ANNUAL20 REPORT 12 - Confuturo · Legal Counsel Attorney Universidad Adolfo Ibáñez MAURICIO...
Transcript of ANNUAL20 REPORT 12 - Confuturo · Legal Counsel Attorney Universidad Adolfo Ibáñez MAURICIO...
ANNUAL REPORT
2012
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MANAGEMENTBoard of DirectorsOrganization ChartCorporate Governance
4ACTIVITIES AND BUSINESS Life Annuities Individual Life InsurancesMass Delivery Insurances Consumer Credit
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MACROECONOMIC PERFORMANCEEconomic Environment in 2012Investment Portfolio
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THE COMPANYCompany IdentificationOwnership of the CompanyHistorical BackgroundBranch Network
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HUMAN RESOURCE AND DEVELOPMENT AREA
8AUDITED FINANCIAL STATEMENTSIndependent Auditors’ ReportGeneral Balance SheetsCash Flow StatementsReconciliation of Net Result and Operating FlowNotes to the Financial Statements
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BUSINESS SUPPORT AREASCustomer ServiceDigital MediaMarketingOperations and TechnologyComptroller’s Area and Risk ManagementAdministration and Finance
CORPORATE SOCIAL RESPONSIBILITY
4I am pleased to present you with CorpVida’s Annual Report and Financial Statements for the financial period January 1 to December 31, 2012.CorpVida has become one of the most relevant participants in the domestic insurance market, being ranked among the top performers in terms of market share in Life Insurances. The above is the result of a sound and ongoing growth and consolidation process which we will strongly continue pursuing during the coming years. This excellent business result has been achieved thanks to an increase in sales in all the business lines in which we participate, excelling in Life Annuities, with a 27 percent growth, and in Individual Insurances, with a 14 percent increase with respect to the previous year. During the year, we continued working on providing the best service to our customers, incorporating significant improvements into our products, processes, and service and sales channels. We are convinced that only by providing a service of excellence and based on high standards, will we be able to maintain our
LETTER FROM THE CHAIRWOMAN
leading position.Within the financial investment context, the search for new investment alternatives was furthered, increasing our investment in international debt by 14 percent, especially in Latin American fixed-income instruments. As a result of this, we have been able to reduce risk through wider diversification, concurrently managing to increase portfolio returns. On an overall portfolio basis, we attained an exceptional 90 percent increase in the investment product as compared to the previous year. The real estate investment share in our portfolio continues to increase, with concurrent diversification in different asset classes, generating higher returns.There were important changes in the regulatory area, among which the enactment by the Superintendency of Securities and Insurance (SVS) of General Regulation NCG No. 325 deserves special mention. This regulation issues instructions concerning the risk management system applicable to insurance companies as well as creditworthiness evaluation of insurance companies by the SVS, which is a new development in the implementation of the Risk-Based Supervision model. This Board of Directors has addressed these changes with special motivation and interest, by working throughout the year in the different Corporate Governance committees, thereby adhering to the new regulation with strong commitment. I would like to highlight the three big challenges that we have proposed for ourselves as a Company in face of our collaborators. The first one has to do with the generation of actions designed to internalize and strengthen the new
