
5.95%
979.047
964.287
14.760 BLOOMBERG
7.93%
8.75%
19-08-2011
06-11-2019
575.952
479,96
7.93%
8.75%
594.671
585.188
9.483 BLOOMBERG
4.8%
5.95%
26-08-2011
03-06-2021
479.960
479,96
4.8%
5.95%
487.857
482.143
5.714 BLOOMBERG
7.11%
7.25%
29-08-2011
20-10-2017
959.920
479,96
7.11%
7.25%
980.227
974.366
5.861 BLOOMBERG
6.33%
6.375%
31-08-2011
18-11-2020
431.964
479,96
6.33%
6.375%
436.504
434.576
1.928 BLOOMBERG
AUDITED FINANCIAL STATEMENTS
131
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty
Transaction Characteristics Tipo Cambio Contrato
Currency Short Position
Currency Long Position
Nominal Short Position
Nominal Long Position
Risk Rating
Nationality
Name
HEDGING
132
1086
1
J.p Morgan & Co.
Estados Unidos
A
42.297,00
2.000.000,00 UF
AVE
464,75
4
1087
1
J.p Morgan & Co.
Estados Unidos
A
35.783,00
1.692.000,00 UF
AVE
464,75
4
1092
1
Deutsche Bank London
Inglaterra A
42.183,00
2.000.000,00 UF
AVE
463,50
7
1096
1
Barclays Bank Plc
Estados Unidos
A-
20.954,00
1.000.000,00 UF
AVE
460,50
4
1109
1
Hsbc Bank Usa N.a.
Estados Unidos
A+
31.630,00
1.500.000,00 UF
AVE
463,51
4
1106
1
Banco Santander
Chile
AAA
21.045,00
1.000.000,00 UF
AVE
462,60
1105
1
Barclays Bank Plc
Estados Unidos
A-
63.632,00
3.000.000,00 UF
AVE
466,25
8
1107
1
Barclays Bank Plc
Estados Unidos
A-
54.064,00
2.500.000,00 UF
AVE
475,50
4
1120
1
Banco Santander
Chile
AAA
66.824,00
3.000.000,00 UF
AVE
490,00
1121
1
Barclays Bank Plc
Estados Unidos
A-
11.364,00
500.000,00 UF
AVE
500,00
5
1126
1
J.p Morgan & Co.
Estados Unidos
A
45.722,00
2.000.000,00 UF
AVE
503,13
4
1127
1
J.p Morgan & Co.
Estados Unidos
A
57.153,00
2.500.000,00 UF
AVE
503,14
4
1141
1
Barclays Bank Plc
Estados Unidos
A-
95.050,00
4.100.000,00 UF
AVE
510,25
4
1142
1
Hsbc Bank Usa N.a.
Estados Unidos
A+
63.282,00
2.730.000,00 UF
AVE
510,19
1143
1
Hsbc Bank Usa N.a.
Estados Unidos
A+
46.361,00
2.000.000,00 UF
AVE
510,19
1144
1
Barclays Bank Plc
Estados Unidos
A-
23.458,00
1.000.000,00 UF
AVE
516,30
1145
1
Barclays Bank Plc
Estados Unidos
A-
115.188,00
5.000.000,00 UF
AVE
507,05
1146
1
Barclays Bank Plc
Estados Unidos
A-
46.916,00
2.000.000,00 UF
AVE
516,30
4
1180
1
Deutsche Bank London
Inglaterra A
70.150,00
3.043.000,00 UF
AVE
508,50
7
1181
1
Deutsche Bank London
Inglaterra A
34.580,00
1.500.000,00 UF
AVE
508,50
4
AUDITED FINANCIAL STATEMENTS
4
Valuation Reporting Transaction Date
Contract Expiry Date
Market Value Of Target Asset As Of Rep. Date M$
Market Exchange Rate
Market Rate Long Position
Market Rate Short Position
PRESENT VALUE LONG POSITION M$
Present Value Short Position M$
Information Origin
Tasa Posicion Corta
Fair Value Of Swap Contract As Of Rep. Date M$
Tasa Posicion Larga
4.39%
5.5%
31-08-2011
09-06-2017
959.920
479,96
4.39%
5.5%
970.008
963.859
6.149 BLOOMBERG
4.39%
5.5%
31-08-2011
09-06-2017
812.092
479,96
4.39%
5.5%
820.626
815.425
5.201 BLOOMBERG
7.96%
8.75%
31-08-2011
06-11-2019
959.920
479,96
7.96%
8.75%
976.900
975.313
1.587 BLOOMBERG
4.48%
5.5%
02-09-2011
18-11-2020
479.960
479,96
4.48%
5.5%
480.609
482.862
(2.253) BLOOMBERG
4.91%
5.95%
08-09-2011
16-09-2020
719.940
479,96
4.91%
5.95%
730.878
730.786
92 BLOOMBERG
4.4%
5.375%
08-09-2011
30-03-2015
479.960
479,96
4.4%
5.375%
491.672
490.106
1.566 BLOOMBERG
8.57%
8%
09-09-2011
16-09-2020
1.439.880
479,96
8.57%
8%
1.470.937
1.461.571
9.366 BLOOMBERG
4.52%
5.375%
13-09-2011
03-06-2021
1.199.900
479,96
4.52%
5.375%
1.238.471
1.205.359
33.112 BLOOMBERG
5%
4.5%
20-09-2011
06-04-2015
1.439.880
479,96
5%
4.5%
1.544.004
1.454.744
89.260 BLOOMBERG
5.15%
5.95%
21-09-2011
03-06-2021
239.980
479,96
5.15%
5.95%
260.405
241.072
19.333 BLOOMBERG
4.29%
5.25%
27-09-2011
16-08-2021
959.920
479,96
4.29%
5.25%
1.059.909
978.284
81.625 BLOOMBERG
4.29%
5.25%
27-09-2011
16-08-2021
1.199.900
479,96
4.29%
5.25%
1.324.898
1.222.855
102.043 BLOOMBERG
4.41%
5.375%
28-09-2011
16-09-2020
1.967.836
479,96
4.41%
5.375%
2.196.400
1.997.481
198.919 BLOOMBERG
4.5%
5.5%
28-09-2011
18-11-2020
1.310.291
479,96
4.5%
5.5%
1.451.537
1.318.214
133.323 BLOOMBERG
4.5%
5.5%
28-09-2011
18-11-2020
959.920
479,96
4.5%
5.5%
1.063.397
965.725
97.672 BLOOMBERG
4.44%
5.375%
28-09-2011
16-09-2020
479.960
479,96
4.44%
5.375%
542.113
487.190
54.923 BLOOMBERG
4.5%
5.375%
28-09-2011
16-09-2020
2.399.800
479,96
4.5%
5.375%
2.662.539
2.435.952
226.587 BLOOMBERG
4.55%
5.5%
28-09-2011
18-11-2020
959.920
479,96
4.55%
5.5%
1.076.214
965.725
110.489 BLOOMBERG
7.72%
8.75%
18-10-2011
06-11-2019
1.460.518
479,96
7.72%
8.75%
1.623.574
1.483.938
139.636 BLOOMBERG
4.31%
5.5%
18-10-2011
18-11-2020
719.940
479,96
4.31%
5.5%
792.919
724.294
68.625 BLOOMBERG
AUDITED FINANCIAL STATEMENTS
133
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty
Transaction Characteristics Tipo Cambio Contrato
Currency Short Position
Currency Long Position
Nominal Short Position
Nominal Long Position
Risk Rating
Nationality
Name
HEDGING
134
1185
1
Morgan Stanley
Estados Unidos
BBB+
90.706,00
4.000.000,00 UF
AVE
501,00
6
1187
1
Morgan Stanley
Estados Unidos
BBB+
45.353,00
2.000.000,00 UF
AVE
500,84
4
1182
1
Deutsche Bank London
Inglaterra A
22.697,00
1.000.000,00 UF
AVE
501,30
5
1248
1
Morgan Stanley
Estados Unidos
BBB+
89.438,00
4.000.000,00 UF
AVE
495,00
1249
1
Morgan Stanley
Estados Unidos
BBB+
67.079,00
3.000.000,00 UF
AVE
495,00
1246
1
Banco Bbva Chile
Chile
AA-
56.453,00
2.500.000,00 UF
AVE
499,70
5
1247
1
Banco Bbva Chile
Chile
AA-
112.907,00
5.000.000,00 UF
AVE
499,70
5
1281
1
Hsbc Bank Usa N.a.
Estados Unidos
A+
61.312,00
2.000.000,00 UF
EUR
682,00
6
1282
1
Hsbc Bank Usa N.a.
Estados Unidos
A+
153.281,00
5.000.000,00 UF
EUR
682,00
6
1315
1
J.p Morgan & Co.
Estados Unidos
A
115.703,00
5.000.000,00 UF
AVE
515,00
4
1314
1
Banco De Chile
Chile
AAA
115.680,00
5.000.000,00 UF
AVE
514,90
4
1317
1
J.p Morgan & Co.
Estados Unidos
A
93.568,00
4.000.000,00 UF
AVE
520,90
6
1310
1
Barclays Bank Plc
Estados Unidos
A-
46.748,00
2.000.000,00 UF
AVE
520,50
4
1318
1
J.p Morgan & Co.
Estados Unidos
A
46.784,00
2.000.000,00 UF
AVE
520,90
4
1444
1
Banco Bbva Chile
Chile
AA-
21.346,00
1.000.000,00 UF
AVE
478,60
4,
1457
1
Banco Bbva Chile
Chile
AA-
42.691,00
2.000.000,00 UF
AVE
478,60
4,
1458
1
Banco Bbva Chile
Chile
AA-
42.691,00
2.000.000,00 UF
AVE
478,60
4,
1443
1
Banco Santander
Chile
AAA
21.183,00
1.000.000,00 UF
AVE
475,50
4,
1472
1
Banco Bbva Chile
Chile
AA-
121.638,00
5.746.234,00 UF
AVE
475,50
6,
1539
Jpmorgan 1 Chase Bank N.a
Chile
AAA
85.418,00
4.000.000,00 UF
AVE
481,50
4,
AUDITED FINANCIAL STATEMENTS
Valuation Reporting Transaction Date
Contract Expiry Date
Market Value Of Target Asset As Of Rep. Date M$
Market Exchange Rate
Market Rate Long Position
Market Rate Short Position
PRESENT VALUE LONG POSITION M$
Present Value Short Position M$
Information Origin
Tasa Posicion Corta
Fair Value Of Swap Contract As Of Rep. Date M$
Tasa Posicion Larga
6.82%
7.625%
26-10-2011
23-07-2019
1.919.840
479,96
6.82%
7.625%
2.135.498
1.987.169
148.329 BLOOMBERG
4.49%
5.5%
26-10-2011
18-11-2020
959.920
479,96
4.49%
5.5%
1.040.267
965.725
74.542 BLOOMBERG
5.06%
6%
18-10-2011
18-11-2020
479.960
479,96
5.06%
6%
529.732
492.746
36.986 BLOOMBERG
7.03%
7.625%
04-11-2011
10-11-2021
1.919.840
479,96
7.03%
7.625%
2.055.657
1.936.490
119.167 BLOOMBERG
7.03%
7.625%
04-11-2011
10-11-2021
1.439.880
479,96
7.03%
7.625%
1.541.743
1.452.368
89.375 BLOOMBERG
5.06%
6.125%
07-11-2011
29-07-2019
1.199.900
479,96
5.06%
6.125%
1.329.017
1.240.461
88.556 BLOOMBERG
5.06%
6.125%
07-11-2011
29-07-2019
2.399.800
479,96
5.06%
6.125%
2.658.035
2.480.921
177.114 BLOOMBERG
6.29%
6.375%
09-12-2011
05-08-2016
1.268.900
634,45
6.29%
6.375%
1.431.342
1.297.291
134.051 BLOOMBERG
6.29%
6.375%
09-12-2011
05-08-2016
3.172.250
634,45
6.29%
6.375%
3.578.354
3.243.227
335.127 BLOOMBERG
4.93%
6.125%
13-12-2011
15-01-2017
2.399.800
479,96
4.93%
6.125%
2.699.776
2.453.837
245.939 BLOOMBERG
4.81%
5%
13-12-2011
17-01-2017
2.399.800
479,96
4.81%
5%
2.698.988
2.453.837
245.151 BLOOMBERG
6.79%
7.625%
19-12-2011
10-11-2021
1.919.840
479,96
6.79%
7.625%
2.149.988
1.936.490
213.498 BLOOMBERG
4.79%
5%
19-12-2011
29-07-2019
959.920
479,96
4.79%
5%
1.099.222
992.369
106.853 BLOOMBERG
4.93%
6.125%
19-12-2011
10-11-2021
959.920
479,96
4.93%
6.125%
1.074.994
968.245
106.749 BLOOMBERG
,350%
5,375%
03-02-2012
02-02-2022
479.960
479,96
4,350%
5,375%
495.632
490.267
5.365 BLOOMBERG
,350%
5,375%
03-02-2012
02-02-2022
959.920
479,96
4,350%
5,375%
991.263
980.534
10.729 BLOOMBERG
,350%
5,375%
03-02-2012
02-02-2022
959.920
479,96
4,350%
5,375%
991.263
980.534
10.729 BLOOMBERG
,300%
5,375%
09-02-2012
02-02-2022
479.960
479,96
4,300%
5,375%
491.740
490.267
1.473 BLOOMBERG
,950%
7,373%
29-02-2012
15-06-2022
2.757.962
479,96
6,950%
7,373%
2.633.788
2.618.239
15.549 BLOOMBERG
,950%
4,625%
03-04-2012
13-02-2017
1.919.840
479,96
4,950%
4,625%
1.986.707
1.952.408
34.299 BLOOMBERG
AUDITED FINANCIAL STATEMENTS
135
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty
Transaction Characteristics Tipo Cambio Contrato
Currency Short Position
Currency Long Position
Nominal Short Position
Nominal Long Position
Risk Rating
Nationality
Name
HEDGING
136
1540
1
Deutsche Bank London
Inglaterra A
1638
1
J.p Morgan & Co.
Estados Unidos
1639
1
J.p Morgan & Co.
1671
1
1672
1
1673
21.446,00
1.000.000,00 UF
AVE
483,90
4,9
A
110.928,00
5.000.000,00 UF
AVE
502,00
4,8
Estados Unidos
A
22.186,00
1.000.000,00 UF
AVE
502,00
4,8
Banco Bbva Chile
Chile
AA-
21.843,00
1.000.000,00 UF
AVE
494,20
4,9
Banco Santander
Chile
AAA
10.874,00
500.000,00 UF
AVE
492,00
4,9
1 Banco Santander
Chile
AAA
43.677,00
2.000.000,00 UF
AVE
494,00
5,1
1682
1 Barclays Bank Plc
Estados Unidos
A-
66.162,00
2.500.000,00 UF
EUR
597,90
5,7
1696
1 Deutsche Bank London
Inglaterra A
85.896,00
4.000.000,00 UF
AVE
485,10
4,6
1694
1 Banco Santander
Chile
AAA
64.282,00
3.000.000,00 UF
AVE
484,00
6,9
1695
1 Barclays Bank Plc
Estados Unidos
A-
53.332,00
2.488.000,00 UF
AVE
484,00
6,9
1721
1 Barclays Bank Plc
Estados Unidos
A-
53.359,00
2.000.000,00 UF
EUR
601,88
6,9
1722
1 Barclays Bank Plc
Estados Unidos
A-
42.656,00
2.000.000,00 UF
AVE
481,15
4,6
1724
1 Barclays Bank Plc
Estados Unidos
A-
53.535,00
2.000.000,00 UF
EUR
603,86
7,0
1725
1 Barclays Bank Plc
Estados Unidos
A-
31.919,00
1.500.000,00 UF
AVE
480,05
4,2
1742
1 Banco Santander
Chile
AAA
63.162,00
3.000.000,00 UF
AVE
475,00
5,9
1745
1 Banco Santander
Chile
AAA
42.108,00
2.000.000,00 UF
AVE
475,00
6,5
1744
1 Banco Santander
Chile
AAA
31.581,00
1.500.000,00 UF
AVE
475,00
5,9
1743
1 Banco Santander
Chile
AAA
21.054,00
1.000.000,00 UF
AVE
475,00
5,9
1749
1 Deutsche Bank London
Inglaterra A
42.034,00
2.000.000,00 UF
AVE
474,20
6,5
1750
1 Deutsche Bank London
Inglaterra A
46.868,00
2.230.000,00 UF
AVE
474,20
6,2
AUDITED FINANCIAL STATEMENTS
Valuation Reporting Transaction Date
Contract Expiry Date
Market Value Of Target Asset As Of Rep. Date M$
Market Exchange Rate
Market Rate Long Position
Market Rate Short Position
PRESENT VALUE LONG POSITION M$
Present Value Short Position M$
Information Origin
Tasa Posicion Corta
Fair Value Of Swap Contract As Of Rep. Date M$
Tasa Posicion Larga
910%
4,625%
12-04-2012
13-02-2017
479.960
479,96
4,910%
4,625%
498.714
488.102
10.612 BLOOMBERG
800%
5,875%
29-06-2012
09-07-2022
2.399.800
479,96
4,800%
5,875%
2.589.337
2.467.041
122.296 BLOOMBERG
800%
5,875%
29-06-2012
09-07-2022
479.960
479,96
4,800%
5,875%
517.867
493.408
24.459 BLOOMBERG
970%
5,875%
10-07-2012
11-07-2022
479.960
479,96
4,970%
5,875%
510.420
493.408
17.012 BLOOMBERG
970%
5,875%
11-07-2012
11-07-2022
239.980
479,96
4,970%
5,875%
254.057
246.704
7.353 BLOOMBERG
190%
4,875%
12-07-2012
11-07-2022
959.920
479,96
5,190%
4,875%
1.020.459
986.816
33.643 BLOOMBERG
780%
6,750%
23-07-2012
19-02-2019
1.586.125
634,45
5,780%
6,750%
1.579.335
1.653.275
(73.940) BLOOMBERG
650%
4,250%
26-07-2012
18-06-2019
1.919.840
479,96
4,650%
4,250%
1.968.626
1.926.934
41.692 BLOOMBERG
900%
7,175%
27-07-2012
30-09-2022
1.439.880
479,96
6,900%
7,175%
1.505.821
1.484.425
21.396 BLOOMBERG
960%
7,175%
27-07-2012
18-06-2019
1.194.140
479,96
6,960%
7,175%
1.222.206
1.198.553
23.653 BLOOMBERG
970%
6,999%
30-08-2012
11-10-2018
1.268.900
634,45
6,970%
6,999%
1.226.993
1.276.702
(49.709) BLOOMBERG
685%
4,250%
30-08-2012
04-06-2018
959.920
479,96
4,685%
4,250%
980.072
965.652
14.420 BLOOMBERG
040%
6,999%
31-08-2012
11-10-2018
1.268.900
634,45
7,040%
6,999%
1.231.097
1.276.702
(45.605) BLOOMBERG
280%
5,125%
31-08-2012
04-06-2018
719.940
479,96
4,280%
5,125%
733.452
724.239
9.213 BLOOMBERG
930%
6,750%
10-09-2012
12-09-2022
1.439.880
479,96
5,930%
6,750%
1.459.481
1.461.176
(1.695) BLOOMBERG
500%
7,875%
10-09-2012
30-09-2022
959.920
479,96
6,500%
7,875%
987.173
989.617
(2.444) BLOOMBERG
930%
6,750%
10-09-2012
30-09-2022
719.940
479,96
5,930%
6,750%
740.380
742.213
(1.833) BLOOMBERG
930%
6,750%
10-09-2012
30-09-2022
479.960
479,96
5,930%
6,750%
493.587
494.808
(1.221) BLOOMBERG
500%
7,875%
11-09-2012
01-02-2027
959.920
479,96
6,500%
7,875%
986.570
993.950
(7.380) BLOOMBERG
200%
6,750%
11-09-2012
01-02-2027
1.070.311
479,96
6,200%
6,750%
1.100.025
1.108.254
(8.229) BLOOMBERG
AUDITED FINANCIAL STATEMENTS
137
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty
Transaction Characteristics Tipo Cambio Contrato
Currency Short Position
Currency Long Position
Nominal Short Position
Nominal Long Position
Risk Rating
Nationality
Name
HEDGING
138
1763
1 Banco Santander
Chile
1764
1 Deutsche Bank London
1776
10.431,00
500.000,00 UF
AVE
471,15
5,3
Inglaterra A
53.779,00
2.000.000,00 UF
EUR
607,34
5,3
1 Banco Santander
Chile
AAA
78.847,00
78.847,00 UF
UF
22.622.040,00
4,8
1778
1 Banco Santander
Chile
AAA
218.443,00
218.443,00 UF
UF
22.645.310,00
4,8
1777
1 Banco Santander
Chile
AAA
31.862,00
1.500.000,00 UF
AVE
482.000,00
5,5
1788
1 Banco Santander
Chile
AAA
105.258,00
5.000.000,00 UF
AVE
479.300,00
5,5
1790
1 Banco Santander
Chile
AAA
42.127,00
2.000.000,00 UF
AVE
479.700,00
3,9
1791
1 Banco Santander
Chile
AAA
84.255,00
4.000.000,00 UF
AVE
479.700,00
3,9
1801
1 Banco Santander
Chile
AAA
42.485,00
2.000.000,00 UF
AVE
484.500,00
5,3
1802
1 Ubs
Estados Unidos
A
125.923,00
6.000.000,00 UF
AVE
479.250,00
4,2
1812
1 Banco Santander
Chile
AAA
209.516,00
10.000.000,00 UF
AVE
479.300,00
4,6
1815
1 Banco Santander
Chile
AAA
209.516,00
10.000.000,00 UF
AVE
479.300,00
4,6
1814
1 Banco Santander
Chile
AAA
209.516,00
10.000.000,00 UF
AVE
479.300,00
4,6
1813
1 Banco Santander
Chile
AAA
209.516,00
10.000.000,00 UF
AVE
479.300,00
4,6
1824
1 Ubs
Estados Unidos
A
62.990,00
3.000.000,00 UF
AVE
481,00
5,0
INVESTMENT TOTAL
NOTE 8.2.9. CREDIT DEFAULT SWAPS (CDS) * As of December 31, 2012, the Company has no Credit Default Swaps.
