Classification of certain items of own funds

(1) Classified in Tier 1 is the probability-weighted average of future cash flows to policyholders and beneficiaries, taking account of the time value of money (expected present value of future cash flows) and using the relevant risk-free interest rate term structure, from the portion of the provision for premium refunds existing on the valuation date that may be used to cover losses and is not allocated to fixed surplus shares, 1. for life insurance, 2. for health insurance conducted in the manner of life insurance, and 3. for accident insurance with premium refund.
(2) Classified in Tier 2 are: 1. letters of credit and guarantees held in trust for the benefit of insurance creditors by an independent trustee and provided by credit institutions authorised under Directive 2006/48/EC, and 2. all future claims that mutual insurance associations founded by shipowners, with variable contribution income, insuring only the risks named in Annex 1, points 6, 12, and 17, may assert against their members by way of a call for supplementary contributions within the following twelve months.