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Company values. These are: Orientation to the Customer, Excellence, Responsibility, Team Work Innovation, and Passion. We have structured this plan into three broad phases: value dissemination in 2012, value internalization in everyday work in 2013, and value strengthening in 2014, and we want them to become part of the Company’s culture and identity.We are endeavoring to improve the workplace. We feel very proud of the progress made during 2012, where we showed substantial improvement in the evaluation made by our collaborators concerning their work environment or climate, with 72 percent in Corporate Vision (18.6 percent improvement with respect to 2011) and 79 percent in Vision of the Area (11 percent improvement with respect to 2011), by applying the “Great Place To Work” methodology. Our challenge is to continue implementing enhancements, with the active involvement of all our teams, the same as we did in 2012. Furthermore, we believe that investment in human capital is highly relevant, and consequently, we provided training and professional development to our collaborators with the aim of improving and strengthening their work competencies. This had a positive impact on the organization’s performance. We provided 1,600 training sessions, i.e., more than 40,600 work hours. Likewise, we benefited 7 of our collaborators with scholarships to pursue technical and university degree programs.During this year, the Company made progress in its commitment to the community and sustainability. We continued all the projects implemented during the previous year, and a number of activities were carried out enabling strengthening of our commitment to culture
dissemination, the environment, and the inclusion of people with cognitive disability. In this area, we were recognized by SENCE-Ministry of Labor and Social Security through the “Recognition as Inclusive Company 2011-2012” award and by the Emplea España and Arando Esperanza Foundations through a recognition award for our “Support to Labor Market Inclusion of People with Disabilities”.Finally, I wish to thank the members of the Board of Directors and all our collaborators and their families, who, in their different roles and responsibilities, assumed the Company’s challenges as their own, contributing each day the best of their knowledge, their skills, and their passion to help our Company become not only a relevant participant in the Insurance market, but also an attractive place to work and share goals every day. I feel proud of being able to rely on a professional team of excellence, and I am certain that, based on the aforementioned, we will continue progressing along a path of growth and development.Sincerely,
María Catalina Saieh GuzmánChairwoman
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MANAGEMENT
“Our values are the foundation for our attitudes and motivations, acting as driving forces and becoming the backbone of our performance.”
THE COMPANY
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THE COMPANY
COMPANY IDENTIFICATION
LEGAL NAMECOMPAÑÍA DE SEGUROS CorpVida S.A.
LEGAL ADDRESSROSARIO NORTE N° 660, PISO 21, LAS CONDES, SANTIAGO CHILE
TELEPHONE / FAX2660 3000 - 2660 3189
WEB SITEwww.CorpVida.cl
TAX NUMBER96.571.890-7
TYPE OF CORPORATIONCLOSELY HELD CORPORATION, subject to special regulations (Law 18,046, Art. 126). The Incorporation Deed, dated November 14, 1989, was witnessed by the Santiago NOTEry Public Mr. Victor Manuel Correa Valenzuela. Its existence was approved pursuant to Exempt Resolution No. 190 of the Superintendency of Securities and Insurance on December 13, 1989.
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THE COMPANY
OWNERSHIP OF THE COMPANY
CORPVIDA SHAREHOLDERSCorpGroup Vida Limitada, Tax Number 76,080,631-5, with 590,695 subscribed and paid-up shares, representing 72.12 percent, and Mass Mutual (Chile) Limitada, Tax Number 76,651,100-7, with 228,300 subscribed and paid-up shares, representing 27.88 percent.
REINSURERSMapfre Re, Hannover Re, RGA Re, Scor, Swiss Re.
AUDITORSDeloitte Touche Tohmatsu Limitada
RISK RATING FIRMS ICR Compañía Clasificadora de Riesgo Ltda. AA (Sept.2012)Feller-Rate Clasificadora de Riesgo Ltda. AA- (June 2012)
INSURANCES Fire (Contents) UF 28,200 Theft UF 28,200 Electronic Equipment UF 55,200 Civil Liability UF 10,000
G.O. Employee Fidelity 24 base remunerationsC.A. Employee Fidelity 24 base remunerations
DIVIDEND POLICYAs regards the dividend policy, the Company is governed by Law 18,046, Article 79.