AUDITED FINANCIAL STATEMENTS
AAA
Valuation Reporting Transaction Date
Contract Expiry Date
Market Value Of Target Asset As Of Rep. Date M$
Market Exchange Rate
Market Rate Long Position
Market Rate Short Position
PRESENT VALUE LONG POSITION M$
Present Value Short Position M$
Information Origin
Tasa Posicion Corta 4,875%
26-09-2012
11-07-2022
239.980
479,96
5,350%
4,875%
244.272
246.704
(2.432) BLOOMBERG
350%
4,875%
27-09-2012
19-02-2019
1.268.900
634,45
5,350%
4,875%
1.285.474
1.322.620
(37.146) BLOOMBERG
850%
14.908,20
12-10-2012
22-06-2026
1.800.925
22.840,75
4,850%
14.908,20
1.814.901
1.800.771
14.130 BLOOMBERG
850%
14.908,20
16-10-2012
22-06-2026
4.989.402
22.840,75
4,850%
14.908,20
5.028.398
4.989.357
39.041 BLOOMBERG
500%
5,500%
24-10-2012
20-01-2021
719.940
479,96
5,500%
5,500%
745.268
737.278
7.990 BLOOMBERG
540%
5,130%
06-11-2012
07-10-2019
2.399.800
479,96
5,540%
5,130%
2.434.376
2.427.013
7.363 BLOOMBERG
990%
4,130%
07-11-2012
09-11-2022
959.920
479,96
3,990%
4,130%
966.233
964.167
2.066 BLOOMBERG
990%
4,130%
07-11-2012
09-11-2022
1.919.840
479,96
3,990%
4,130%
1.932.466
1.928.335
4.131 BLOOMBERG
370%
5,380%
14-11-2012
02-02-2022
959.920
479,96
5,370%
5,380%
991.222
980.534
10.688 BLOOMBERG
220%
4,500%
20-11-2012
21-11-2022
2.879.760
479,96
4,220%
4,500%
2.885.776
2.890.762
(4.986) BLOOMBERG
675%
4,880%
29-11-2012
20-01-2023
4.799.600
479,96
4,675%
4,880%
4.794.884
4.810.317
(15.433) BLOOMBERG
675%
4,880%
29-11-2012
20-01-2023
4.799.600
479,96
4,675%
4,880%
4.794.884
4.810.317
(15.433) BLOOMBERG
675%
4,880%
29-11-2012
20-01-2023
4.799.600
479,96
4,675%
4,880%
4.794.884
4.810.317
(15.433) BLOOMBERG
675%
4,880%
29-11-2012
20-01-2023
4.799.600
479,96
4,675%
4,880%
4.794.884
4.810.317
(15.433) BLOOMBERG
090%
5,130%
06-12-2012
06-12-2022
1.439.880
479,96
5,090%
5,130%
1.437.605
1.438.791
(1.186) BLOOMBERG
186.541.885
176.427.423
173.935.926
Fair Value Of Swap Contract As Of Rep. Date M$
Tasa Posicion Larga
350%
10.114.462
AUDITED FINANCIAL STATEMENTS
139
NOTE 9. FINANCIAL ASSETS AT AMORTIZED COST
N.9.1. INVESTMENTS AT AMORTIZED COST Valor Razonable
Tasa Efectiva Promedio
Costo Amortizado Nto.
Deterioro
Costo Amortizado 37.847.748
37.847.748
53.095.823
4,08
599.054.518
599.054.518
571.311.203
4,55
521.317.116
537.064.580
4,47
41.786.015
21.912.800
5,99
DOMESTIC INVESTMENTS FIXED INCOME Government instruments Instruments issued by the financial system
140
Debt or credit instruments
521.317.116
Domestic debt instruments traded abroad
41.786.015
-
Mortgage loan notes
49.686.943
49.341.663
50.448.773
4,79
Syndicated loans
20.990.389
20.990.389
13.894.948
4,27
11.532.417
11.532.417
12.979.477
Others
345.280
FOREIGN INVESTMENTS
-
FIXED INCOME
-
Securities Issued by Foreign Governments and Central Banks Securities Issued by Foreign Banks and Financial Institutions Securities Issued by Foreign Companies
66.289.306
-
66.289.306
67.059.827
5,85 5,05
102.753.428
203.375
102.550.053
103.957.833
1.451.257.880
548.655
1.450.709.225
1.431.725.264
Others Total
IMPAIRMENT EVOLUTION Impairment Evolution Chart Initial balance as of 01/01 (-) Decrease and increase in impairment provision (-/+)
Total 644.091 (116.954)
Investment write-off (+) Variation due to exchange rate effect (-/+) Others Total
AUDITED FINANCIAL STATEMENTS
21.518 548.655
N.9.2. TRANSACTIONS FOR COMMITMENTS ON FINANCIAL INSTRUMENTS
Agreement Value as of Closing Date (16)
Market Value of Target Asset as of Reporting Date (15)
Agreement Accrued Interest (14)
Contract Expiry Date (13)
Transaction Date (12)
Agreement Interest Rate (11)
1
Currency (10)
1
N
Agreed Upon Value (9)
2
Initial Value (8)
1
Nominal (7)
1
Valuation Information
Target Asset Series (6)
Purchase Agreement
Transaction Counterparties
Target Asset (5)
Transaction Item (2)
Nationality (4)
Transaction Number (1)
Name (3)
Type of Transaction
TOTAL
Purchase Under Resale Agreement
1
1
2
1
N
1
TOTAL
Sale Under Repurchase Agreement
12706
Banco Bilbao Vizcaya Ar.
CL
BCU0300816
30
10000
233.038
233.876
$
0,49
41254
41276
761
234.168
233.800
12706
Banco Bilbao Vizcaya Ar.
CL
BCU0300816
30
70000
1.631.269
1.637.131
$
0,49
41254
41276
5329
1.638.690
1.636.598
12706
Banco Bilbao Vizcaya Ar.
CL
BCU0300517
30
20000
466.183
467.858
$
0,49
41254
41276
1523
470.577
467.705
12706
Banco Bilbao Vizcaya Ar.
CL
BCU0300517
30
23000
536.110
538.036
$
0,49
41254
41276
1751
528.177
537.861
12706
Banco Bilbao Vizcaya Ar.
CL
BCU0300517
30
31000
722.583
725.179
$
0,49
41254
41276
2360
712.033
724.943
12706
Banco Bilbao Vizcaya Ar.
CL
BTU0451023
45
10000
272.486
273.465
$
0,49
41254
41276
890
240.474
273.376
12706
Banco Bilbao Vizcaya Ar.
CL
BTU0451023
45
20000
544.972
546.930
$
0,49
41254
41276
1780
468.729
546.752
12706
Banco Bilbao Vizcaya Ar.
CL
BTU0451023
45
60000
1.634.915
1.640.790
$
0,49
41254
41276
5341
1.414.349
1.640.256
12706
Banco Bilbao Vizcaya Ar.
CL
BTU0451023
45
110000
2.997.345
3.008.115
$
0,49
41254
41276
9791
2.571.670
3.007.136
12706
Banco Bilbao Vizcaya Ar.
CL
BTU0450824
45
30000
827.197
830.169
$
0,49
41254
41276
2702
708.221
829.899
12706
Banco Bilbao Vizcaya Ar.
CL
BTU0450824
45
50000
1.378.662
1.383.616
$
0,49
41254
41276
4504
1.181.416
1.383.165
12706
Banco Bilbao Vizcaya Ar.
CL
BCU0300528
30
100000
2.392.986
2.401.585
$
0,49
41254
41276
7817
2.105.226
2.400.803
12706
Banco Bilbao Vizcaya Ar.
CL
BTU0300329
30
120000
2.890.058
2.900.442
$
0,49
41254
41276
9441
2.523.087
2.899.498
12706
BANCO BILBAO VIZCAYA AR.
CL
BFFCC-H
H
20000
569.533
571.579
$
0,49
41254
41276
1860
458.425
571.393
12706
BANCO BILBAO VIZCAYA AR.
CL
BFFCC-H
H
20000
569.533
571.579
$
0,49
41254
41276
1860
458.425
571.393
12706
BANCO BILBAO VIZCAYA AR.
CL
BFFCC-H
H
20000
569.533
571.579
$
0,49
41254
41276
1860
458.425
571.393
AUDITED FINANCIAL STATEMENTS
141
Valuation Information
41254
41276
1940
441.796
595.968
12706
BANCO BILBAO VIZCAYA AR.
CL
BFFCC-I
I
40000
1.188.055
1.192.324
$
0,49
41254
41276
3881
963.555
1.191.936
12706
BANCO BILBAO VIZCAYA AR.
CL
BMETR-D
D
100000
2.693.839
2.703.519
$
0,49
41254
41276
8800
2.403.866
2.702.639
12707
BANCO BILBAO VIZCAYA AR.
CL
BMETR-F
F
160000
4.379.972
4.395.713
$
0,49
41254
41276
14308
3.919.357
4.394.283
28.800.895
28.904.384
25.275.940
28.894.976
TOTAL
NOTE 10. LOANS 142
Amortized Cost
Impairment
Policyholder Advance
1.081.493
Loans Granted
6.398.905
TOTAL LOANS
7.480.398
Net Amortized Cost -
Non-existent
149.104
6.249.801
Non-existent
149.104
7.331.294
Impairment Evolution (1) Impairment Evolution Chart
Total
Initial balance as of 01/01 (-)
(195.598)
Decrease and increase in impairment provision (+/-)
46.494
Loan write-off (+)
-
Variation due to exchange rate effect (+/-)
-
Others
-
TOTAL IMPAIRMENT
AUDITED FINANCIAL STATEMENTS
Fair Value
1.081.493
(149.104)
Agreement Value as of Closing Date (16)
0,49
Market Value of Target Asset as of Reporting Date (15)
$
Agreement Accrued Interest (14)
596.162
Contract Expiry Date (13)
594.028
Transaction Date (12)
20000
Agreed Upon Value (9)
I
Initial Value (8)
BFFCC-I
Nominal (7)
CL
Target Asset Series (6)
BANCO BILBAO VIZCAYA AR.
Target Asset (5)
12706
Nationality (4)
Transaction Counterparties Name (3)
Transaction Item (2)
Agreement Interest Rate (11)
Transaction Number (1)
Currency (10)
Type of Transaction
NOTE 11. INVESTMENTS FROM SIA INSURANCES
Investments backing up fund value reserves for insurances where the company assumes the policy value risk
investments backing up fund value reserves for insurances where insured parties assume the policy value risk
Total Investments On Account Of The Insured Party
Assets At Cost
Assets At Fair Value
Total assets at cost
Deterioro
Cost
Total Assets At Fair Value
Level 3
Total Investments Managed By The Company
Level 2
Total Assets At Cost
Level 1
Total Investments Managed By The Company
Impairment
Cost
Total Assets At Fair Value
Assets At Cost
Assets At Fair Value
Level 3
Level 2
Level 1 DOMESTIC INVESTMENTS
Total Investments From Sia Insurances
-
Fixed Income
-
Government instruments
37.940.030
Instruments issued by the financial system
23.100.228
37.940.030
37.940.030 23.100.228
23.100.228
Debt or credit instruments
258.966
39.231
219.735
219.735
Domestic company instruments traded abroad
-
-
Mortgage loan notes
-
-
Others
-
-
Variable Income
-
-
Shares of publicly traded companies
-
-
Shares of closely held companies
-
-
Investment funds
-
-
Mutual funds
-
-
Others
-
-
-
Other Domestic Investments
-
AUDITED FINANCIAL STATEMENTS
143
NOTE 11. INVESTMENTS FROM SIA INSURANCES Investments backing up fund value reserves for insurances where the company assumes the policy value risk
Total Investments From Sia Insurances Total Investments On Account Of The Insured Party
Assets At Cost
Assets At Fair Value
Total assets at cost
Deterioro
Cost
Total Assets At Fair Value
Level 3
Level 2
Total Investments Managed By The Company
Level 1
Total Investments Managed By The Company
Total Assets At Cost
Impairment
Cost
Total Assets At Fair Value
Assets At Cost
Assets At Fair Value
Level 3
Level 2
Level 1
144
investments backing up fund value reserves for insurances where insured parties assume the policy value risk
FOREIGN INVESTMENTS
-
-
Fixed Income
-
-
Securities issued by Foreign Governments and Central Banks
-
-
Securities issued by Foreign Banks and Financial Institutions
-
Securities issued by Foreign Companies
-
Others
25.875.558
25.875.558
-
-
25.875.558
Fixed Income
-
-
Shares of Foreign Corporations
-
-
-
-
-
-
Foreign mutual fund installments
-
Installments of mutual funds set up in the country with assets invested in foreign securities Others Other Foreign Investments Banks TOTAL
AUDITED FINANCIAL STATEMENTS
25.875.558
-
-
25.875.558
61.299.224
39.231
61.259.993
385.996 -
87.521.547
NOTE 12. INTERESTS IN GROUP ENTITIES
NOTE 12.1. INTERESTS IN SUBSIDIARY COMPANIES (AFFILIATES) *As of December 31, 2012, the Company holds no Interests in Subsidiary Companies. NOTE 12.2. INTERESTS IN ASSOCIATED COMPANIES * As of December 31, 2012, the Company holds no Interests in Associated Companies.
NOTE 13. OTHER NOTES TO FINANCIAL INVESTMENTS NOTE 13.1. INVESTMENT PORTFOLIO MOVEMENTS
145
Fair Value INITIAL BALANCE Additions Sales Maturities Accrued interest
Amortized Cost 120.549.294
1.231.533.446
186.914.480
662.814.451
(186.466.871)
(305.652.752)
(2.449.121)
(213.520.039)
(12.830.153)
60.041.142
Pre-payments
0
(3.105.333)
Dividends
0
0
Ballot
0
(8.873.692)
Fair Value of Profit/Loss recognized in:
0
0
13.070.372
6.388.581
Income Shareholders’ Equity Impairment
(15.901)
0
0
205.620
Exchange Rate Difference
427.808
0
Profit or Loss per adjustable unit
122.319
20.877.801
0
0
Reclassification (1) Others (2) FINAL BALANCE
-
0
119.322.227
1.450.709.225
AUDITED FINANCIAL STATEMENTS
NOTE 13.2. GUARANTEES As of December 31, 2012, the Company has no Guarantees on Liabilities or Contingent Liabilities.
COMPAÑÍA DE SEGUROS CORP VIDA S.A. DIC-12
NOTE 13.3. FINANCIAL INSTRUMENTS COMPRISED OF EMBEDDED DERIVATIVES As of December 31, 2012 the Company has no Composite Financial Instruments.
146
NOTE 13.5. INVESTMENT PORTFOLIO REPORTING Reporting shall be made according to the instructions contained in General Regulation NCG No. 159. (1) Amount per type of investment reported in the Statement of Financial Position for the relevant reporting period. (2) Amount per type of investment reported in the Statement of Financial Position for the relevant reporting period, corresponding to the detail of the SIA Insurance Investment account. This field shall be completed only by the manager of the second group presenting insurances with a single investment account. (3) Total investments, corresponding to the sum of columns (1) and (2). The total in column No. (6)+(10)+(13)+(16) must correspond to the total in column No. (3).
AUDITED FINANCIAL STATEMENTS
Government Bonds Banking System Instruments
Total Investments (1) + (2) (3)
Total (1)
(*) This corresponds to the reinvestment IRR as a result of which the Company’s net present value of asset and liability flows is equal to zero.
Type of Investment (Titles No. 1 and 2 Of Art. 21 Of Decree Law Dfl No. 251)
Fair Value (1)
Reinvestment Rate Applying 100% of Tables 1.6859%
FECU Amount as of 31.12.2012
Amortized Cost (1)
NOTE 13.4. REINVESTMENT RATE-AAR-NCG NO. 209
Fecu Account Amount Per Type Of Inst. (Sia Insurances) (2)
37.847.748
37.847.748
37.940.030
75.787.779
599.054.518
1.073.989
600.128.507
23.100.228
623.228.735
584.093.520
3.225.922
587.319.442
219.735
587.539.177
49.341.663
-
49.341.663
-
49.341.663
Corporate Bonds
Mortgage Loan Notes Shares of Publicly Traded Companies
-
50.045.437
50.045.437
-
50.045.437
Shares of Closely Held Companies
-
2.644.648
2.644.648
-
2.644.648
-
53.131.573
53.131.573
-
53.131.573
-
4.249.610
4.249.610
-
4.249.610
114.371.179
1.384.708.628
61.259.993
1.445.968.622
Investment Funds Mutual Funds Foreign Investment Funds Foreign Shares Bank Syndicated Loans
Total
1.270.337.449
Investments Amenable to Custody M$
% of Invest. Amenable to Custody (4)/(3) (5)
Investment Custody Detail (Column No. 3)
(4)
Securities Deposit and Custody Firm
Bank
Other
Company
0,44%
623.228.735
100,00%
623.228.735
100,00%
100,00%
Central Securities
0
0,00%
512.757.445
87,27%
512.757.445
87,27%
100,00%
Central Securities
41.786.015
7,11%
0
0,00%
47.024.046
95,30%
50.045.437
100,00%
0
0,00%
22.727.149
42,78%
17.098.479
32,18%
75,23%
4.249.610
100,00%
4.249.610
100,00%
100,00%
1.286.184.111
88,95%
1.280.555.441
88,56%
99,56%
100,00%
100,00%
CorpBanca
Central Securities
IPS y Dipreca, Capredena
BBH
Iron Montain Chile S.A
0,00%
%
334.679
(17)
Central Securities
Amount (16)
% (14)
100,00%
Name of Custodian (15)
Amount (13)
96,55%
2,04%
Name of Custodian Bk (12)
Name of Securities Custody Firm (9)
73.175.735
12.005.328
% c/r Total Inv.
% c/r Inv. Amen. To Cust.
96,55%
50.045.437
Amount (10)
% c/r Total Inv. (7)
Amount (6)
73.175.735
2.277.365
3,00%
0
0,00%
20.990.389
3,57%
2.317.617
5,02%
0
0,00%
1.608.917
60,84%
Emisor
1.035.731
39,16%
Central Securities
0
0,00%
Emisor
36.033.094
67,82%
Central Securities
0
0,00%
Emisor
90.753.657
6,28%
12.005.328
1,03%
0,00%
62.654.196
4,13%
AUDITED FINANCIAL STATEMENTS
147
(4) Amount in M$ of total investments per type of instrument that may be safekept by a Securities Deposit and Custody Firm (Law 18,876). (5) % share of investments under custody of total investments reported in the Statement of Financial Position.
148
(6) Amount in M$ of investments that are safekept at Securities Deposit and Custody Firms, only as Depositors. (7) % share of investments safekept by Securities Deposit and Custody Firms with respect to total investments (Column No. 3). (8) % share of investments safekept by Securities Deposit and Custody Firms with respect to total investments under custody (Column No. 4). (9) The name of the Securities Deposit and Custody Firm must be indicated. (10)Amount in M$ of investments under custody at Banks or Financial Institutions. (11) % share of investments in Banks with respect to total investments (Column No. 3). (12) The name of the Bank or Financial Institution acting as Custodian for the insurance company’s investments must be indicated. (13)Amount in M$ of investments under custody at other Custodians different from the Securities Deposit and Custody Firm or Banks. This field must include Chilean Company or Chilean Government investments issued abroad.
AUDITED FINANCIAL STATEMENTS
(14) % share of investments at other Custodians with respect to total investments (Column No. 3). (15) The name of the Custodian must be indicated. (16) Amount in M$ of investments safekept under custody by the insurance company itself. (17)% share of investments safekept at the company with respect to total investments (Column No. 3). NOTE 13.6. INVESTMENT IN FUND INSTALLMENTS ON ACCOUNT OF INSURED PARTIES-NCG No. 176 * As of December 31, 2012, the Company has no Investments in Fund installments on account of insured parties.
NOTE 14. REAL ESTATE INVESTMENTS
NOTE 14.1. INVESTMENT PROPERTIES Items
Land
Buildings
Others
Total
Initial balance as of 01.01.2012
18.277.142
116.627.447
134.904.589
Plus: Additions, improvements, and transfers
19.853.023
10.950.233
30.803.256
Less: Sales, decreases, and transfers
(4.921.018)
(2.379.893)
(7.300.911)
Less: Depreciation for the period
-
(3.955.667)
(3.955.667)
2.685.072
3.071.184
123.927.192
157.522.451
Adjustments for revaluation
386.112
Others
-
Accounting Value of Investment Properties
33.595.259
-
0
-
Fair Value as of Closing Date (1)
184.395.480
Impairment (Provision)
(88.186) 157.434.265
Final Value as of Closing Date
(1) The value of the lowest appraisal must be indicated.
Investment Properties
Land
Final Value domestic real estate
Buildings 33.595.259
Others
149
Total
123.839.006
157.434.265
123.839.006
157.434.265
Final Value foreign real estate Final Value as of Closing Date
32.877.897
-
NOTE 14.2. LEASING ACCOUNTS RECEIVABLE
0
*1-5
995.688
166.235
829.454
*5 y mas
173.785.058
59.360.815
114.424.244
Total
174.780.746
59.527.050
115.253.698
Final Leasing Value
0
0
0
0
0
829.454
1.593.381
1.870.973
829.454
(75.991)
114.348.253
133.040.291
166.935.697
114.348.253
(75.991)
115.177.707
134.633.672
168.806.670
115.177.707
Final Leasing Value
0
Appraisal Value
Cost Value
0
Cost Value Present Value
*0-1
Receivable Interest
Contract Value Nominal Value
Remaining Years of Leasing Contract
AUDITED FINANCIAL STATEMENTS
NOTE 14.3. PROPERTIES FOR OWN USE Items
Land
Buildings
Others
Initial balance as of 01.01.2012
-
-
Plus: Additions, improvements, and transfers
-
-
Less: Sales, decreases, and transfers
-
-
Less: Depreciation for the period
-
-
Adjustments for revaluation
-
-
Others
-
-
48.632 -
Accounting Value of Properties, Plant, and Equipment for Own Use
Fair Value as of Closing Date (1)
Impairment (Provision)
150
TOTAL 48.632
Final Value as of Closing Date
(2.502)
(2.502)
987
987 47.117
54.196
-
47.117
(1) This corresponds to the amount of the lowest appraisal.
NOTE 15. NON-CURRENT ASSETS HELD FOR SALE
* As of December 31, 2012, the Company has no Non-Current Assets Held for Sale.
AUDITED FINANCIAL STATEMENTS
NOTE 16. INSURED PARTY ACCOUNTS RECEIVABLE
NOTE 16.1. INSURED PARTY DUE BALANCES Item
Related Company Balance
Saldos con terceros
TOTAL
3.192.171
3.192.171
Insured party accounts receivable (+)
-
Coinsurance accounts receivable (L铆der)
-
Impairment (-)
-
(690.160)
(690.160)
Total (=)
-
2.502.011
2.502.011
-
-
Current Assets (Short Term)
2.502.011
Non-Current Assets (Long Term)
-
NOTE 16.2. PREMIUM DEBTORS BY MATURITY DATE Balance Maturities
Documented premiums
Insurance premiums Dis. and Surv. DL3500
151 Coinsurance Accounts Receivable (Non-Lider)
Insured party premiums
With specification on payment mode
Otros Deudores
Unspecified Payment Mode
Payment Plan
Payment Plan
Payment Plan
Payment Plan
PAC
PAT
CUP
Company
-
1.490
120.111
-
3.070.570
-
-
851
-
-
419.879
-
215
-
-
268.933
-
198
-
-
536.103
-
-
1.845.655
-
-
688.896
-
REVOCABLE INSURANCES 1. Maturities prior to Financ. Statement date previous months October November December 2. Provisi贸n -Payments due Voluntary 3. Adjustments for nonidentification
226 -
1.264 1.264
-
120.111 -
688.896
-
AUDITED FINANCIAL STATEMENTS
Balance Maturities
Documented premiums
Insurance premiums Dis. and Surv. DL3500
Coinsurance Accounts Receivable (Non-Lider)
Insured party premiums
With specification on payment mode
152
5. Maturities subsequent to Financ. Statement date January February March subsequent months 6. Provision -Payments due -Voluntary 7. Subtotal ( 5-6 ) NONREVOCABLE INSURANCES 8. Maturities prior to 9. Maturities subsequent to Financ. Statement date 10. Impairment 11. Subtotal ( 8+9-10 ) 12. Total Fecu ( 4+7+11 ) 13. Nonenforceable credit row 4 14. Nondue credit revocable insurances ( 7+13 )
Otros Deudores
Unspecified Payment Mode
Payment Plan
Payment Plan
Payment Plan
Payment Plan
PAC
PAT
CUP
Company
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.381.674
-
226
120.111
TOTAL FECU
-
2.502.011
-
-
-
-
-
-
Domestic / Curr.
-
-
-
-
-
-
2.502.011
-
-
-
-
-
-
Foreign / Curr. 0
NOTE 16.3. EVOLUTION OF INSURED PARTY IMPAIRMENT Impairment Evolution Chart (1) Initial balance as of 01/01 (-) Decrease and increase in impairment provision (-/+)
Insurance Accounts Receivable
Coinsurance Accounts Receivable
TOTAL
2.390.112
2.390.112
(1.699.952)
(1.699.952)
Recovery from insurance accounts receivable (+) Write-offs for accounts receivable (+) Variation due to exchange rate effect (-/+) Total(=)
AUDITED FINANCIAL STATEMENTS
690.160
-
690.160
NOTE 17. DEBTORS FROM REINSURANCE TRANSACTIONS NOTE 17.1. DUE BALANCES FROM REINSURANCES Item
Related Company Balances
Third-Party Balances
TOTAL M$
Premiums receivable from reinsured parties (+)
-
Claims receivable from reinsurers
-
Assets from non-proportional reinsurances
-
Other debts receivable from reinsurances (+)
-
1.034
Impairment (-)
-
0
Total (=)
-
47.079
Assets from non-proportional revocable reinsurances
-
-
Assets from non-proportional nonrevocable reinsurances
-
-
Total Assets from Non-Proportional Insurances
-
-
-
46.045
46.045
-
1.034 47.079 193.196
153
193.196
NOTE 17.2. EVOLUTION OF REINSURANCE IMPAIRMENT Total Impairment
Other debts receivable from reinsurances
Assets from nonproportional reinsurances
Claims receivable from reinsurers
Premiums receivable from reinsurances
Impairment Evolution Chart
Initial balance as of 01/01 (-) Decrease and increase in impairment provision (-/+)
0
-
0
Recovery from reinsurance accounts receivable (+)
-
-
-
-
-
Accounts receivable write-off (+)
-
-
-
-
-
Variation due to exchange rate effect (-/+)
-
-
-
-
-
-
-
Total (=)
0
0
0
AUDITED FINANCIAL STATEMENTS
NOTE 17.3. CLAIMS RECEIVABLE FROM REINSURERS Reinsurers And/Or Reinsurance Brokers
Domestic Risk
Reinsurer 1
Reinsurer 2
Reinsurer Name
Mapfre Re
Hannover
Identification Code
R-101
R-187
R/NR Type of Relationship
NR
NR
Country
Espa単a
Alemania
CRA 1 Code
SP
SP
CRA 2 Code
AMB
AMB
Risk Rating 1
BBB+
AA-
Risk Rating 2
A
A+
Rating Date 1
25-10-2012
19-06-2012
Rating Date 2
26-06-2012
19-09-2012
REINSURER INFORMATION
DUE BALANCES
154
Previous months
-
jul - 12
-
aug - 12
-
sep - 12
-
oct - 12
-
nov - 12
-
dic - 12
-
jan - 13
-
feb - 13
-
mar - 13
-
apr - 13
-
may - 13
-
Subsequent months
-
4.933
3.289
1. TOTAL DUE BALANCES
-
4.933
3.289
-
4.933
3.289
2. IMPAIRMENT 3. TOTAL
AUDITED FINANCIAL STATEMENTS
Reinsurer 3
Reinsurer 4
Reinsurer 5
RGA Re
SCOR Global Lifre SE.
Suiza
R-210
R-252
R-105
NR
NR
NR
Estados Unidos
Francia
Suiza
SP
SP
SP
AMB
AMB
AMB
AA-
A+
AA-
A+
A
A+
31-12-2011
04-06-2012
18-12-2012
31-12-2011
15-03-2012
20-12-2011
Foreign Risk
Overall Total
-
-
-
-
-
-
-
-
-
-
-
-
155
-
-
13.239
24.584 -
13.239
13.239
-
-
24.584
24.584
37.823
37.823
-
-
-
8.222
8.222
46.045
46.045
0
0
46.045
46.045
AUDITED FINANCIAL STATEMENTS
NOTE 18. DEBTORS FROM COINSURANCE TRANSACTIONS
NOTE 18.1. DUE BALANCES FROM COINSURANCES * As of December 31, 2012, the Company has no payable balances from Coinsurances. NOTE 18.2. EVOLUTION OF COINSURANCE IMPAIRMENT * As of December 31, 2012, the Company has no Coinsurance Evolution Impairment.
NOTE 19. REINSURANCE INTEREST IN TECHNICAL RESERVES (ASSETS) AND TECHNICAL RESERVES (LIABILITIES) 156 Item
Direct
Accepted
Total liabilities Reinsurer Interest In reserves
Impairment
Reinsurance Interest in Technical reserves
RESERVE FOR LIFE INSURANCES Reserve for Ongoing Risk
2.697.029
-
2.697.029
Pension Fund Reserves
1.717.478.111
-
1.717.478.111
41.257.606
Reserve for Life Annuities
1.717.478.111
-
1.717.478.111
41.257.606
-
-
Disability and Survival Insurance Reserve Reserve for Unexpired ClaimS
-
-
-
-
15.873.108
Reserve for Private Annuities
17.137.636
-
17.137.636
143.014
Reserve for Claims
2.934.985
-
2.934.985
30.150
320.027
-
320.027
Claims Under Settlement Process Claims Occurring But Not Reported Premium Inadequacy Reserve
-
-
TOTAL
AUDITED FINANCIAL STATEMENTS
143.014 -
30.150
-
-
-
-
2.277.588
-
2.277.588
332.227
-
332.227
-
-
5.143
-
5.143
-
-
-
-
Other Technical Reserves Fund Value Reserve
-
41.257.606
-
-
Claims Settled But Contested by the Insured Party
41.257.606
-
15.873.108
Claims Settled But Not Paid
-
-
-
86.516.922
-
86.516.922
1.842.637.791
-
1.842.637.791
30.150
30.150
41.430.770
-
41.430.770
Main Assumptions Applied, Main maintaining at least one reserve equivalent to Characteristics, and Calibration Frequency one month of premium or, if longer, the premium equivalent for the grace period stated in the Reserve calculation was carried out based policy. on the instructions contained in General This is the case for the following insurances: Regulations NCG No. 306 and No. 318 of the - Collective life and health insurance policies Superintendency of Securities and Insurance, and collective title insurance policies with a issued on April 14, 2011 and September 1, 2011, validity period equal to or exceeding 1 year respectively. where premium is monthly calculated based on an agreed upon rate over the insured capital All the assumptions used in calculating reserves amounts for policyholders with coverage valid in are reviewed and updated on a quarterly basis, the corresponding month. as applicable. - Coverage cost of insurances with SIA. - Policies or Additional Coverages with annual For the determination of current Financial validity with or without an automatic renewal Statements, the Company exercised clause with a payment frequency less than the following options contained in the its validity. aforementioned regulations: These products are marketed through Individual, Collective, Bank Insurance, and Title Insurance 1. Life Annuities business lines. Pursuant to the provisions contained in NCG No. 318, No. 2, the Company applied the 2.2. Reserve for terms exceeding 4 years instructions in paragraph 2.1 only to policies Pursuant to the final paragraph of No. 1, Title III affective as of January 1, 2012. For life annuity of SVS NCG No. 306, the Company informed policies effective prior to such date, the reserve the Superintendency of its decision to apply was calculated pursuant to the instructions the calculation of the Reserve for Ongoing provided in Official Circular No. 1512 and other Risk based on terms exceeding 4 years for instructions provided by the Superintendency coverages for which there is no probability table of Securities and Insurance, effective on these registered at the registry of the Superintendency financial statement date. of Securities and Insurance for the calculation of Reserves for Unexpired Claims. 2. Reserve for Ongoing Risk 2.1. Exception for a hedging period shorter than 2.3. Application policy validity In accordance with the transitory provisions contained in Title VI, NCG No. 306, the new The Company adhered to the exception instructions concerning the setup of the Reserve contained in paragraph two, letter b), No. 1, Title for Ongoing Risk, set out in No. 1 of Title II of the III of NCG No. 306, introduced through NCG aforementioned regulation, were applied only to No. 320, with respect to considering, for the policies issued or renewed as of January 1, 2012. purpose of Reserve for Ongoing Risk calculation, the premium hedging and recognition period when this is shorter than policy validity,
AUDITED FINANCIAL STATEMENTS
157
158
3. Reserve for Unexpired Claims The methodology and criteria applied by Pursuant to paragraph 2.1, Title III of General the Company for weighing and segregating Regulation No. 306, the Superintendency of each FECU branch were presented to the Securities and Insurance, through Official Superintendency of Securities and Insurance Circular No. 10,210 of April 20, 2012, authorized and is based on the distribution of incurred the Company to apply a Reserve for Unexpired claims on Financial Statement date. Claims in the following cases: 5. Reserve for Premium Inadequacy - Insurances with a single premium associated The Premium Adequacy Test was conducted in with credits (consumer credit title insurances), accordance with the standard method stated regardless of the coverage term (death risk). in Exhibit 1 to NCG No. 306, which is based on the “Combined Ratio” concept, which relates - Individually subscribed insurances with a the insurance company technical disbursements single or leveled (death risk) premium, marketed with the recognized premium to address the under an individual or collective policy, without former, using the 12-month historical information a renewal clause and regardless of policy contained in the Financial Statements validity. immediately prior to the date of determination thereof. - Products with a leveled (death risk) premium, with premium refund, regardless of policy The Company performed the premium validity. adequacy analysis considering the branches defined by FECU and identifying within each 4. Reserve for Claims Occurring But Not account the component related to insurances Reported (OYNR) generating a Reserve for Ongoing Risk. For the estimation of the OYNR Reserve, the Company used the standard method generally Where disbursements are higher than revenues, applied for all modeled risks. The standard the Company reports a Premium Inadequacy method corresponds to the method based on Reserve additional to the Reserve for Ongoing the development of incurred claims, also called Risk. “Incurred Claim Triangle Method”, whose calculation is indicated in Exhibit 2 to NCG No. 306. Pursuant to the provisions contained in paragraph 3.2, Title II of SVS NCG No. 306, the Company conducted an estimation of OYNR Reserves by product portfolios considering the nature of the risks and similar claim management policies, which resulted in a branch distribution different from that established by FECU.