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LA COMPAÑÍA
HISTORICAL BACKGROUND
Our inception dates back to 1989, when the corporation Compensa Compañía de Seguros de Vida S.A., our first legal name, was created. In 1995, CorpGroup and the U.S. consortium Mass Mutual International incorporated Compañía de Seguros Mass Seguros de Vida S.A.; the following year, they purchased Compensa Compañía de Seguros de Vida S.A., whose name was changed to Compañía de Seguros Vida Corp S.A.With the aim of consolidating its market share, Mass Seguros de Vida S.A. merged with Compañía de Seguros Vida Corp S.A. in 2000, whereby the former was dissolved and the latter became one of the soundest life insurance companies in the country.After the physical merger by mid-2006 of the companies comprising the CorpGroup Holding in its modern corporate building, the decision was made to unify their corporate images in order to strengthen the idea that they are part of a single financial group. And thus, on October 1, 2007, the name of our Company was changed to Compañía de Seguros CorpVida S.A.At the end of 2009, CorpGroup formalized the purchase of ING Chile’s life annuity and mortgage loan note assets within the framework of its business expansion and growth strategy, giving rise to the CorpSeguros S.A. insurance company. The latter was successfully and efficiently incorporated into the Group’s company portfolio, attesting to the Group’s interest in consolidating a leading position in the domestic insurance industry.CorpVida and CorpSeguros comprise one of the
most relevant insurance groups in the country, with more than 340,000 customers and 19 branch offices throughout the country and leading the market with close to US$8 billion in managed assets. As a result of the experience and track record attained over more than 20 years of existence, CorpVida has become a company with an outstanding presence in this business. Its main mission is to ensure the future and tranquility of people, a promise that we can meet because we rely on the commitment and work of a professional team that is highly qualified and motivated to provide to our customers excellence in the consulting, services, and products that they demand from us.
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LA COMPAÑÍA
BRANCH NETWORK 800 22 08 08Fax: 2353 7059www.CorpVida.cl
SANTIAGO
Head Office Rosario Norte 660,Piso 21 - Las Condes
Santiago CentroMiraflores 222, Pisos 4, 5 y 6
REGIONS
Arica7 de Junio 268, of. 820
IquiqueAníbal Pinto 444
AntofagastaSan Martín 2530
CalamaRamírez 1841, of. 201
Copiapó José Joaquín Vallejo 535, of. 404
La Serena Balmaceda 428, Local 1
Viña del Mar Avenida Libertad 758
Rancagua Coronel Santiago Bueras 614, local 8
Curicó Prat 113
Talca Uno Sur 841, Local 5
Chillán Constitución 492, of. 302
Concepción Caupolicán 242
Los Ángeles Colo Colo 411, of. 405
Temuco Manuel Bulnes 645
Valdivia Independencia 521, of. 307
OsornoO’Higgins 485, of. 308
Puerto Montt Benavente 550, of. 605 - 606
Punta ArenasRoca 975, Local 2
RED DE SUCURSALES
“All our achievements, no matter how small, require our effort, commitment, and talent; they don’t come about by magic, they are the result of our passion for what we do.”
MANAGEMENT
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MANAGEMENT
BOARD OF DIRECTORS
MANAGEMENT AS OF DECEMBER 31, 2012
CHAIRWOMAN OF THE BOARDMaría Catalina Saieh Guzmán
VICE CHAIRMAN OF THE BOARDFernando Jorge Siña Gardner
BOARD MEMBERSJorge Andrés Saieh GuzmánAlejandro Ferreiro YazigiBruce StanforthCharles Naylor del RíoFrancis Lucchesi
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MANAGEMENT
CHRISTIAN RODRIGO ABELLO PRIETO Chief Executive Officer Commercial EngineerUniversidad Católica de Chile
ENRIQUE EDUARDO MARGOTTA SAAVEDRAComptrollerAuditing Accountant Universidad Tecnológica Metropolitana
XIMENA ANDREA KAFTANSKI ARANCIBIA Legal CounselAttorneyUniversidad Adolfo Ibáñez
MAURICIO ANTONIO FASCE PINEDA Commercial EngineerUniversidad de Concepción
GUILLERMO ALBERTO OSSES GARCÍA Operations and Technology ManagerCivil EngineerUniversidad de Chile
RAÚL ANTONIO AHUMADA HADDAD Technical ManagerIndustrial Civil EngineerUniversidad Católica de Chile
GERMÁN OSVALDO TAGLE O’ RYAN Investment ManagerCommercial EngineerUniversidad Católica de Chile
SYLVIA YAÑEZ MORENO Human Resource Manager Commercial EngineerUniversidad Católica de Chile
ORGANIZATION CHART
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MANAGEMENT
CORPORATE GOVERNANCE
CorpVida’s Corporate Governance structure faithfully reflects the spirit of its shareholders. It is based on sustained and effective oversight of the Company’s business, appropriate involvement of Board Members in decision-making, and efficient compliance with the regulatory model.