AUDITED FINANCIAL STATEMENTS
SUMMARY OF IMPACT OF NEW RESERVE STANDARDS The impact of the application of the new reserve standards on income and expense accounts, comparing the reserve set up on December 31, 2011 with that set up on January 1, 2012, implied an income loss equivalent to M$ 1,960,019 on account of greater reserve variation. The summary of this result by branch is as follows: IFRS IMPLEMENTATION IMPACT AS OF JANUARY 1, 2012 CORPVIDA (Figures in thousands of Chilean pesos) Code
Branch
101 102 103 104 105 106 107 108 109 110 111 112 113 114 150 201 202
Full Individual Life Term Individual Life Insurance Other Insurances with Individual SIA Mixed or Total Individual Private Annuities Total Simple or Deferred Capital Family Protection Individual Disability or Incapacity Insurance Individual Health Insurance Individual Personal Accidents Assistance Individual Title Insurance Individual Mandatory Personal Accident Insurance VPFS Insurances Other individual insurances Full Collective Life Insurance Term Collective Life Insurances
203 204 207 209 210 211 212 214
Mixed or Collective Disability or Incapacity Insurance Collective Disability or Incapacity Insurance Family Protection Collective Health Insurance Collective Personal Accident Insurance Collective Assistance Insurance Collective Title Insurance Insurances with Collective VPFS Total
Reserve for Ongoing Risk
Reserve for Unexpired Claims
Fund Value Reserve
OYNR
TSP
Total
TAP
0 0 0 0 0 0 0 45.948 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 -9.653 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 -891 111.224 0 0 0 0 -252 250.257 -13.424 0 0 0 5.421 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 -891 111.224 0 0 0 0 36.043 250.257 -13.424 0 0 0 5.421 0 0
86.233
-36.874
0
-62.687
0
0
-13.328
0 0 0 0 1.800.533 0 391.327 0 2.324.041
0 0 0 0 -349.147 0 -147.720 0 -543.395
0 0 0 0 0 0 0 0 0
0 0 0 -7.333 -9.410 0 -98.949 0 173.956
0 0 0 5.417 0 0 0 0 5.417
0 0 0 0 0 0 0 -1.916 0 1.441.976 0 0 0 144.658 0 0 0 1.960.019
AUDITED FINANCIAL STATEMENTS
159
NOTE 20. INTANGIBLE ASSETS
160
NOTE 20.1 GOODWILL * As of December 31, 2012, the Company has no Goodwill. NOTE 20.2. ACTIVOS INTANGIBLES DISTINTOS A GOODWILL Intangible assets are non-monetary rights owned by the Company, which are identifiable and without physical substance. For an asset to be recognized as intangible, it must meet the following conditions: -It must be identifiable, i.e., it must be possible to clearly distinguish it or separate it from other assets or rights. - Control over the asset must be effective, i.e., the Company must be entitled to obtain the future economic benefits deriving from underlying resources associated with it and must also be able to restrict third-parties from accessing such benefits. - Future economic benefits attributed to it must flow to the entity. - The asset cost may be valued in a reliable way. Software is included among the intangible assets to which this policy is applicable. Assets corresponding to Software These correspond to investments in Software Applications used for Company operations. These assets are classified as follows: Software Use Licenses: The rights over the use of computer programs whose source codes are
AUDITED FINANCIAL STATEMENTS
not owned by the Company and may not be transferred under any title to a third party. This type of assets shall only be capitalized when the validity of the use license exceeds 12 months and the involved amount is higher than UF 500. Otherwise, they shall be debited to income for the financial year, in the period where the respective disbursement occurs. The repayment term may not exceed 3 years. Own Software: Software whose source codes are owned by the Company, which may freely transfer them to a third party. This type of assets shall only be capitalized when their estimated useful life is equal or longer than 12 months and the total effective investment amount involved is higher than UF 500. Otherwise, they shall be debited to income for the financial year, in the period where the respective disbursement occurs. The repayment term may not exceed 5 years. The impairment test applied to this type of assets shall be the present value of future discounted flows whose discount rate shall be used in the initial evaluation, but may in no case be lower than an actual 3%. Accordingly, each asset shall be subject to an initial economic evaluation that will serve as the basis to conduct the Test annually; this shall be documented and the assumptions applied must be duly supported and approved by the Company´s Operations and Technology Management.
The recognition of the loss from impairment shall be debited to income for the financial year, when the cost or carrying value of the asset is higher than the present value of future discounted flows. If, in subsequent periods, the impairment test indicates that the loss is lower than that previously determined, the difference may be reversed credited to income for the financial year, with a maximum amount established by the accumulated impairment balance and provided that the net asset value does not exceed its cost or book value.
830.541
Licenses Remodeling Trademarks AFR TOTAL
117.370
58.840
2.258.772
163.297
6.980
70
101.485
60
2.716.645
1.052.809
-
Final Balance
232.039
Repayment M$
Additions M$
Software
Decreases M$
Initial Balance M$
161
Asset
191.144
871.436
118.380
57.830
1.796.607
625.462
2.596
98.949
2.108.728
1.660.727
7.050 -
AUDITED FINANCIAL STATEMENTS
NOTE 21. TAXES RECEIVABLE
NOTE 21.1. ACCOUNTS RECEIVABLE FOR TAXES Item
M$
Monthly Provisional Payments
-
Income Tax Credit
628.701
Donation Credit
4.741
Credit for Additional 2% Contribution
-
Credit for Training Expenses
77.557
4% Ret. Government Instruments
270
Income Tax Payable
162
86
TOTAL
711.355
NOTE 21.2.1. EFFECT OF DEFERRED TAXES ON SHAREHOLDERS’ EQUITY
Financial Investments with Effect on Shareholders’ Equity
Assets
Liabilities
Net
98.088
131.567
(33.479)
98.088
131.567
(33.479)
Hedges Others Total Debit(Credit) to Shareholders’ Equity
General Information The Company has not set up a provision for firstcategory income tax since there is a negative cumulative Net Taxable Income as of December 31, 2012, amounting to M$ (30.969.558).
AUDITED FINANCIAL STATEMENTS
F.U.T.
Amount M$
Negative balance
(29.844.254)
Credits for Shareholders
Others
Item
A single tax provision was set up on December 31, 2012 according to the regulations stated in article No. 21 of the Income Tax Law, amounting to M$ 14,721. As of December 31, 2012, retained tax losses are broken down as follows:
First-category credits
-
F.U.N.T.
Amount M$
Non-income earnings
383.514
Tax exempt income
-
In addition, the Company’s Monthly Provisional Payments (M.P.P.) have been suspended in accordance with current regulations because it has cumulative firstcategory tax losses.
NOTE 21.2.2. EFFECT OF DEFERRED TAXES ON INCOME
Items Impairment of Uncollectible Accounts
Assets
Liabilities 191.909
Net 191.909
Impairment of Debtors from Reinsurance
0
Impairment of Fixed-Income Instruments
60.546
60.546
Impairment of Mortgage Loan Notes
69.056
69.056
17.637
17.637
Impairment of Real Estate Impairment of Intangible Assets
0
Impairment of Leasing Contracts
15.198
Impairment of Loans Granted
29.821
15.198 29.821
Stock Valuation
1.539.130
(1.539.130)
Investment Fund Valuation
1.527.460
(1.527.460)
Mutual Fund Valuation
1.571
(1.571)
Foreign Investment Valuation
5.366
(5.366)
2.713.524
(2.713.524)
Valuation of Financial Risk Hedging Transactions Valuation or resale and repurchase agreements Remuneration Prov.
0 336.500
336.500
Bonuses Prov.
0
DEF Prov.
0
Vacation Prov.
142.493
142.493
Severance Payment Prov.
0
Prepaid Expenses
0
Activated Expenses
0
Tax Losses Leasing Contracts
6.193.912
6.193.912
4.393.706
4.393.706
Others
17.890
469.678
(451.788)
TOTAL
11.468.668
6.256.729
5.211.939
AUDITED FINANCIAL STATEMENTS
163
NOTE 22. OTHER ASSETS
NOTE 22.1. PERSONNEL DEBTS Items
Asset
Receivable Medical Leave Certificates
80.235
Loans
68.079
Advances
207.400
Others
138.367
TOTAL
494.081
NOTE 22.2. BROKER ACCOUNTS RECEIVABLE
164
Related Company Balances
Third-Party Balances
TOTAL M$
Broker Accounts Receivable (+) Pension fund consultant accounts receivable
-
30.566
30.566
Agents
-
204.549
204.549
Others
-
-
-
Other Insurance Accounts Receivable (+)
-
-
-
Impairment (-)
-
-
-
TOTAL Current Assets (Short Term) Non-Current Assets (Long Term)
AUDITED FINANCIAL STATEMENTS
235.115
235.115 235.115 -
NOTE 22.3. BALANCES WITH RELATED COMPANIES NOTE 22.3.1 BALANCES Related Entity
Tax Number
Related Company Debt
CorpBanca S.A.
97.023.000-9
Soc. Inv. Inmobiliarias Seguras S.A.
76.039.786-5
CAI Gestion Inmobiliaria S.A.
76.058.352-9
Cía. De Seguros CorpSeguros S.A.
76.073.138-2
Inmobiliaria CorpGroup
99.522.360-0
CorpBanca Corredores de Seguros S.A.
78.809.780-8
SMU Corp. S.A.
76.086.272-K
Debt with Related Entities 727.714
6.128.201 24.710 1.489.688
TOTAL
6.152.911
2.217.402
NOTE 22.3.2. COMPENSATIONS TO KEY SENIOR STAFF AND MANAGERS Items
Payable Compensations (M$)
Salaries
-
Other Benefits
-
TOTAL
-
165
Effect on Income (M$) 2.170.489 2.170.489
AUDITED FINANCIAL STATEMENTS
NOTE 22.4. TRANSACTIONS WITH RELATED PARTIES Related Entity
Tax Number
Nature of Relationship
Transaction Description
Transaction Amount M$
Effect on Income Profit(Loss)
Assets
166
Corp. Capital Adm. General de Fondos S.A.
96.513.630-4 Same Holding Company
Contributions
244.457.000
Corp. Capital Corredores de Bolsa S.A.
96.665.450-3 Same Holding Company
Investment Purchases
22.372.255
CorpBanca S.A.
97.023.000-9
Indirect Holding Company
Investment Purchases
54.917.950
CorpBanca S.A.
97.023.000-9
Indirect Holding Company
Office Leases
15.582
15.582
Inmobiliaria Edificio CorpGroup S.A.
99.522.360-0 Same Parent Company
Shared Expenses
151.596
151.596
Inmobiliaria Edificio CorpGroup S.A.
99.522.360-0 Same Parent Company
Office Leases
343.253
343.253
Inmobiliaria Edificio CorpGroup S.A.
99.522.360-0 Same Parent Company
Reserve Fund
24.710
CorpGroup Interhold
96.758.830-K Indirect Holding Company
Financial Consulting Fees
208.392
CAI Gesti贸n Inmobiliaria S.A.
76.058..352-9 Indirect Holding Company
Contributions
780.041
SR Inmobiliaria S.A.
76.002.124-5
Same Parent Company
Leases
129.423
129.423
SR Inmobiliaria S.A.
76.002.124-5
Same Parent Company
Intereses Leasing
551.950
551.950
SR Inmobiliaria S.A.
76.002.124-5
Same Parent Company
Installments Received
962.189
962.189
Inmobiliaria Puente Ltda.
76.046.651-4 Same Parent Company
Intereses Leasing
1.000.423
1.000.423
Inmobiliaria Puente Ltda.
76.046.651-4 Same Parent Company
Installments Received
1.750.549
1.750.549
Soc. de Inv. Inmobiliarias Seguras S.A.
76.039.786-5
Coligada
Contributions
953.534
C铆a. De Seguros CorpSeguros S.A.
76.073.138-2
Same Parent Company
Services Agreement
982.601
Empresas La Polar S.A.
96.874.030-K Same Parent Company
AUDITED FINANCIAL STATEMENTS
Leases
433.917
208.392
982.601 433.917
SubTotal
330.035.365
6.529.875
248.666.407
119.407
Liabilities Corp. Capital Adm. General de Fondos S.A.
96.513.630-4 Same Holding Company
Redemptions
Corp. Capital Corredores de Bolsa S.A.
96.665.450-3 Same Holding Company
Investment Sales
2.410.678
(1.247.741)
CorpBanca S.A.
97.023.000-9 Indirect Holding Company
Investment Sales
42.316.478
(3.503)
CorpBanca S.A.
97.023.000-9 Indirect Holding Company
M.H. Commissions
9.549
(9.549)
CorpBanca S.A.
97.023.000-9 Indirect Holding Company
Claims Paid
2.350.931
(2.350.931)
CorpBanca S.A.
97.023.000-9 Indirect Holding Company
Prov. for Collection Expense and Preferential Use
727.714
727.714
CorpBanca S.A.
97.023.000-9 Indirect Holding Company
Collection Expense and Preferential Use Payment
2.105.883
CorpBanca Corredores de Seguros S.A.
78.809.780-8 Same Holding Company
Commissions Paid
7.467.800
(7.467.800)
CAI Gesti贸n Inmobiliaria S.A.
76.058..352-9 Indirect Holding Company
Real Estate Consulting Fees
694.919
(694.919)
CAI Gesti贸n Inmobiliaria S.A.
76.058..352-9 Indirect Holding Company
Refunds
257.225
C铆a. De Seguros CorpSeguros S.A.
76.073.138-2 Same Parent Company
Investment Purchases
Soc. de Inv. Inmobiliarias Seguras S.A.
76.039.786-5 Coligada
Refund
SubTotal
12.112.166
167
298.946
1.788.447 320.908.197
(10.628.376)
650.943.562
(4.098.501)
650.943.562
(4.098.501)
Others Subtotal TOTAL
AUDITED FINANCIAL STATEMENTS
NOTE 22.5. PREPAID EXPENSES These correspond to disbursements for a software License, which are amortized over a 12-month period; as of December 31, 2012, prepaid expenses did not exceed 5% of total other assets. The balance as of December 31 is M$24,049.
NOTE 22.6. OTHER ASSETS Detail
M$
Accounts Receivable
1.872.540
San Arturo S.A.
7.453.387
Leases Receivable Acoger Santiago
168
64.261 1.077.259
Commercial Store Lease
299.397
Carcava S.A.
822.924
Lease Guarantees
137.285
Pension Fam. Allowance
19.700
VAT Receivable from Insured Parties
34.104
Advance on Purchase Commitment Assets Under Resale or Repurchase Agreements Other Assets Total Other Assets
AUDITED FINANCIAL STATEMENTS
1.039.185 25.275.939 200.987 38.296.968
NOTE 23. FINANCIAL LIABILITIES
NOTE 23.1. FINANCIAL LIABILITIES AT FAIR VALUE WITH CHANGES TO INCOME Liabilities At Fair Value M$
Item Securities representing Debt
-
Investment Derivatives
-
Underlying Derivatives
-
Others
-
Total
Liabilities Carrying Value
Effect On Income
-
0
Effect On Oci (1)
-
-
-
-
-
-
-
-
-
-
-
0
-
NOTE 23.2. FINANCIAL LIABILITIES AT AMORTIZED COST
169
NOTE 23.2.1 DEBT WITH FINANCIAL ENTITIES Name of Bank or Financial Institution
Granting Date
Unsettled Balance
Short Term
Consorcio
12-10-2012
7.080.632.500 UF
3,31000%
Long Term
TOTAL
Market Value
04-10-2013
7.133.692
7.133.692 8,48000%
7.213.270
TOTAL
7.133.692
7.133.692
7.213.270
AUDITED FINANCIAL STATEMENTS
NOTE 23.2.2. OTHER FINANCIAL LIABILITIES AT AMORTIZED COST Item
Liabilities at amortized cost M$
Resale and Repurchase Agreements
28.800.895
TOTAL
28.800.895
Liabilities carrying value
Effect on income
0
Effect on oci (1)
0
0
The detail of resale and repurchase agreements is disclosed in Note No. 9 of these financial statements.
NOTE 23.2.3. UNPAID ITEMS AND OTHER OUTSTANDING ITEMS
170
* As of December 31, 2012, the Company has no unpaid items or other outstanding items.
NOTE 24. NON-CURRENT LIABILITIES HELD FOR SALE (IFRS 5) * As of December 31, 2012, the Company has no non-current Liabilities held for sale.
AUDITED FINANCIAL STATEMENTS
NOTE 25. TECHNICAL RESERVES
NOTE 25.1. RESERVE FOR GENERAL INSURANCES * This is not applicable to life insurance companies.
NOTE 25.2. RESERVE FOR LIFE INSURANCES NOTE 25.2.1. RESERVE FOR ONGOING RISKS Items
M$
Initial balance as of January 1
3.226.935
Reserve for new sale
7.770.087
Reserve release
0
Release of stock reserve
(1.948.554)
Release of new sale reserve
(6.351.439)
Others
-
Total reserve for ongoing risk
2.697.029
171
NOTE 25.2.2. RESERVE FOR PENSION FUND INSURANCES Reserve For Life Annuities (5.21.31.21) Reserve previous Dec.
M$ 1.543.689.343
Reserves for life annuities contracted during the period
232.146.358
Pensions paid
(111.698.195)
Interest for the period Release for death Subtotal Reserve for Life Annuities for the Period
61.270.953 (10.781.039) 1.714.627.420
Uncollected pensions
187.801
Outdated checks
18.315
Uncollected checks
37.914
Unpaid due guaranteed annuities Others Total Reserve For Life Annuities
123.565 2.483.096 1.717.478.111
AUDITED FINANCIAL STATEMENTS
Disability and survival insurance reserve (5.21.31.22)
M$
Initial balance as of 01.01.XX Claim increase Total disability Partial disability Survival Release for payment of additional contributions (-) Total disability Partial disability Survival Payment of transitory partial disability pensions (-) Interest rate adjustment (+/-) Others Total disability and survival insurance reserve
0
DISCOUNT RATE Mes
172
Tasa
oct-12
2,98%
nov-12
2,99%
dic-12
2,99%
NOTE 25.2.3. RESERVE FOR UNEXPIRED CLAIMS Items
M$
Initial balance as of January 1
11.603.841
Premiums
13.781.671
Interest Reserve released due to death Reserve released due to other expiries
621.245 (2.134.536) (7.999.113)
Reserve for Unexpired Claims for the period Total Reserve for Unexpired Claims
AUDITED FINANCIAL STATEMENTS
15.873.108
NOTE 25.2.4. FUND VALUE RESERVE Fund Value Reserve
Risk Hedging
Fund Value Reserve
Reserve for SIA Insurance Gap
Reserve for Unexpired Claims
Reserve for Ongoing Risk
Life Insurances with Voluntary Pension Fund Saving (VPFS) (The Company assumes the policy value risk)
60.716
-
64.440.940
Other Life Insurances with a Single Investment Account (The Company assumes the policy value risk)
90.843
-
22.059.517
-
16.465
Life Insurances with Voluntary Pension Fund Saving (VPFS) (The insured assumes the policy value risk)
-
-
-
-
Other Life Insurances with a Single Investment Account (The insured assumes the policy value risk)
-
-
-
-
TOTAL
151.559
-
86.500.457
173 16.465
NOTE 25.2.4.1 RESERVE FOR GAPS ASSOCIATED WITH INSURANCES WITH A SINGLE INVESTMENT ACCOUNT (SIA) Fund name
Fund value type
Strategic Distribution
Investment Type of Investment
Conservative
VPFS
100% AIR Market rate:
Recon. Bonuses
Gap reserve Amount 25.527.861
Mortg. Bonds
2.584.115
Corp. Bonds
8.639.544
Bank Term Deposits Total
80.077 4.519.984 41.351.580
AUDITED FINANCIAL STATEMENTS
-
Moderate
VPFS
70% AIR 15% IGPA 15% S&P 500
Recon. Bonuses Mortg. Bonds
30.823
Corp. Bonds
103.051
Bank For. Shares
Moderate Domestic
VPFS
60% AIR 40% IGPA
Total
707.742
Recon. Bonuses
876.161
Mortg. Bonds
88.691
174
VPFS
Term Deposits
155.134
Corp. Bonds
131.604
Term Deposits
Domestic Stock
VPFS
AUDITED FINANCIAL STATEMENTS
25% IGPA 25% MSCI 50% S&P 500
100% IGPA
388.860 39.363
For. Shares
VPFS
2.377.047
Mortg. Bonds Bank
Stock
2.748 957.787
Recon. Bonuses
-
296.524
For. Shares Total Balanced
955 53.913
Bank
-
214.509
Term Deposits
Corp. Bonds
50% AIR 15% IGPA 15% MSCI 20% S&P 500
304.491
-
3.141 634.715 68.852
Total
1.266.537
Bank
2.485
For. Shares
986.561
Total
989.046
Bank
0
-
-
International
VPFS
Fund Value Reserve
Total
Diversified International
Development
Asian
European
Latin American
Technological
VPFS
VPFS
VPFS
VPFS
VPFS
VPFS
50% MSCI 50% S&P 500
35% S&P 500 15% Japan 10% Ex Japan 20% Europe 10% Latam 10% EM
30% Ex Japan 30% Latam 40% EM
60% Japan 40% Ex Japan
100% Europe
100% Latam
Bank
Reserva De Descalce
Reserve for SIA Insurance Gap Reserve for Unexpired Claims
Risk Hedging
Reserve for Ongoing Risk
Fund Value Reserve
5.641.754 594
For. Shares
117.183
Total
117.776
Bank
80
-
-
For. Shares
377.995
Total
378.076
Bank
1.740
For. Shares
2.398.355
Total
2.400.094
Bank
0
For. Shares
67.336
Total
67.336
Bank
0
For. Shares
150.215
Total
150.215
Bank
9.680
For. Shares
3.963.322
Total
3.973.003
100% Technolog Bank
179.000
For. Shares
378.394
Total
557.394
-
-
-
-
-
AUDITED FINANCIAL STATEMENTS
175
Corporate
Domestic Stock Exchange
Conservative
VPFS
VPFS
OTH
50% S&P 500 Bank 50% Invest Corp
100% IPSA
100% TIP Market rate:
For. Shares
61.927
Total
67.427
Bank
4.746.793
Total
4.746.793
Recon. Bonuses
Corp. Bonds CFM Nacional Term Deposits Total OTH
70% AIR 15% IGPA 15% S&P 500
Recon. Bonuses
Mortg. Bonds
176
60% TIP 40% IGPA
Balanced
OTR
AUDITED FINANCIAL STATEMENTS
50% TIP 15% IGPA 15% MSCI 20% S&P 500
2.150.727 16.961.047 27.753
-
2.404
17.232
Domestic MFI
0
Term Deposits
5.637 63.224 78.846
Mortg. Bonds
6.563
Corp. Bonds
25.099
For. Shares
75.539
Domestic MFI
0
Term Deposits
15.393
Bonos de Recon.
16.465
0
9.192
Total
-
3.506.918
1.007
Recon. Bonuses
-
917.033
Bank
Total OTH
10.386.369
Corp. Bonds For. Shares
Moderate Domestic
0
For. Shares
Mortg. Bonds
Moderate
5.500
-
201.440 14.004
-
Fund Value Reserve
Risk Hedging
Fund Value Reserve
4.603
Bank
1.899
25% IGPA 25% MSCI 50% S&P 500
0
Term Deposits
2.823
Recon. Bonuses Bank
Domestic Stock
OTH
100% IGPA
Diversified International
OTH
OTH
50% MSCI 50% S&P 500
35% S&P 500 15% Japan 10% Ex Japan 20% Europe 10% Latam 10% EM
112.853
Bank
Total
2.012.227
Bank
2.484
Recon. Bonuses
17.137
Total
19.621
Recon. Bonuses
-
177
113.400 1.898.827
Total OTH
0
For. Shares
Recon. Bonuses
-
10.168
Total
For. Shares
Development
1.597
101.087
Bank
30% Ex Japan 30% Latam 40% EM
44.196
For. Shares
Recon. Bonuses
International
19.663
Domestic MFI Total OTH
Reserve for Unexpired Claims
Reserve for Ongoing Risk
Corp. Bonds For. Shares
Stock
Reserva De Descalce
Reserve for SIA Insurance Gap
2.999
-
-
4.784 96.425 104.208 66.178
-
AUDITED FINANCIAL STATEMENTS
Asian
OTH
60% Japan 40% Ex Japan
Bank
554.380
Total
620.558
Recon. Bonuses Bank
European
Latin American
OTH
OTH
100% Europe
100% Latam
39.381
Total
44.297
Bank
178
Corporate
Domestic Stock Exchange
OTH
OTH
OTH
97.131
Total
97.131
1.261.032
Total
1.364.136 0
For. Shares
218.931
Total
218.931
50% S&P 500 Bank 50% Invest Corp
1.021
For. Shares
19.668
Total
20.689
Recon. Bonuses Bank
46.123 762.277
Total
884.400
(-) Impairment Total SIA Investments
-
-
-
-
76.000
For. Shares Sub Total
AUDITED FINANCIAL STATEMENTS
0
-
103.104
For. Shares 100% Technolog Bank
100% IPSA
0
For. Shares Bank
-
2.636
For. Shares
Recon. Bonuses
Technological
2.280
87.560.778
16.465
(39.231) 87.521.547
16.465
25.2.5. RESERVE FOR PRIVATE ANNUITIES Reserve for private annuities
Amount m$
Reserve previous Dec.
14.252.862
Reserve for private annuities contracted during the period
3.608.046
Pensions paid
(1.336.796)
Interest for the period
739.649
Release for items other than pensions
(126.125)
Others
-
Total Reserve for Private Annuities for the Period
17.137.636
NOTE 25.2.6. RESERVE FOR CLAIMS Reserve for claims
Initial balance as of january 1
Claims Settled But Not Paid
Increases
Decreases
307.177
Exchange rate difference adjustment
Others Final balance
12.851
320.028
Claims Settled But Contested by the Insured Party
-
Claims Under Settlement Process
1.870.731
Claims Occurring But Not Reported
391.606
Total Reserve for Claims
2.569.514
360.980
360.980
0
45.876
2.277.588
(68.983)
9.603
332.227
(56.132)
55.480
-
2.929.842
NOTE 25.2.7. RESERVE FOR PREMIUM INADEQUACY Premium Inadequacy Test Date 31-12-2012
Result m$ 5.143
AUDITED FINANCIAL STATEMENTS
179
Main Characteristics of the Calculation Model and Hypotheses Used
180
a) To consider generally accepted principles on an international level and the IFRS concepts associated with this Test. The methodology used corresponds to that b) To use the Company’s estimates with respect described in Exhibit 1 to NCG No. 306, with the to mortality and interest rate, i.e., to analyze the following considerations: adequacy of the reserve in accordance with the Company’s own experience and portfolio 1. For each FECU branch, the premiums, claims, characteristics. and reserves corresponding to the coverages with a Reserve for Ongoing Risk were identified. c) To consider the options or benefits for policyholders and the agreed upon guarantees 2. Intermediation costs were assigned based on provided to the former by the Company. the proportion represented by the Branch Direct d) To recognize the risk assigned to reinsurers Premium with respect to the Earned Premium for for accounting purposes. insurances with a Reserve for Ongoing Risk. For the determination of the Test flows, IFRS 4 3. In those cases where the application of criteria were taken as reference; in its paragraph NCG No. 306 implied a change to the reserve 16 letter (a), these criteria indicate that, as a methodology, the opening reserve was reminimum requirement, current estimates of all estimated for the purpose of recording its variation over the period under analysis. contractual cash flows and related cash flows, such as settlement costs and cash flows from 4. Administration Expenses were assigned options and underlying guarantees, must be by FECU branch in accordance with the considered. Company´s functional expense allocation criteria. For the definition of the technical criteria for this Test, the guidelines contained in International 5. As stated in Regulation No. 1,937 of the Actuarial Standard of Practice No. 6 (IAS 6) of Superintendency of Securities and Insurance, the the International Actuarial Association in relation Company uses FECU account information from to liability adequacy were considered. the quarter prior to financial statement closing date. If, due to the application of this Test, a technical reserve inadequacy is verified, the Company NOTE 25.2.8. OTHER RESERVES shall set up the corresponding additional Liability Adequacy Test technical reserve. Otherwise, no adjustments are applied to the technical reserve already set up. Date Result M$ 31-12-2011
-
31-12-2012
-
Characteristics and Hypotheses for the Calculation Model Used In accordance with the above, when defining and applying this Test, the Company took into account the following requirements:
AUDITED FINANCIAL STATEMENTS
Matching reserve adjustment
Financial technical reserve
Base Technical Reserve
Liabilities
Life Annuities Insurances with Reserves for Unexpired Claims Additionally, concerning application of the Test to Life Annuity Reserves, the following criteria The methodology for this test is based on the were taken into consideration: expected present value of claim flows plus the expense flows associated with their settlement - In accordance with NCG No. 318, only the less premium flows, if applicable. If the result setup of an additional technical reserve in the is less than the reserve estimated based on amount exceeding the difference in technical the instructions issued by NCG No. 306, the reserves accounted for by the gradual process difference shall be reported as an additional was considered. reserve, considering assignments to reinsurers on a proportional basis. - In addition and pursuant to Regulation No. 8,378 of the SVS of April 2, 2012, liability flows from already matched life annuity insurances were discounted using the accrual rate for NOTE 25.3. HEDGING the Company’s asset portfolio. To discount NOTE 25.3.1. HEDGING RESERVE ADJUSTMENT unmatched liability flows, the profitability rate of a portfolio representative of the new Company’s investments under current market conditions was considered. The methodology for this test is based on the expected present value of pension fund flows and the expense flows associated with their Non-Pension Initial Amount 13.662.898 13.558.944 103.954 settlement not considering reinsurances. If the Fund result is less than the reserve estimated based Final Amount 13.496.027 13.386.577 109.450 on the instructions issued by NCG No. 318, the Variation (166.871) (172.367) 5.496 difference shall be reported as an additional Pension Initial Amount 1.475.177.982 1.458.365.034 16.812.948 reserve, considering assignments to reinsurers on Fund a proportional basis. Final Amount 1.461.817.168 1.443.706.549 18.110.619 Variation (13.360.814) (14.658.485) 1.297.671 Insurances with a Single Investment Account Total Initial Amount 1.488.840.880 1.471.923.978 16.916.902 (SIA) Final Amount 1.475.313.195 1.457.093.126 18.220.069 Variation (13.527.685) (14.830.852) 1.303.167 The defined test involved calculating expected flows from the contracts in the portfolio under analysis within a horizon of at least 30 years. Contract flows for each period were estimated based on the characteristics of each policy discounting intermediation expenses, paid claims, reserve variations, and maintenance expenses from the agreed upon premiums. If one or more of the projected flows are negative, an additional reserve equivalent to the present value of the deficits so determined shall be reported, using as discount rate the Market Rate informed by the SVS as of reserve setup date.
AUDITED FINANCIAL STATEMENTS
181
NOTE 25.3.2. HEDGING INDICES Tier K
TIER 1 TIER 2 TIER 3 TIER 4 TIER 5 TIER 6 TIER 7 TIER 8 TIER 9 TIER 10 Total
Nominal Asset Flow In UF
Nominal Insurance Liability Financial Liability Flow Asset Hedging Flow In UF BK(1) CK Index CAK
-
-
-
Liability Hedging Index CPK
-
-
(1) RV-85, B-85, and MI-85, for policies effective prior to 09/03/2005 RV-2004, B-85, and MI-85, for policies effective from 09/03/2005 to 01/02/2008 RV-2009, B-2006, and MI-2006, for policies effective from 01/02/2008 CPK2 TIER K
182
TIER 1 TIER 2 TIER 3 TIER 4 TIER 5 TIER 6 TIER 7 TIER 8 TIER 9 TIER 10 Total
Nominal Asset Flow In UF 229.018.935 217.537.037 226.943.858 261.911.222 228.948.300 304.013.082 273.402.738 457.162.257 160.420.531 336.817 2.359.694.777
Nominal Insurance Liability Financial Liability Asset Hedging Index Liability Hedging Flow In UF Flow CAK Index CPK 219.621.829 7.133.693 0,959 1.000 214.697.001 0,987 1.000 207.054.846 0,912 1.000 197.794.402 0,755 1.000 186.954.771 0,817 1.000 257.322.733 0,846 1.000 225.390.941 0,824 1.000 298.275.038 0,652 1.000 258.781.789 1.000 0,620 175.863.474 1.000 0,002 7.133.693 2.241.756.824
(2) RV-2004, B-85, and MI-85, for policies effective prior to 01/02/2008 RV-2009, B-2006, and MI-2006, for policies effective from 01/02/2008
AUDITED FINANCIAL STATEMENTS
CPK3 Tier K
TIER 1
Nominal Asset Flow In UF AK
Nominal Insurance Liability Flow In UF BK(3)
Financial Asset Hedging Liability Liability Flow CK Index CAK Hedging Index CPK
229.018.935
219.831.575
TIER 2
217.537.037
215.522.291
TIER 3
226.943.858
208.761.173
TIER 4
261.911.222
TIER 5
0,960
1.000
-
0,991
1.000
-
0,920
1.000
200.613.600
-
0,766
1.000
228.948.300
191.093.623
-
0,835
1.000
TIER 6
304.013.082
266.272.870
-
0,876
1.000
TIER 7
273.402.738
237.639.841
-
0,869
1.000
TIER 8
457.162.257
324.466.828
-
0,710
1.000
TIER 9
160.420.531
298.646.802
-
1.000
0,537
336.817
227.933.154
-
1.000
0,001
TIER 10 Total
2.359.694.777
7.133.693
7.133.693
2.390.781.759
(3) RV-2004, B-2006, and MI-2006, for policies effective prior to 01/02/2008 RV-2009, B-2006, and MI-2006, for policies effective from 01/02/2008 CPK4 TIER K
Nominal Asset Flow In UF AK
Nominal Insurance Liability Flow IN UF BK(4)
Financial Asset Hedging Liability Flow CK Index CAK 7.133.693
Liability Hedging Index CPK
TIER 1
229.018.935
219.870.445
0,960
1.000
TIER 2
217.537.037
215.688.515
-
0,992
1.000
TIER 3
226.943.858
209.075.637
-
0,921
1.000
TIER 4
261.911.222
201.077.327
-
0,768
1.000
TIER 5
228.948.300
191.686.896
-
0,837
1.000
TIER 6
304.013.082
267.325.864
-
0,879
1.000
TIER 7
273.402.738
238.753.419
-
0,873
1.000
TIER 8
457.162.257
326.061.280
-
0,713
1.000
TIER 9
160.420.531
299.644.248
-
1.000
0,535
-
1.000
0,001
TIER 10 Total
336.817
227.494.737
2.359.694.777
2.396.678.369
7.133.693
(4) RV-2009, B-2006, and MI-2006, for the entire policy stock
AUDITED FINANCIAL STATEMENTS
183
NOTE 25.3.3. EQUIVALENT ISSUANCE COST RATE Month
Rate
oct-12
3,73%
nov-12
3,73%
dic-12
3,73%
NOTE 25.3.4. APPLICATION OF LIFE ANNUITY MORTALITY TABLES Application of RV-2009, B-2006, and M-2006 Tables
(8)
RV-2009 Unrecognized Difference
( 7)
RTF 2009-2006-2006
(6)
B-2004 and M-2006 Unrecognized Difference
(5)
RTFs 2004-2006-2006
(4)
RTF 2004-2006-2006
(3)
RF-2004 Unrecognized Difference
(2)
RTFs 2004-85-85
184
RTF 2004-85-85
RTF 85-85-85 (1)
( 9)
Policies effective prior to March 9, 2005
671.247.399
721.028.641 683.694.449
37.334.192
723.897.458
2.868.817
Policies effective from March 9, 2005 to January 31, 2008
192.193.652
203.898.719 195.120.328
8.778.391
204.259.111
360.392
Policies effective from February 1, 2008 Total
793.808.924 863.441.051
AUDITED FINANCIAL STATEMENTS
924.927.360
878.814.777
46.112.583 1.721.965.493
3.229.209
(1) RTF 85-85-85
(2) RTF 2004-85-85
(3) RTFs 2004-85-85
(4) Unrecognized DifferenceRV-2004 (5) RTF 2004-2006-2006
(6) RTFs 2004-2006-2006
Financial technical reserve calculated based on RV 85, B 85, and MI 85 mortality tables, hedging indexes calculated with liability flows from those tables as of closing date and using the 0.8 safety factor. Financial technical reserve calculated based on RV 2004, B 85, and MI 85 mortality tables, hedging indexes calculated with liability flows from those tables as of closing date. Financial technical reserve calculated according to the gradual recognition procedure contained in number XI of Official Circular No. 1,512. When the Company has completed recognition of RV 2004 tables, the values shown in columns (2) and (3) will be equal. Unrecognized Difference Difference between columns (2) and (3). Financial technical reserve calculated based on RV 2004, B 2006, and MI 2006 mortality tables, hedging indexes calculated with liability flows from those tables as of closing date. The Company made the decision to recognize B 2006 and MI 2006 tables according to Official Circular No. 1,857 Financial Technical Reserve calculated according to the gradual recognition procedure contained in number XI of Official Circular No. 1512, considering the modifications introduced by Official Circular No. 1,857. When the Company has reached the limit of 0.125 percent of the equivalent technical reserve for the previous period with the recognition of RV 2004 tables, this reserve will be equal to that shown in column (3). When the recognition of RV2004 tables has ended or the amount recognized in one quarter is lower than 0.125 percent of the equivalent reserve for the previous period, this reserve will be different from that stated in column (3). The 0.125 percent factor is the expression of a 0.5 percent factor on a quarterly basis.
AUDITED FINANCIAL STATEMENTS
185
(7) Unrecognized DifferenceB-2006 y MI-2006 (8) RTF 2009-2006-2006
(9) Unrecognized DifferenceRV-2009 (10) For insurance policies effective as of February 1, 2008, values should only be reported in column RTF 2009-2006-2006.
186
The company made the decision to recognize B 2006 and MI 2006 tables according to Official Circular No. 1,874. Financial Technical Reserve calculated based on the alternative recognition procedure contained in Official Circular No. 1874, i.e., through annual installments payable on a quarterly basis. Difference between columns (5) and (6). Financial technical reserve calculated based on RV 2009, B 2006, and MI 2006 mortality tables and hedging indexes calculated with liability flows from those tables as of closing date. - Difference between columns (8) and (5).