To ensure effective Corporate Governance, the Company has implemented Board and Management Committees:
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BOARD COMMITTEES| GOVERNANCE COMMITTEEThis committee oversees compliance with the Corporate Governance structure and the application of the policies governing each Board Committee.
| HUMAN CAPITAL COMMITTEE This committee oversees the Company’s overall HR function, ensuring compliance with General Dissemination and Communication Policies, both internally and externally, and the application of the provisions contained in the Code of Ethics and Conduct as well as all other policies defined by the Board of Directors pertaining to this area.
| TECHNICAL COMMITTEEThis committee supervises the actuarial function and applies and oversees the implementation of the Pricing, Risk Underwriting, Reserve, and Reinsurance Policies.
| AUDITING COMMITTEE This committee executes and supervises compliance with the Internal and External Auditing Policy and Plan. It is responsible for the evaluation of the performance of external auditors, and executes and supervises compliance with the Risk Management System defined by the Board of Directors. In addition, it oversees the application and management of the Compliance Policy as well as proper application of the Customer Service and Information Policy together with claim and complaint management.
| STRATEGIC DEVELOPMENT COMMITTEEThis committee supervises the implementation of the Company’s Annual Plan defined by the Board of Directors and containing the projected strategic direction and market positioning for the current period.
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CORPORATE GOVERNANCE
| INVESTMENT COMMITTEE This committee determines and applies the Investment and Derivative Policy and the Asset and Liability Management Policy (ALM).
MANAGEMENT COMMITTEES| MANAGERS COMMITTEEThis committee conducts, analyzes, coordinates, receives inquiries, and follows up on the main projects and issues related to the needs and performance of both Company management and the defined strategy.
| TECHNOLOGY COMMITTEEThis committee periodically reviews the status of new developments and establishes priorities in accordance with the Company’s strategy, reviews any incidents and related mitigation actions, and in general, supports the Technology area in all matters under its competence.
| ALM COMMITTEEThis committee proposes actions and ensures that Company asset and liability management is conducted in a coordinated way, within regulatory limits, and in accordance with the Company’s strategic objectives.
| LIFE ANNUITY COMMITTEE This committee analyzes the behavior of Company sales and costs for this line of business, by product and channel, with respect to the budget. It also reviews the behavior of competitors and business main management
variables and reports the status of the main action plans.
| INDIVIDUAL LIFE INSURANCE COMMITTEEThis committee analyzes the behavior of Company sales, revenue, expenses, staff, persistence, and returns for this line of business, by product and channel, with respect to the budget. It reviews the behavior of competitors and business main management variables and reports the status of the main action plans.
| MASS DELIVERY INSURANCE COMMITTEEThis committee analyzes the behavior of Company sales, revenue, and claim risk for this line of business, by sponsor, with respect to the budget. It reviews the behavior of competitors and business main management variables and reports the status of the main action plans.
| CLAIM COMMITTEEThis committee reviews and analyzes all claim cases, based on established and detailed criteria, in order to issue a resolution. It reviews and analyzes the criteria and policies related to claim settlement in order to take the necessary improvement or remedial actions concerning general or particular condition packages or existing settlement standards.