Recognition of MI-2006 and B-2006 tables (1)
Amount of annual installment referred to in letter b) of Official Circular No. 1,874
1.918.460
(2)
Value of quarterly installment
(3)
Installment number
(4)
Value of all the installments recognized on financial statement closing date
15.373.725
(5)
Average equivalent cost rate implicit in the calculation of base technical reserves out of the Company’s total life annuity portfolio effective as of January 31, 2008
(*) 3.8949%
479.615 Year 5, quarter 3
* Equivalent Cost Rate based on the recalculation of the Recognition Installment reported as of September 2010.
AUDITED FINANCIAL STATEMENTS
NOTE 25.4. DISABILITY AND SURVIVAL INSURANCE (SIS) RESERVE * As of December 31, 2012, the Company maintains no SIS Reserve. NOTE 25.5. SOAP * This is not applicable to Life Insurance Companies.
187
AUDITED FINANCIAL STATEMENTS
NOTE 26. DEBTS FROM INSURANCE TRANSACTIONS
NOTE 26.1. DEBTS WITH INSURED PARTIES * As of December 31, 2012, the Company has no Debts with insured parties. NOTE 26.2. DEBTS FROM REINSURANCE TRANSACTIONS PREMIUMS PAYABLE TO REINSURERS Balance Maturities
Domestic Risks
Foreign Risks
Overall Total
1. Non-Retained Balance
(363.424)
(363.424)
0
0
jan-13
(12.562)
(12.562)
feb-13
(42.141)
(42.141)
Previous Months sep-12 oct-12 nov-12 dic-12
188
mar-13 Subsequent Months 2 . Retained Funds
(26.086)
(26.086)
(282.635)
(282.635)
-
-
Previous Months jun-12 jul-12 aug-12 sep-12 oct-12 nov-12 dic-12 Subsequent Months Claims TOTAL
(363.424)
NOTE 26.3. DEBTS FROM COINSURANCE TRANSACTIONS * As of December 31, 2012, the Company has no debts from Coinsurance Transactions.
AUDITED FINANCIAL STATEMENTS
(363.424)
NOTE 27. PROVISIONS
ITEM
Balance as of 01.01.2012
Audit Provision
43.488
TOTAL
43.488 NonCurrent
Additional provision during the period
Increases in existing provisions
Current
TOTAL
Audit Provision
55.961
55.961
TOTAL
55.961
55.961
Amounts used during the period
57.665
(45.192)
57.665
(45.192)
Amounts not used during the period
Others
TOTAL
55.961 -
-
55.961
189
AUDIT PROVISION This is a provision arising from future disbursements for expenses incurred in contracting Financial Statement Auditing Services. These disbursements are made on a quarterly basis.
AUDITED FINANCIAL STATEMENTS
NOTE 28. OTHER LIABILITIES
NOTE 28.1.TAXES PAYABLE NOTE 28.1.1. ACCOUNTS PAYABLE FOR TAXES As of December 31, 2012, the detail of accounts payable for taxes is as follows: Item
M$
VAT Payable
265.900
Income Tax (1) Third-Party Tax
179.200
Reinsurance Tax
1.299
Others
1.471
TOTAL
447.869
(1) If the Income Tax payable is higher than associated credits
190
NOTE 28.1.2. LIABILITIES FROM DEFERRED TAXES *See Detail in Note 21.2. NOTE 28.2. LIABILITIES FROM DEFERRED TAXES *See Detail in Note 21.2. NOTE 28.3. NOTE 28.2. DEBTS WITH RELATED ENTITIES As of December 31, 2012, the detail of debts with brokers is as follows: Debts with Brokers
Saldos con empresas relacionadas
Pension fund consultants Agents
Saldos con terceros
TOTAL
4.579
4.579
30.647
30.647
Others
-
Other debts from insurances
-
Total
35.226
35.226
Current Liabilities (Short Term) Non-Current Liabilities (Long Term)
AUDITED FINANCIAL STATEMENTS
35.226 -
NOTE 28.4. DEBTS WITH PERSONNEL As of December 31, 2012, the detail of debts with personnel is as follows: ITEM
Total
Severance payments and others
-
Payable remunerations
44.027
Social Security debts
222.491
Provisions
2.276.730
Others
13.090
Total debts with personnel
2.556.338
NOTE 28.5. ANTICIPATED REVENUE
*As of December 31, 2012, the Company has no anticipated revenue.
NOTE 28.6. OTHER NON-FINANCIAL LIABILITIES
As of December 31, 2012, the detail of other non-financial liabilities is as follows:
Item Pension Fund Management Companies
Total -
Health
883.593
Workers’ Benefit Associations
479.456
Accounts payable Invoices payable
191
4.476.816 310.739
Others
2.012.483
Total Non-Financial Liabilities
8.163.087
AUDITED FINANCIAL STATEMENTS
NOTE 29. SHAREHOLDERS’ EQUITY
192
NOTE 29.1. PAID-IN CAPITAL At least the following must be disclosed: Capital The Corporation maintains a single stock series, without nominal value, in circulation; these shares are fully subscribed and paid-in. The number of shares corresponds to the authorized capital of the Corporation. During the 2012 and 2011 accounting periods, no movements were recorded on account of issues, redemptions, write-offs, reductions, or any other circumstances. On October 18, 2012, an Extraordinary Shareholder Meeting was held, where the decision was made, subject to the approval of the Superintendency of Securities and Insurance, to increase the Company’s capital stock from $127,378,510,653, divided into 681,495 ordinary nominative shares, of the same series, with no nominal value, fully subscribed and paid-in; the amount included $4,781,291,545, corresponding to the revaluation of own capital as of December 31, 2011 to $151,303,510,653, divided into 818,995 shares, through the issuance of 137,500 shares in the amount of $23,925,000,000, to be subscribed and paid-in within 30 days from the date of the SVS resolution approving the capital increase. On December 27, 2012, the capital increase stated in the previous paragraph was subscribed and paid-in, as approved by the Superintendency of Securities and Insurance through Exempt Resolution No. 458 of December 12, 2012. Dividend Policy In accordance with the provisions of Law No. 18,046, except if the Shareholders Meeting adopts a different agreement by unanimity of the issued shares, when there is profit, at least 30% of it must be devoted to dividend distribution.
AUDITED FINANCIAL STATEMENTS
- Shareholders Distribution The shareholders distribution as of December 31, 2011 and 2010, based on their percentage share in the ownership of the Company, is detailed in the table below: Nombre
RUT
Tipo persona
% Propiedad
Mass Mutual (Chile) Limitada. 76.080.631-5 JurĂdica Nacional
27,88%
Corp Group Vida Limitada.
72,12%
76.651.100-7
JurĂdica Nacional
193
AUDITED FINANCIAL STATEMENTS
Shareholders’ Equity Movement as of December 31, 2012
-
-
-
-
-
151.303.510 400.180
Reserve for hedging
11.748.904
-
-
-
6.471.165
18.220.069
Reserve for SIA gap
(12.709)
-
-
-
(4.213)
(16.922)
Other regulatory reserves Cumulative losses
194
Balances as of 30.09.2012 M$
23.925.000
Adjustments M$
-
Revaluation M$
-
400.180
Dividend Distribution M$
127.378.510
Capital Increase M$
Markup in sale of own shares
Distribution of Previous Acc. Period Income M$
Balances as of 01.01.12 Historical M$
Paid-up capital
0 107.650 (21.254.083)
Profit for the period
(21.254.083)
21.254.083
Shareholders’ Equity
118.368.452
0
NOTE 29.2. DIVIDEND DISTRIBUTION Over the period January 1 to December 31, 2012, the Company has distributed no Dividends.
AUDITED FINANCIAL STATEMENTS
-
-
(738.638)
(21.885.071)
-
-
2.238.068
2.238.068
0
0
7.966.382 150.259.834
NOTE 30. CURRENT REINSURERS AND REINSURANCE BROKERS
As of December 31, 2012, the detail of Reinsurers and Reinsurance Brokers is as follows: Name
Identification Code
Type Of Country Relationship
Assigned Nonpremium Proportional Reinsurance Cost
Total Risk Rating Reinsurance
Rating Agency Code
Risk Rating
Rating Date
C1
c2
c1
c2
c1
c2
1.- Reinsurers 1.1 Subtotal Domestic
-
-
673
448.447
449.120 SP
AMB
A-
A
17-01-2012 14-12-2011
288.631
288.631 SP
AMB
AA-
A
17-06-2011 15-11-2011
13.960
(16.318) SP
AMB
AA-
A+
31-12-2011 31-12-2011
SP
AMB
A
A
28-102011
26-04-2011
SP
AMB
AA-
A+
28-102011
20-12-2011
Mapfre re
R-101
NR
Espa単a
Hannover
R-187
NR
Alemania
Rga re
R-210
NR
EEUU
(30.278)
Scor global lifre se
R-252
NR
Francia
117.060
Suiza
R-105
NR
Suiza
73.005
1.2 Subtotal Foreign
-
117.060 73.005
160.460
751.038
911.498
2.1 Subtotal Domestic
-
-
-
2.2 Subtotal Foreign
-
-
-
2.- Reinsurance Brokers
Total Domestic Reinsurances
-
-
-
Total Foreign Reinsurances
160.460
751.038
911.498
Total Reinsurances
160.460
751.038
911.498
AUDITED FINANCIAL STATEMENTS
195
NOTE 31.TECHNICAL RESERVE VARIATION
As of December 31, 2012, the detail of Technical Reserve variation is as follows: Item Reserve for Ongoing Risk Reserve for Unexpired Claims Fund Value Reserve Catastrophic Reserve against Earthquakes Reserve for Premium Inadequacy Other Technical Reserves Total Technical Reserve Variation
196
AUDITED FINANCIAL STATEMENTS
Direct Assigned (1.851.124) (3.712.558) (15.502.226) -
Accepted -
-
-
-
(5.143) (21.071.051)
-
-
Total (1.851.124) (3.712.558) (15.502.226) (5.143) (21.071.051)
NOTE 32. CLAIM COST
As of December 31, 2012, the detail of Claim Cost is as follows: Item Direct Claims Direct claims paid (+) Direct payable claims (+) Direct payable claims previous period (-)
Amount (19.020.025) (18.864.521) (2.609.808) 2.454.304
Assigned Claims Assigned claims paid (+) Assigned payable claims (+) Assigned payable claims previous period (-)
369.803 474.420 30.152 (134.769)
Accepted Claims Accepted claims paid (+) Accepted payable claims (+) Accepted payable claims previous period (-) Total Claim Cost
(18.650.222)
AUDITED FINANCIAL STATEMENTS
197
NOTE 33. ADMINISTRATION COSTS
As of December 31, 2012, the detail of administration costs is as follows: Item Remunerations Expenses associated with the delivery channel Others Total Administration Costs
198
AUDITED FINANCIAL STATEMENTS
Total 8.339.610 19.619.202 27.958.812
NOTE 34. INSURANCE IMPAIRMENT
As of December, 2012, the detail of insurance Impairment is as follows: Items Premiums Claims Assets from Reinsurance Others Total
M$ (690.160)
(690.160)
199
AUDITED FINANCIAL STATEMENTS
NOTE 35. INVESTMENT INCOME
200
Investment Income Total Net Realized Investment Income Total realized real estate investments Income from sale of properties for own use Income from sale of goods under Leasing Income from sale of investment properties Others Total realized financial investments Income from financial instrument sales Others Total Net Unrealized Investment income Total unrealized real estate investments Variations in market value compared to adjusted cost value Others Total unrealized financial investments Portfolio mark to market Others Total Net Accrued Investment Income Total accrued real estate investments Interest from assets under Leasing Adjustments Others Total accrued financial investments Interest Adjustments Dividends
AUDITED FINANCIAL STATEMENTS
Investments at Amortized Cost 26.298.117 20.409.785 223.658 20.186.127 5.888.333 5.888.333 7.832 7.832 7.832
68.054.128 7.255.274 7.255.274 62.103.135 62.190.405
Investments at Fair Value 13.020.086 -
Total 39.318.203 20.409.785 223.659 -
13.020.086 13.020.086 -11.565.568 -
20.186.127 18.908.418 18.908.418 (11.557.736) 7.832 7.832
201 -
(11.565.568) (11.741.422) 175.853 7.331.091 -
(11.565.568) (11.741.422) 175.853 75.385.219 7.255.274 7.255.274 -
7.331.091
69.434.226 62.190.405 -
7.199.753
7.199.753
AUDITED FINANCIAL STATEMENTS
202
Others Total depreciation Depreciation of properties for own use Depreciation of investment properties Others Total management expenses Investment properties Expenses associated with investment portfolio management Others Income from Investments for Insurances with a Single Investment Account Total Investment Impairment Investment properties Assets under Leasing Properties for own use Financial investments Others Total Investment Income
AUDITED FINANCIAL STATEMENTS
(87.270) (1.264.669) (6.408) (1.258.261) (39.612) (39.612)
982.346 171.991
171.991 95.514.415
131.338 -
44.068 (1.264.669) (3.736) (610.883) -
0
(39.612) (39.612) -
1.751.644
2.733.991
-
171.991 171.991
10.537.253
106.051.668
AUDITED FINANCIAL STATEMENTS
203
NOTE 36. OTHER INCOME
As of December 31, 2012, the detail of Other Income is as follows:
Items Interest from premiums Other income Total Other Income
204
M$ 1.555.412 1.555.412
NOTE 37. OTHER EXPENSES
As of December 31, 2012, the detail of Other Expenses is as follows: Items M$ Financial expenses Bank expenses (adjustment and prov. premium and instrument write-offs ) Impairment Others Total Other Expenses
AUDITED FINANCIAL STATEMENTS
1.639.758 39.415 1.679.172
NOTE 38. EXCHANGE RATE AND ADJUSTABLE UNIT DIFFERENCES
As of December 31, 2012, the detail of Exchange Rate Difference is as follows: Items Assets Financial assets at fair value Financial assets at amortized cost Loans Investments for insurances with a single Investment Account (SIA) Real estate investments Accounts receivable from insured parties Debtors from reinsurance transactions Debtors from coinsurance transactions Reinsurance share of technical reserves Other assets Liabilities Financial liabilities Technical reserves Debts with insured parties Debts from reinsurance transactions Debts from coinsurance transactions Other liabilities Shareholders’ Equity Income Accounts Revenue accounts Expense accounts Investment Income Net debit (credit) to income Profit/loss from exchange rate difference
Debits
Credits 51.418.501 16.943.131 28.296.813
50.245.592 23.301.318 23.269.211
4.974.574
3.090.615
8.916
6.202
3.770
205
1.191.297
578.246
51.418.501
50.245.592
AUDITED FINANCIAL STATEMENTS
NOTE 38.1 PROFIT OR LOSS FOR ADJUSTABLE UNITS As of December 31, 2012, the detail of Adjustable Units is as follows:
206
Items Assets Financial assets at fair value Financial assets at amortized cost Loans Investments for insurances with a single Investment Account (SIA) Real estate investments Accounts receivable from insured parties Debtors from reinsurance transactions Debtors from coinsurance transactions Reinsurance share of technical reserves Other assets Liabilities Financial liabilities Technical reserves Debts with insured parties Debts from reinsurance transactions Debts from coinsurance transactions Other liabilities Shareholders’ equity Income accounts Revenue accounts Expense accounts Investment income Net debit (credit) to income Profit/loss from exchange rate difference
AUDITED FINANCIAL STATEMENTS
Debits
Credits 11.116.437 1.777.449 7.484.918 161.017
48.224.438 2.059.643 39.899.097 6.445
366.768
1.469.733
1.244.266
4.316.118
7.426
6.386
74.593 50.852.843 290.574 50.496.471
467.017 9.904.634 47.752 9.836.391
2.578
6.936
63.220
13.555
61.969.280
58.129.072
NOTE 39. PROFIT (LOSS) FROM DISCONTINUOUS TRANSACTIONS AND TRANSACTIONS WITH ASSETS AVAILABLE FOR SALE * As of December 31, 2012, the Company has no discontinuous transactions or transactions with assets available for sale.
NOTE 40. INCOME TAX
NOTE 40.1. INCOME FROM TAXES Item Expenses from income tax: Tax for the period Credit (debit) for deferred taxes: Generation and reversal of temporary differences Change in temporary differences not previously recognized Fiscal benefit from previous accounting periods Subtotal Taxes for rejected expenses Art. 21 Monthly provisional payments (MPP) for losses Cumulative Article 31, Paragraph 3 Others Net Debit (Credit) to Income for Income Tax
M$
207
2.398.502 (1.347.740) 1.050.762 14.721
1.065.483
AUDITED FINANCIAL STATEMENTS
NOTE 40.2. RECONCILIATION OF EFFECTIVE INCOME TAX Item Profit before tax Permanent differences Additions or deductions Single tax (rejected expenses) Non-deductible expenses (financial and non-tax expenses) Tax incentive not recognized in the income statement Others Effective Rate and Income Tax Expense
Tax Rate
% Amount M$ 20 660.710
0,4
14.721
11,6 32
390.052 1.065.483
NOTE 41. CASH FLOW STATEMENT 208 As of December 31, 2012, the detail of the “Others” heading exceeding 5% is as follows: Other Income Related to Financing Activities Detail Current account revenue Sales under repurchase agreement
Amount M$ 747.670 133.142.019 133.889.689
Totales Other Expenses Related to Financing Activities Detail Credit line use Current account Sale under repurchase agreement maturities Totales
AUDITED FINANCIAL STATEMENTS
Amount M$ 62.549.328 1.378.360 104.435.819 168.363.507
NOTE 42. CONTINGENCIES AND COMMITMENTS
Type of Contingency or Commitment
Commitment Creditor
Committed Assets
Type
Unpaid balance as of Fin. Statement closing date M$
Released Commitment Amount M$
Observations
Carrying Value M$
Legal Procedures
Legal Suits Fundo la CopVida S.A. Villana, Parcela No. 24, ML B-24
Real Estate
184.062
184.062
As of Financial Statement closing date, the Company has a land title registration procedure in process at the Santiago Real Estate Registry.
Assets in guarantee
Others
AUDITED FINANCIAL STATEMENTS
209
NOTE 43. SUBSEQUENT EVENTS
Over the period between January 1, 2013 and the date of submission of these financial statements, the following events to be reported occurred: On January 2, 2013, Mr. Miguel Ángel Valdés Jofré joined the Company as Compliance Official. At Board of Director Meeting held on January 31, 2013, he was also appointed as Crime Prevention Supervisor, in accordance with Law 20,393.
210
On February 19, 2013, an essential fact was reported; namely, the incorporation of Mr. José Luis Montero Pérez as new Company Management Control and Financial Manager. The Financial Statements as of December 31, 2012 were approved by the Board of Directors on February 28, 2013. As of the date of issuance of these Financial Statements, the Company’s Management was not knowledgeable of any subsequent events that may have significantly affected the interpretation of these statements.
AUDITED FINANCIAL STATEMENTS
NOTE 44. FOREIGN CURRENCY
1. ASSET AND LIABILITY POSITION IN FOREIGN CURRENCY Assets Investments Deposits Others Premium debtors Insured parties Reinsured parties Claim debtors Other debtors Other assets Total Assets
US Dollar
Liabilities
Currency 1
Reserves Ongoing Risk Unexpired Claims Claims payable Premiums payable Insured parties Reinsured parties Debts with Institutions Financial institutions Hedging transactions Other liabilities Total Liabilities Net Position
Currency 2 Other Currencies Consolidated (M$)
202.971.071
202.971.071
46.046
46.046
1.417.945 950.038 205.385.100
1.417.945 950.038 205.385.100
0
0
Currency 2 Other Currencies
Consolidated (M$)
363.423
363.423
178.248.964
178.248.964
178.612.387
0
0
178.612.387
26.772.713
0
0
26.772.713
AUDITED FINANCIAL STATEMENTS
211
Net Position (Currency of Origin)
55.781
Exchange Rate as of 31.12.2012
479,96
2. FOREIGN CURRENCY MOVEMENT ON ACCOUNT OF REINSURANCES Item
U.S. Dollar Inflows
212
Consolidated (M$) Outflows
Premiums Claims
(654.259) 1.202.153
Net Movement
Inflows
(654.259)
Outflows
(654.259)
1.202.153
1.202.153
547.894
1.202.153
Net Movement
(654.259) 1.202.153
Others Net Movement
1.202.153
AUDITED FINANCIAL STATEMENTS
(654.259)
(654.259)
547.894
3. CONTRIBUTION MARGIN OF FOREIGN CURRENCY INSURANCE TRANSACTIONS
ITEMS
U.S. Dollar
Consolidated M$
Direct Premium Accepted Premium Technical Reserve Adjustment Operating Income
0
0
Intermediation Cost Claim Cost Administration Cost Total Operating Cost
0
0
14.800.577
14.800.577
14.800.577
14.800.577
Investment Proceeds Other Revenue and Expenses Price-level Restatement Income before Tax
213
NOTE 45. SALES CHART BY REGION (GENERAL INSURANCES) *This is not applicable to Life Insurance Companies.
AUDITED FINANCIAL STATEMENTS
NOTE 46. SOLVENCY MARGIN (GENERAL INFORMATION)
COMPAÑÍA DE SEGUROS CORPVIDA S.A. SOLVENCY MARGIN - LIFE INSURANCES (Figures in thousands of Chilean pesos) 1. GENERAL INFORMATION CHART No. 1 Insurances
214
Premium Direct
Accepted
Insured Amount Direct Accepted
Assigned
Assigned
Accidents
138.489
0
0
66.335.248
0
Health
637.699
0
0
1.789.424.298
0
Additional
3.474.597
0
0
1.325.583.323
0
Subtotal
4.250.784
0
0
3.181.342.869
0
W/O Res. Unex. Claims (W/O Additional) W/ Res. Unex. Claims (W/O Additional)
AUDITED FINANCIAL STATEMENTS
930.448.838
2.461.804.221
Reserve Direct
d
Accepted
0
1.471.591
0
144.255
0
1.281.830
0
2.897.676
Risk Capital Direct
Assigned
Assigned
215 0
0
1.611.421
120.620.433
Accepted
928.837.417
(143.014)
AUDITED FINANCIAL STATEMENTS
Insurances
Premium Direct
Accepted
Assigned
Insured Amount Direct Accepted
Assigned
Under DL 3500 AFP Ins. Disab. and Surv. Life Annuities
COMPAÑÍA DE SEGUROS CORPVIDA S.A. SOLVENCY MARGIN - LIFE INSURANCES (Figures in thousands of Chilean pesos) CLAIMS OVER THE LAST THREE YEARS CHART No. 2
216
INSURANCES
Accidents
Health
Additional
Total
AUDITED FINANCIAL STATEMENTS
Claim Cost Over The Last Three Years Year I Direct Accepted Assigned 50.117
0
0
912.119
0
0
825.202
0
0
1.787.438
0
0
d
Reserve Direct
Accepted
Assigned
0 0 1.717.478.111
0 0 0
0 0 (41.257.606)
Year I-1 Direct
Accepted
Risk Capital Direct
Assigned
217
YEAR I-2 Direct
Assigned
Accepted
Accepted
Assigned
66.056
0
0
38.791
0
0
2.036.595
0
0
6.108.880
0
0
1.816.405
0
0
2.052.173
0
0
3.919.056 0
0
8.199.844
0
0
AUDITED FINANCIAL STATEMENTS
COMPAÑÍA DE SEGUROS CORPVIDA S.A. SOLVENCY MARGIN - LIFE INSURANCES (Figures in thousands of Chilean pesos) SUMMARY CHART No. 3 A. ACCIDENT, HEALTH, AND ADDITIONAL INSURANCES Solvency Margin As A Function Of F.P. F.R (%) % Premiums CIA. 14 Accidents 138.489 85
218
S.V.S. 95 18.419
Health
637.699
73
84.814
Additional
3.474.597
98
476.715
Total
B. INSURANCES NOT GENERATING RESERVES FOR UNEXPIRED CLAIMS
Solvency Margin Risk Capital
928.837.417
AUDITED FINANCIAL STATEMENTS
Factor %
0,0005
R. Ratio (%) CIA
S.V.S.
TOTAL
76%
50%
352.958
As A Function Of F.S. % Claims 17 51.655
TOTAL F.R. (%) CIA.
S.V.S. 95
85
8.342
18.419
3.019.198
73
487.600
487.600
1.564.593
98
260.661
476.715 982.734
AUDITED FINANCIAL STATEMENTS
219
C. INSURANCES WITH RESERVES FOR UNEXPIRED CLAIMS
Solvency Margin Total Indirect Insurance Reserves Liabilities Liabilities
Accidents 1.850.980.915
Health
Reserves Letter B Insurances Additional
1.471.591 144.255
Solvency Margin ( A + B + C )
220 NOTE 46.2. SOLVENCY MARGIN - GENERAL INSURANCES
*This is not applicable to Life Insurance Companies.
AUDITED FINANCIAL STATEMENTS
Letter A
1.281.830 2.897.676
1.611.421
Fund Value Reserve
86.516.922
Cpy. Oblig. Less A - B Subtotal (Prev. Subtotal Total -F. V. Res Column / 20) (Fund V. Res. / 140)
1.759.954.896
87.997.745
617.978
88.615.723
221
AUDITED FINANCIAL STATEMENTS
NOTE 47. COMPLIANCE WITH OFFICIAL CIRCULAR NO. 794 (ONLY GENERAL INSURANCES) *This is not applicable to Life insurance
NOTE 48. SOLVENCY NOTE 48.1. COMPLIANCE WITH INVESTMENT AND INDEBTEDNESS REGIME
222
Obligation to invest Technical Reserves and Risk Capital Technical Reserves Risk Capital Investments representing Technical Reserves and Risk Capital Surplus (Deficit) of Investments representing Technical Reserves and Risk Capital Net Worth Shareholders' Equity Non-Cash Assets (-) INDEBTEDNESS Total Financial
AUDITED FINANCIAL STATEMENTS
1.891.472.946 1.801.207.021 90.265.925 1.912.315.533
20.842.587
139.028.292 150.259.834 (11.231.542) 139.028.292 12,83 0,40
NOTE 48.2. INVESTMENT OBLIGATION
Total Pension Fund Insurance Reserves Reserve for Life Annuities 5.31.21.21 Reserve for Life Annuities 5.14.22.10 Reinsurance Interest in Reserve for Life Annuities Disability and Survival Insurance Reserve 5.21.31.22 Disability and Survival Insurance Reserve 5.14.22.20 Reinsurance Interest in Disability and Survival Insurance Reserve Total Non-Pension Fund Insurance Reserves Reserve for Ongoing Risks 5.21.31.00 Reserve for Ongoing Risks 5.14.21.00 Reinsurance Interest in Reserve for Ongoing Risks Reserve for Unexpired Claims 5.21.31.30 Reserve for Unexpired Claims 5.14.23.00 Reinsurance Interest in Reserve for Unexpired Claims 5.21.31.40 Fund Value Reserve
1.676.220.505 1.676.220.505 1.717.478.111 41.257.606
124.981.373 2.697.029 2.697.029
15.873.108 15.873.108
86.516.922
AUDITED FINANCIAL STATEMENTS
223
Reserve for Private Annuities 5.31.21.50 Reserve for Private Annuities 5.14.24.00 Reinsurance Interest in Reserve for Private Annuities Reserve for Claims 5.31.21.60 Reserve for Claims 5.14.25.00 Reinsurance Interest in Reserve for Claims Catastrophic Reserve against Earthquakes 5.21.31.70 Catastrophic Reserve against Earthquakes 5.14.26.00 Reinsurance Interest in Catastrophic Reserve against Earthquakes
224
Total Additional Reserves Reserve for Premium Inadequacy 5.21.31.80 Reserve for Premium Inadequacy 5.14.27.00 Reinsurance Interest in Reserve for Premium Inadequacy Other Technical Reserves 5.21.31.90 Other Technical Reserves 5.14.28.00 Reinsurance Interest in Other Technical Reserves 5.21.32.00 Debts from Insurance Transactions
AUDITED FINANCIAL STATEMENTS
16.994.622 17.137.636 143.014 2.899.692 2.929.842 30.150 -
5.143 5.143 5.143
-
-
-
TOTAL OBLIGATION TO INVEST TECHNICAL RESERVES
1.801.207.021
Risk Capital Solvency Margin Debt Capital ((PE+PI)/5) General Insur. Cps. ((PE+PI-RVF)/20)+(RVF/140) Life Insur. Cps. Current Liabilities + Indirect Liabilities - Technical Reserves Minimum Equity UF 90,000 (UF 120,000 for Reinsurance)
90.265.925
TOTAL INVESTMENT OBLIGATION (TECHNICAL RESERVES + RISK CAPITAL)
90.265.925 86.516.922
56.064.102 2.055.668
1.891.472.946
225
AUDITED FINANCIAL STATEMENTS
NOTE 48.3.NON-CASH ASSETS
226 Non-Proportional Reinsurance Remodeling Current Accounts Others
5.15.12.00
139.725
5.15.12.00
6.980
5.15.12.00
101.485
5.14.12.30
221.641
5.15.12.00
952.419
5.15.35.0015.874.288 5.15.33.00 5.15.12.00
TOTAL NONCASH INVESTMENTS
AUDITED FINANCIAL STATEMENTS
26.949 17.555.525
0904871.436 70.113 2009 300457.829 21.750 2009 31-127.050 2006 300698.949 2011 3006193.196 751.042 2011 31-12625.464 439.657 2007 31-039.353.568 2009 31-1024.050 2011 11.231.542
Repayment Term (months)
Trademark Licenses A.F.R
232.038
Period Repayment M$
Software Use Licenses
5.15.12.00
Asset Balance M$
Software
Initial Date
Initial Asset M$
Financial Statement Account
Non-Cash Assets
36
36 -
12 60 -
NOTE 48.4. INVESTMENT STOCK
Assets Representing Technical Reserves And Shareholders' Equity a) Instruments issued by the Government or the Central Bank b) Term deposits or securities representing deposittaking at Banks and Financial Institutions b.1 Deposits and others b.2 Bank bonds c) Mortgage bonds issued by Banks and Financial Institutions d) Bonds, promissory notes, and debentures issued by public or private comps. dd) Investment fund installments dd.1 Movable assets dd.2 Real estate dd.3 Risk capital e) Shares of admitted publicly traded companies ee) Shares of real estate publicly traded companies f) Credit to insured parties for non-due and nonaccrued premiums (1st group) g) Claims receivable from reinsurers (for claims paid to insured parties), non-due h) Real estate h.1 Non-residential real estate for own use or lease h.2 Non-residential real estate granted under leasing
Partial
Total 75.789.129 480.656.515
82.401.666 398.254.849 142.572.239 573.342.409 24.729.354 12.839.120 9.888.029 2.002.205
227 50.045.436
157.297.315 115.177.705
AUDITED FINANCIAL STATEMENTS
228
h.3 Residential, urban real estate for own use or lease h.4 Residential, urban real estate granted under leasing i) Non-due credit for disability and survival insurance D.L. No. 3500 and credit for individual account balance (2nd group) ii) Life insurance policyholder advance (2nd group) j) International assets k) Credit to assignors from non-due, non-accrued premiums (1st group) l) Credit to assignors from non-due, accrued premiums (1st group) m) Non-accrued acceptance discount n) Endorsable mortgage loan notes 単 ) Banks o ) Short-term fixed-income mutual funds p ) Other financial investments q ) Consumer credit r ) Claims receivable Total Assets Representing Technical Reserves and Equity Assets Representing Uncommitted Equity Shares of closely held companies International assets Non-residential real estate Movable asset investment fund installments Real estate investment fund installments
AUDITED FINANCIAL STATEMENTS
1.081.492 205.278.279
49.341.664 2.099.437 4.249.610 24.359.099 6.249.803 46.047 1.912.315.533
2.644.649 7.373 184.062 28.141.220 131.719
Cash on hand Plant for own use Other real estate investments Software
980.840 1.257.538 129.281
Total Assets Not Representing Technical Reserves and Equity
33.476.682
Total Investments
1.945.792.215
229
AUDITED FINANCIAL STATEMENTS
NOTE 49. RELEVANT EVENTS
230
1) On March 13, 2012 and pursuant to Official UF 50. Circular No. 991 of the Superintendency of - Deloitte were appointed as External Auditors Securities and Insurance, the fact that Ms. Sylvia for the 2012 financial period. Yáñez Moreno assumed the position as Human Resource Manager was reported as a material - Also at this Meeting the decision was made fact. to revoke the current Board of Directors and appoint the following persons. 2) On March 29, 2012, the third Company Regular Members Board of Director Meeting was held, where Maria Catalina Saieh Guzmán the financial statements for the financial period Jorge Andrés Saieh Guzmán ending on December 31, 2011 as reviewed Fernando Siña Gardner by External Auditors were approved, and an Alejandro Ferreiro Yazigi Ordinary Shareholder Meeting was convened Charles Naylor del Rio for April 24, 2012 at 09:30 at the Company’s Francis Lucchesi offices. Bruce Stanforth 3) At an Ordinary Shareholder Meeting held on Alternate Members April 24, 2012, the following agreements were Alvaro Caviedes Barahona made: Pilar Dañobeitía Estades - The Annual Report and Financial Statements for the 2011 financial period were approved. Alvaro Barriga Oliva Felipe Cuadra Campos - It was agreed that Board members were to be Consuelo Gatica remunerated for their duties as follows: MatamalaCharles Naylor del Rio a) Chairman of the Board remuneration: Consuelo Gatica Matamala UF 115 per month. José Tomás Errázuriz Grez b) Regular Board Member remuneration: Carlos Ducci González UF 90 per month. c) Acting Board Member remuneration: UF 15 4) On April 26, 2012 and pursuant to Official per attended session. Circular No. 991 of the Superintendency of d) Remuneration of Board Members who are Securities and Insurance, the fact that, at an part of the Company’s Investment Committee: Ordinary Shareholder Meeting held on April 24, UF 50. 2012 the decision was made to proceed to total e) Remuneration of Board Members who are renovation of the Company’s Board members part of the Company’s Auditing Committee:
AUDITED FINANCIAL STATEMENTS
in accordance with the information provided in that document was reported as a material fact. 5) On May 2, 2012, the Minutes of the Ordinary Shareholder Meeting held on April 24, 2012 was sent to the Superintendency of Securities and Insurance duly signed by the Company’s Chief Executive Officer. 6) At Board of Director Meeting held on May 31, 2012, the subscription of CorpBanca Bank shares was approved, with the Company exercising its preferential purchasing right in face of a capital increase undergone by the Bank. The purpose of the stock subscription was to maintain the Company’s current ownership interest in that banking institution. 7) On October 1, 2012, a material fact, namely that Mr. Alvaro Reyes Bórquez, who held a position as Administration and Finance Manager for the Company, did not longer work for the Company, was reported. 8) On October 18, 2012, an Extraordinary Shareholder Meeting was held, where the decision was made, subject to the approval of the Superintendency of Securities and Insurance, to increase the Company’s capital stock from $127,378,510,653, divided into 681,495 ordinary nominative shares, of the same series, with no nominal value, fully subscribed and paid-in; the amount included $4,781,291,545, corresponding to the revaluation of own capital
as of December 31, 2011 to $151,303,510,653, divided into 818,995 shares, through the issuance of 137,500 shares in the amount of $23,925,000,000, to be subscribed and paidin within 30 days from the date of the SVS resolution approving the capital increase.