| CUSTOMER AND QUALITY COMMITTEE This committee reviews customer satisfaction
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levels with the Company in relation to competitors and the main customer satisfaction management variables. It analyzes the behavior of Company service indicators with respect to the standards defined for each channel and reports the status of the main action plans
| RISK MANAGEMENT COMMITTEEThis committee develops and proposes Risk Management strategies, policy, and methodologies. Additionally, it proposes the acceptable risk level (risk appetite) to be reviewed and approved by the Board of Directors. It ensures compliance with Integral Risk Management policy, methodology, and responsibilities.
| PRICE COMMITTEEThis committee follows up on key indicators associated with Company sales and its competitive edge. It approves the necessary adjustments to ensure Company objectives are met.
| CONSUMER CREDIT COMMITTEE This committee analyzes the behavior of Company sales, costs, and return for this line of business, with respect to the budget. It reviews the behavior of competitors and business main management variables and reports the status of the main action plans.
The aforementioned committee structure has enabled strengthening and consolidation of Corporate Governance within the Company
through effective oversight of business and activities by the Board of Directors as an essential element for proper Corporate Governance performance. These committees are a channel for the application of Corporate Governance principles and concepts in accordance with the Company’s standing, recognizing the nature, scope, complexity, and profile of its business. Thanks to this Corporate Governance structure, the Company was able during 2012 to develop and complete several projects and achievements, among which the following are outstanding: the creation and updating of a series of Internal Policies and a Code of Conduct, compliance with regulatory requirements, consolidation of the Risk Management System, and materialization of investment projects.
TEAM WORKWhen you act with PASSION, you are an inspiration to others.
MACROECONOMIC PERFORMANCE
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MACROECONOMIC PERFORMANCE
ECONOMIC ENVIRONMENT IN 2012
During 2012, the global economy managed to perform better than initially expected. The instability of the Eurozone during the first half of the year, the meager growth of the US economy, and deceleration in China were not good omens for what would occur further ahead and caused uncertainty among investors on a global level.
However, as the months went by, the doubts haunting markets started to dissipate, and as a result of: the creation and expansion of rescue funds for European countries at risk, the transitory agreement reached at the last moment in the US Congress to avoid the fiscal cliff, and the diversification of the Chinese economy, the year was ended with limited volatility and a promising scenario for the beginning of 2013.
Together with the reelection of President Barack Obama in the United Sates, this economic year was marked by the high liquidity still being injected by the Federal Reserve. This expansive monetary policy will continue in place until substantial changes are observed in the labor market and inflation projections do not exceed 2.5 percent over a period of one or two years.
Furthermore, at the beginning of the year, all attention within the Eurozone was focused on Greece and its potential exit from the euro, but after the financial assistance package received by the Hellenic country, the focus of attention moved towards other economies facing problems. Unemployment rates and excessive public debt now started to become factors of concern in Spain, France, Italy, and Portugal.
In contrast, emerging countries were a surprise in that they became a support and shelter for the world economy. The new growth drive in China brought about an increase in the demand for raw materials, directly and positively impacting on the majority of Latin American economies.
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MACROECONOMIC PERFORMANCE
Chile was outstanding in terms of stability despite the fluctuations faced by the global economy. The GDP growth rate attained around 5.5 percent, the labor market continued to show great dynamism with unemployment levels at 6.2 percent, close to its potential, and annual inflation at 1.5 percent reaffirmed the good times facing the domestic economy. The above was recognized not only locally but also on an international level: the fourth quarter, our country was able to obtain financing in US dollars at a historic rate of 2.33 percent at ten years, and some months later, Standard & Poor’s improved Chile’s long-term debt rating in foreign currency from A+ to AA-. In spite of these good macroeconomic results, the Santiago Stock Exchange index (IPSA) showed low return, with only 3 percent in Chilean pesos.
Finally, the exchange rate was a significant factor during the year. The Chilean peso parity appreciated by almost 8 percent against the US dollar, recording an average below the barrier of CLP$500 and closing even below CLP$480 in December. Concerning the value of commodities that are relevant for Chile, the average copper price was close to US$3.6 per pound. For its part, oil ended the year below US$95 per barrel, mainly affected by a global demand decrease.