231
AUDITED FINANCIAL STATEMENTS
NOTE 50.- REPORT IN RESPONSE TO GENERAL REGULATION NO. 306
232
Accounting Policies The Reserve for Ongoing Risk shall be applied l.-INSURANCE TRANSACTIONS to the main hedges with a maturity of up to 4 a. Premiums years or those with higher terms that may have These correspond to the amount owed to the been submitted by the Company and approved Company by each reinsured party on account by the Superintendency of Securities and of premiums less acceptance discount and Insurance. impairment. In the case of additional hedges, the same criterion shall be applied regardless of the b. Other Assets and Liabilities from Insurance validity of the main hedge. and Reinsurance Contracts The estimation of the Reserve for Ongoing Risk i. Underlying derivatives in insurance contracts shall be carried out using the methodology The Insurance Contracts executed by the indicated in NCG No. 306 for first group Company have no underlying derivatives. insurances or the methodologies submitted by the Company and approved by the SVS, as the ii. Insurance contracts acquired by means of case may be. business combinations or portfolio assignments The Company has no such insurance contracts. ii. Reserve for Private Annuities The technical reserve set up for the annuity iii. Acquisition expenses insurance shall be recorded in accordance with Acquisition expenses are directly recognized current regulations. This reserve must include any under income on an accrual basis. monthly payments that, as of estimation date, are due and have not been paid yet. c. Technical Reserves i. Reserve for Ongoing Risk iii. Reserve for Unexpired Claims This corresponds to the Company’s obligation This corresponds to the reserve for outstanding with insured and reinsured parties originating policies and is equivalent to the difference from premiums from accepted insurance between the present value of future insurance and reinsurance contracts set up to cover benefits to be paid by the insurer and the outstanding risks on financial statement closing present value of the future premiums to be paid date. by the insured party in accordance with current This reserve includes the value of the hedging regulations. cost reserve that must be set up in accordance The value of the hedging cost reserve to be set with current regulations for life insurances with a up in accordance with current regulations for life single investment account. insurances with a single investment account must
AUDITED FINANCIAL STATEMENTS
be recorded in this account. The estimation of the Reserve for Unexpired Claims shall be carried out in accordance with the methodology, technical interest rate, and probability tables indicated in NCG No. 306 or in accordance with the tables submitted by the Company and approved by the Superintendency of Securities and Insurance, as applicable. The Reserve for Unexpired Claims shall be applied to hedges with a validity exceeding 4 years or those subject to shorter periods that may have been submitted by the Company and approved by the Superintendency of Securities and Insurance. In the case of additional hedges, the same criterion shall be applied regardless of the validity of the main hedge. iv. Disability and Survival Insurance (SIS) Reserve The Company has no Insurance Contracts originating, or compelling it to set up, this type of reserve. v. Reserve for Life Annuities The Technical Reserve for pension fund life annuity insurances enforced before January 1, 2012 shall be estimated in accordance with the regulations contained in Official Circular No. 1512 of 2001 and General Regulation NCG No. 318 of the Superintendency of Securities and Insurance and any other instructions effective as of September 1, 2011. Based on this: a) On the date of validity or acceptance of
an insurance policy, the carrying amount of its Base Technical Reserve shall be reflected under liabilities, charged to the “Annuity Cost” income account. b) On financial statement closing date, the Base Technical Reserves for each of the outstanding policies shall be re-estimated. This will be based on actuarial flows as of estimation date and cost rates or sales rates, as applicable. c) On a monthly basis, on the corresponding financial statement closing date, the Financial Reserve shall be determined. Any differences arising between the Base Technical Reserve and the Financial Reserve shall generate adjustments, the effects of which shall be reported under equity account “Reserves for Hedging. d) The change in the Base Technical Reserve shall be recorded in the “Annuity Cost” account. e) In case of outstanding reinsurances, such part of the Base Technical Reserve corresponding to the portion assigned to reinsurers shall be estimated based on the corresponding reinsured liability flows on the date of re-estimation and the Equivalent Cost Rate (CR) or the Selling Rate (SR), as applicable. f) Both the Base Technical Reserve and the Financial Reserve shall be presented in gross terms in the Financial Statements. The amount
AUDITED FINANCIAL STATEMENTS
233
234
corresponding to the assigned reserve shall reinsurance contract, there is a difference be reported as an asset from an assigned between the reinsurance premium and the asset reinsurance. set up as previously indicated, this shall be immediately recognized under income. g) Liability flows shall be determined based on current regulations and, if applicable, e) The estimation of the expected pension fund considering the gradual application of RVflows shall be fully based on the mortality tables 2004, B-2006, and MI-2006 mortality tables established by the Superintendency of Securities in accordance with the gradual recognition and Insurance, with their corresponding mechanism applied by the Company. improvement factors effective as of estimation date. For policies with a validity starting on January For the acceptance of reinsurances or portfolio 1, 2012, the Technical Reserve shall be transfers effective after January 1, 2012 and estimated based on the provisions contained regardless of the underlying policy validity date, in General Regulation NCG No. 318 of the the Technical Reserve shall be estimated without Superintendency of Securities and Insurance for considering matching assessment, discounting such contracts, not considering the Company’s the accepted flows at the lowest interest rate matching assessment: between the MR as of the effective reinsurance contract date and the interest rate implicit a) The rate used for discounting expected in the acceptance of the flows (interest rate pension fund flows shall be the lowest value determined based on the reinsurance premium). between the Market Rate (MR) and the Selling The application of the previous paragraphs Rate (SR) as of policy validity date, as defined in shall be carried out without prejudice to the Title III of Official Circular No. 1512. deduction of the reinsurance assignments of the Technical Reserve set up in order to comply b) Only the Base Technical Reserve shall be with the risk equity and indebtedness limit set up in liabilities, considering the interest requirements established in Decree Law DFL rate established on policy validity date in No. 25 of 1931, which will be subject to the accordance with the previous paragraph. provisions contained in article 20 of such legal text and the specific regulations issued by the c) Flows from life annuity obligations assigned Superintendency of Securities and Insurance. through reinsurance shall not be discounted for the calculation of the Technical Reserve for the vi. Claim Reserve corresponding policies. Assigned flows shall This is the Company’s obligation towards be recognized as an asset from reinsurance, insured and reinsured parties with respect to the determined based on the same interest rate amount of the claims or commitments assumed used for the calculation of the Technical Reserve through insurance policies, for claims occurring for the reinsured policy. and both reported and not reported, including all expenses associated with the settlement that d) If, at the time of the execution of the have affected the risk subscriptions of the insurer
AUDITED FINANCIAL STATEMENTS
entity and have not been paid. is indicated in General Regulation No. 6 of the This reserve must include those payments that, Superintendency of Securities and Insurance. as of estimation date, are due and have not yet Regardless of the risk grouping method used been paid to the insured party. to determine the amount of the Premium Inadequacy Reserve, this is assigned and The Claim Reserve shall be recorded under a reported in the financial statements based on “Claim Reserve” liability account, segregating the FECU branch classification determined the reserve for Reported Claims and the Reserve by the Superintendency of Securities and for Claims Occurring But Not Reported (OYNR) Insurance. on financial statement closing date. ix. Additional Reserve based on Liability The Reported Claim Reserve shall in turn be Adequacy Test classified as follows: The Company conducts a Liability Adequacy Test on each quarterly financial statement (a) Claims Settled But Not Paid closing date in order to assess the adequacy of the reserves set up in accordance with current (b) Claims Settled But Contested by the Insured regulations issued by the Superintendency of Party Securities and Insurance. The test is based on current hypothesis re(c) Claims Under Settlement Process estimations assumed by the Company for estimating cash flows originating from insurance The estimation of the Reserve for Claims contracts, considering insured party options or Occurring But Not Reported shall be based benefits as well as contracted guarantees. on the general standard application method The contract flows indicated in the previous provided for in NCG No. 306 (Incurred Claim paragraph consider at least the flows arising Triangles) or any of the alternative methods from expected claims and direct expenses provided for in the same regulation (Simplified related to settlement thereof, discounting, if Method and Transition Method), or any methods applicable, the future premiums the insured that have been submitted by the Company and party has agreed to pay as part of the approved by the Superintendency of Securities insurance contract. and Insurance, as applicable. The Liability Adequacy Test is conducted considering flows before taxes. vii. Catastrophic Reserve against Earthquakes If, due to the application of this Test, a Technical This is not applicable to Life Insurance Reserve inadequacy is verified, the Company Companies. shall set up an additional Technical Reserve in the statement of income corresponding to the viii. Premium Inadequacy Reserve respective closing date. The Premium Inadequacy Reserve corresponds However, based on the periodical evaluation to the amount obtained by multiplying the of the items analyzed in this Test, the additional Reserve for Ongoing Risk less reinsurance by the Technical Reserve may be reversed in the inadequacy factor. The calculation methodology income statement corresponding to the
AUDITED FINANCIAL STATEMENTS
235
236
respective closing date. total funds transferred to the Company by the The Liability Adequacy Test recognizes the risk contracting party shall be recognized as the assigned to the reinsurer, i.e., when the need insurance premium. to set up an additional Technical Reserve is The deposit component shall be recognized as determined, this is recognized in gross terms a technical reserve denominated “Fund Value under liabilities and the reinsurer participation Reserve” and shall correspond to the Policy under assets. Value of each contract on the reserve estimation When a Premium Inadequacy Test is conducted, date in accordance with the conditions the Company evaluates whether this test established in each contract, without deduction meets the requirements to be considered in of any potential redemption charges. In replacement of the Liability Adequacy Test. If this the case of insurances associated with NCG is so, the latter Test is not required. No. 176 of 2005, neither the technical reserve The Test is applied for groups of contracts associated with the deposit component nor the sharing similar risks and jointly managed as contract premium shall be recognized under part of the same portfolio. Accordingly, both the liabilities. Test and the reserve inadequacy, as the case Concerning the insurance component, the may be, are measured on a portfolio basis. Company shall set up Reserves for Ongoing However, if an inadequacy is verified as a Risk or Reserves for Unexpired Claims, being result of the Test, this is assigned and presented able to apply different criteria with respect to in the financial statements, based on the the main coverage and additional coverages in FECU branch classification determined by the accordance with the relevant type of risk. Superintendency of Securities and Insurance. A reserve gap shall be established for the risk If, in accordance with the Superintendency assumed by the Company on account of term, of Securities and Insurance regulations, the interest rate, currency, and type of instrument gradual recognition of mortality tables for risks, between the fund value reserves and technical reserve calculation is effective, the the investments that back up the reserve. The Liability Adequacy Test does not consider estimation of this reserve shall be based on the differences in reserves accounted for by the instructions issued by NCG No. 306, and such gradual process. Consequently, if an the determined amount shall be recorded inadequacy is verified, an additional reserve in the “Gap Reserve” equity account, as is set up only for the amount exceeding the indicated in Official Circular No. 2022 of the difference in technical reserves accounted for by Superintendency of Securities and Insurance. the gradual process. xi. Other Technical Reserves x. Reserve for Insurances with a Single The reserve for debts with insured parties and Investment Account other reserves set up by the insurance entity In accordance with the instructions issued in in accordance with current regulations and NCG No. 306, the deposit and risk components any additional reserves that must be set up by associated with an insurance with SIA shall be Mutual Fund Companies according to their byaccounted for on a joint basis. Therefore, the laws shall be recorded under this heading.
AUDITED FINANCIAL STATEMENTS
xii. Reinsurer Interest in Technical Reserves of Securities and Insurance, effective on these The Company recognizes reinsurer interest Financial Statement date. in technical reserves on an accrual basis, in accordance with current contracts. 2. Reserve for Ongoing Risk d. Matching (to be reported for policies with 2.1. Exception for a hedging period shorter than validity prior to January 1, 2012) policy validity This value shall be estimated as the difference The Company adhered to the exception between the Base Technical Reserve and the contained in paragraph two, letter b), No. 1, Title Financial Technical Reserve. It shall be applied III of NCG No. 306, introduced through NCG only for policies with validity prior to January 01, No. 320, with respect to considering, for the 2012. purpose of Reserve for Ongoing Risk calculation, the premium hedging and recognition period II.- Technical Reserve Calculation Criteria and when this is shorter than policy validity, Methodology maintaining at least one reserve equivalent to Reserve calculation was carried out based one month of premium or, if longer, the premium on the instructions contained in General equivalent for the grace period stated in the Regulations NCG No. 306 and No. 318 of the policy. Superintendency of Securities and Insurance, issued on April 14, 2011 and September 1, 2011, This is the case for the following insurances: respectively. - Collective life and health insurance policies and collective title insurance policies with a All the assumptions used in calculating reserves validity period equal to or exceeding 1 year are reviewed and updated on a quarterly basis, where premium is monthly calculated based on as applicable. an agreed upon rate over the insured capital amounts for policyholders with coverage valid in For the determination of current Financial the corresponding month. Statements, the Company exercised the following options contained in the - Coverage cost of insurances with SIA. aforementioned regulations: - Policies or Additional Coverages with annual 1. Life Annuities validity with or without an automatic renewal Pursuant to the provisions contained in NCG clause with a payment frequency less than its No. 318, No. 2, the Company applied the validity. instructions in paragraph 2.1 only to policies affective as of January 1, 2012. For life annuity hese products are marketed through Individual, policies effective prior to such date, the reserve Collective, Bank Insurance, and Title Insurance was calculated pursuant to the instructions business lines. provided in Official Circular No. 1512 and other instructions provided by the Superintendency
AUDITED FINANCIAL STATEMENTS
237
238
2.2. Reserve for terms exceeding 4 years 4. Reserve for Claims Occurring But Not Pursuant to the final paragraph of No. 1, Title III Reported (OYNR) of SVS NCG No. 306, the Company informed For the estimation of the OYNR Reserve, the the Superintendency of its decision to apply Company used the standard method generally the calculation of the Reserve for Ongoing applied for all modeled risks. The standard Risk based on terms exceeding 4 years for method corresponds to the method based coverages for which there is no probability table on the development of incurred claims, also registered at the registry of the Superintendency called “Incurred Claim Triangle Method”, whose of Securities and Insurance for the calculation of calculation is indicated in Exhibit 2 to NCG No. Reserves for Unexpired Claims. 306. 2.3. Application Pursuant to the provisions contained in In accordance with the transitory provisions paragraph 3.2, Title II of SVS NCG No. contained in Title VI, NCG No. 306, the new 306, the Company conducted an estimation instructions concerning the setup of the Reserve of OYNR Reserves by product portfolios for Ongoing Risk, set out in No. 1 of Title II of considering the nature of the risks and similar the aforementioned regulation, were applied claim management policies, which resulted only to policies issued or renewed as of January in a branch distribution different from that 1, 2012. established by FECU. 3. Reserve for Unexpired Claims The methodology and criteria applied by Pursuant to paragraph 2.1, Title III of General the Company for weighing and segregating Regulation No. 306, the Superintendency of each FECU branch were presented to the Securities and Insurance, through Official Superintendency of Securities and Insurance Circular No. 10,210 of April 20, 2012, authorized and are based on the distribution of incurred the Company to apply a Reserve for Unexpired claims on Financial Statement date. Claims in the following cases: - Insurances with a single premium associated with credits (consumer credit title insurances), 5. Reserve for Premium Inadequacy regardless of the coverage term (death risk). The Premium Adequacy Test was conducted in accordance with the standard method stated - Individually subscribed insurances with a in Exhibit 1 to NCG No. 306, which is based single or leveled (death risk) premium, marketed on the “Combined Ratio” concept, which relates under an individual or collective policy, without the insurance company technical disbursements a renewal clause and regardless of policy with the recognized premium to address the validity. former, using the 12-month historical information contained in the Financial Statements - Products with a leveled (death risk) premium, immediately prior to the date of determination with premium refund, regardless of policy thereof. validity.
AUDITED FINANCIAL STATEMENTS
The Company performed the premium adequacy analysis considering the branches defined by FECU and identifying within each account the component related to insurances generating a Reserve for Ongoing Risk. Where disbursements are higher than revenues, the Company reports a Premium Inadequacy Reserve additional to the Reserve for Ongoing Risk. III.- SUMMARY OF IMPACT OF NEW RESERVE STANDARDS The impact of the application of the new reserve standards on income and expense accounts, comparing the reserve set up on December 31, 2011 with that set up on January 1, 2012, implied an income loss equivalent to M$ 1,960,019 on account of greater reserve variation.
239
AUDITED FINANCIAL STATEMENTS
The summary of this result by branch and type of reserve is as follows: IFRS IMPLEMENTATION IMPACT AS OF JANUARY 1, 2012 CORPVIDA (Figures in thousands of Chilean pesos)
240
Code
Branch
101 102 103 104 105 106 107 108 109 110 111 112 113 114 150 201 202
Full Individual Life Term Individual Life Insurance Other Insurances with Individual SIA Mixed or Total Individual Private Annuities Total Simple or Deferred Capital Family Protection Individual Disability or Incapacity Insurance Individual Health Insurance Individual Personal Accidents Assistance Individual Title Insurance Individual Mandatory Personal Accident Insurance VPFS Insurances Other individual insurances Full Collective Life Insurance Term Collective Life Insurances
203 204 207 209 210 211 212 214
Mixed or Collective Disability or Incapacity Insurance Collective Disability or Incapacity Insurance Family Protection Collective Health Insurance Collective Personal Accident Insurance Collective Assistance Insurance Collective Title Insurance Insurances with Collective VPFS TOTAL
AUDITED FINANCIAL STATEMENTS
Reserve for Ongoing Risk
Reserve for Unexpired Claims
Fund Value Reserve
OYNR
TSP
Total
TAP
0 0 0 0 0 0 0 45.948 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 -9.653 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 -891 111.224 0 0 0 0 -252 250.257 -13.424 0 0 0 5.421 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 -891 111.224 0 0 0 0 36.043 250.257 -13.424 0 0 0 5.421 0 0
86.233
-36.874
0
-62.687
0
0
-13.328
0 0 0 0 1.800.533 0 391.327 0 2.324.041
0 0 0 0 -349.147 0 -147.720 0 -543.395
0 0 0 0 0 0 0 0 0
0 0 0 -7.333 -9.410 0 -98.949 0 173.956
0 0 0 5.417 0 0 0 0 5.417
0 0 0 0 0 0 0 -1.916 0 1.441.976 0 0 0 144.658 0 0 0 1.960.019
IV.-Premium Inadequacy Test Date Result M$ 30-09-2012 434
Characteristics and Hypotheses for the Calculation Model Used The aforementioned General Regulations NCG No. 306 and No. 318 determine the conduction of a Liability Adequacy Test with the purpose The methodology used corresponds to that of assessing the adequacy of the technical described in Exhibit 1 to NCG No. 306, with the reserves set up as of the closing date of each following considerations: quarterly Financial Statement. 1. For each FECU branch, the premiums, claims, In accordance with the above, when defining and reserves corresponding to the coverages and applying this Test, the Company took into with a Reserve for Ongoing Risk were identified. account the following requirements: 2. Intermediation costs were assigned based on a) To consider generally accepted principles the proportion represented by the Branch Direct on an international level and the IFRS concepts Premium with respect to the Earned Premium for associated with this Test. insurances with a Reserve for Ongoing Risk. b) To use the Company’s estimates with respect 3. In those cases where the application of to mortality and interest rate, i.e., to analyze the NCG No. 306 implied a change to the reserve adequacy of the reserve in accordance with methodology, the opening reserve was rethe Company’s own experience and portfolio estimated for the purpose of recording its characteristics. variation over the period under analysis. c) To consider the options or benefits for 4. Administration Expenses were assigned policyholders and the agreed upon guarantees by FECU branch in accordance with the provided to the former by the Company. Company´s functional expense allocation criteria. d) To recognize the risk assigned to reinsurers for accounting purposes. V.- Liability Adequacy Test For the determination of the Test flows, IFRS 4 criteria were taken as reference; in its paragraph 16 letter (a), these criteria indicate that, as a Date Result M$ minimum requirement, current estimates of all 31-12-2011 contractual cash flows and related cash flows, 31-03-2012 such as settlement costs and cash flows from options and underlying guarantees, must be 30-06-2012 considered. 30-09-2012
AUDITED FINANCIAL STATEMENTS
241
242
For the definition of the technical criteria for this Test, the guidelines contained in International Actuarial Standard of Practice No. 6 (IAS 6) of the International Actuarial Association in relation to liability adequacy were considered. If, due to the application of this Test, a technical reserve inadequacy is verified, the Company shall set up the corresponding additional technical reserve. Otherwise, no adjustments are applied to the technical reserve already set up. Life Annuities Additionally, concerning application of the Test to Life Annuity Reserves, the following criteria were taken into consideration: - In accordance with NCG No. 318, only the setup of an additional technical reserve in the amount exceeding the difference in technical reserves accounted for by the gradual process was considered. - In addition and pursuant to Regulation No. 8,378 of the SVS of April 2, 2012, liability flows from already matched life annuity insurances were discounted using the accrual rate for the Company’s asset portfolio. To discount unmatched liability flows, the profitability rate of a portfolio representative of the new Company’s investments under current market conditions was considered. The methodology for this test is based on the expected present value of pension fund flows and the expense flows associated with their settlement not considering reinsurances. If the result is less than the reserve estimated based on the instructions issued by NCG No. 318, the difference shall be reported as an additional reserve, considering assignments to reinsurers on a proportional basis.
AUDITED FINANCIAL STATEMENTS
Insurances with a Single Investment Account (SIA) The defined test involved calculating expected flows from the contracts in the portfolio under analysis within a horizon of at least 30 years. Contract flows for each period were estimated based on the characteristics of each policy discounting intermediation expenses, paid claims, reserve variations, and maintenance expenses from the agreed upon premiums. If one or more of the projected flows are negative, an additional reserve equivalent to the present value of the deficits so determined shall be reported, using as discount rate the Market Rate informed by the SVS as of reserve setup date. Insurances with Reserves for Unexpired Claims The methodology for this test is based on the expected present value of claim flows plus the expense flows associated with their settlement less premium flows, if applicable. If the result is less than the reserve estimated based on the instructions issued by NCG No. 306, the difference shall be reported as an additional reserve, considering assignments to reinsurers on a proportional basis.
243
AUDITED FINANCIAL STATEMENTS
244
AUDITED FINANCIAL STATEMENTS