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MACROECONOMIC PERFORMANCE
INVESTMENT PORTFOLIO
As of December 31, 2012, Compañía de Seguros CorpVida S.A.’s investment portfolio amounted to approximately UF 84,185,930 (equivalent to US$4 billion).Investment Portfolio as of December 31, 2012:
23,99%Bank Bonds
9,43%Mortgage Bonds
30,56%Corporate Bonds
3,22%Owner’s Equity Invested in Fixed Assets
2,82%Shares
14,18%Real Estate
2,57%Mortgage Loan Notes
8,95%Foreign Assets
4,61%Others (SIA and others)
INVESTMENT PORTFOLIO
2008 2009 2010 2011 2012
Government Bonds 6,84% 5,76% 6,86% 3,55% 1,89%
Bank Bonds 11,88% 15,92% 15,60% 18,78% 23,99%
Mortgage Bonds 19,66% 16,41% 12,01% 9,43% 7,22%
Corporate Bonds 23,44% 29,00% 25,23% 28,46% 30,57%
Owner’s Equity Invested in Fixed Assets
3,18% 4,15% 5,29% 4,25% 3,22%
Shares 2,72% 5,61% 5,11% 3,56% 2,82%
Real Estate 15,61% 10,40% 16,27% 15,74% 14,18%
Mortgage Loan Notes 5,74% 5,20% 4,03% 3,21% 2,57%
Foreign Assets 8,45% 5,31% 4,90% 8,73% 8,95%
Others (SIA and others) 2,47% 2,24% 4,70 4,30% 4,61%
Total 100% 100% 100% 100% 100%
1,89%Government Bonds
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MACROECONOMIC PERFORMANCE
During the year under review, the Life Annuity industry expanded by more than 20 percent. As a result of this explosive sales growth, the search for new and diverse investment opportunities became one of the main challenges in 2012. The domestic market was fairly restricted in terms of new issues which, added to low returns, shifted the investment focus to international markets. The portfolio was significantly increased in this type of asset. The year 2012 was generally highly volatile for global stock markets, for which reason exposure from stocks was limited and quite conservative so as not to assume excessive risks within an environment that was highly unpredictable.
Emerging country currencies appreciated throughout the year, which factor was positively exploited in order to obtain additional returns through active hedging management. Creditworthiness indicators continued to improve in an exceptional and ongoing manner. The Company’s Asset Adequacy Ratio (AAR) remained within the desired levels. and
adequate asset and liability gaps were also maintained. As regards real estate investments, these were focused on assets for lease, with commercial properties being the main objective. In particular, 17 Strip Centers were purchased from Inmobiliaria Avantuen S.A. for more than UF 1 million. Additionally, five plots of land were sold in the city of Antofagasta for the Valle del Mar Project, enabling the generation of a profit reaching UF 334,900 and significantly contributing to CorpVida’s result.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2008 2009 2010 2011 2012
Others (SIA and others)
Foreign Assets
Mortgage Loan Notes
Real Estate
Shares
Owner’s Equity Invested in Fixed Assets
Corporate Bonds
Mortgage Bonds
Bank Bonds
Government Bonds
INNOVATIONWhen you act with PASSION, you are constantly focused on improving.
ACTIVITIES AND BUSINESS
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ACTIVITIES AND BUSINESS
LIFE ANNUITIES
The year 2012 was an excellent year for the Life Annuity market, with revenue reaching UF 71,884,000, representing a 21.9 percent increase with respect to 2011. The average premium in 2012 was UF 2,474, a figure very similar to that for the previous year.
CorpVida attained a 26.9 percent growth in 2012, exceeding market growth, with revenue of UF 9,893,000, and obtained the second place in the corporate ranking, a 13.8 percent market share, and an average premium of UF 2,266.
During the year, CorpVida managed to strengthen the Pension Fund Consultant channel, reaching the projected staff and a productivity exceeding projections, equivalent to 0.95 monthly average deals closed by consultant, thereby demonstrating that the management model used in this channel was appropriate for the achievement of the proposed goals. Additionally, work with this channel was carried out with special emphasis on market opening and development.
Management in relation to the Pension Fund Assistant channel was mainly focused on fidelization, with 60 percent of Assistants having access to the Pension Fund Amount Enquiry and Offer System (SCOMP) in 2012 closing at least one insurance contract with CorpVida during the year. This also considered a price strategy consistent with the needs of this channel.
Expectations for the coming year are for the Life Annuity market to drop by approximately 5 percent with respect to 2012, with a market close to UF 67,000,000 being estimated.
The challenges for CorpVida in 2013 are to consolidate its leadership in the Life Annuity market and attain a 14 percent market share.
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ACTIVITIES AND BUSINESS
INDIVIDUAL LIFE INSURANCES
The year 2012 was a year of adjustments for the Individual Life Insurance market, basically due to the impact of changes to the taxation system applicable to Voluntary Pension Fund Savings (VPFS) instruments with insurance, implemented in December 2011, on VPFS premium revenue.
Notwithstanding the above, CorpVida recorded sustained growth in this line of business, mainly driven by strong increase in flexible insurances with savings subject to the 57 BIS taxation regime and an excellent performance in Private Life Annuity sales.
Premiums from new business transactions issued during the year grew by 14 percent with respect to the previous year, reaching 25 percent if considered based on their value (weighted premium). This significant growth was due to an increase in the proportion of marketed insurance premiums, growing from 23 percent to 28 percent of total premiums (the remaining portion corresponds to savings premiums). Likewise, the significance of flexible insurances grew to the detriment of the weight of VPFS insurances, which, until 2011, concentrated more than 80 percent of sales. The above is very positive, since flexible insurances are more profitable and have higher exit barriers, enabling expectations of an improvement in customer loyalty during the coming years.
It is important to highlight that both sales channels, the Internal Channel (Company’s own sales force) and the External Channel (free agents and brokers), were able to meet their sales goals for the year, with remarkably strong growth in the external agent channel with respect to 2011 (40 percent), consistent with the strategy of continued strengthening of this channel as a way of diversifying insurance delivery through more profitable channels. Another outstanding aspect in annual management was an increase in the sales staff, with a 23 percent increase over the year, achieving a total of nearly 300 insurance and investment executives on a national level. The above was
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attained maintaining premium productivity and increasing policy productivity.
From a qualitative point of view, 2012 marked the beginning of a strategy oriented to training excellent sales executives with the aim of differentiating us from our competitors and providing customers with the best consulting service in matters of protection and financial planning. Along this line, the executive training study plan was updated, and a certification process covering all Individual Life Insurance sales channels was carried out for the first time in CorpVida’s history.
Together with commercial and financial challenges, work will continue during 2013 on developing a competitive edge in this business line, which will be closely linked to the focus on the customer, as the fundamental pillar in CorpVida’s commercial strategy for this year.
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ACTIVITIES AND BUSINESS
MASS DELIVERY INSURANCES
Total revenue from Mass Delivery Insurances in 2012 was CLP$21.1 billion, with premium from the CorpBanca and Banco Condell title insurance business being outstanding, with CLP$17.5 billion.Together with CorpBanca and Banco Condell, the Company had to face big growth challenges arising from insurances associated with bank credit transactions. During 2012, the Bancaseguros (bank insurance) commercial strategies were redesigned, and modifications to products and incentive campaigns were implemented. A new impetus was given to sales results, and the expectations are for this to continue during 2013.
In addition, a new strategic alliance was created with the Nuestros Parques Cemetery Company, with expectations being to achieve consolidation of this business during the coming year.Expectations for 2013 are to continue with the development of an interesting supply of mass delivery insurances marketed mainly through the companies that are part of the Group, taking advantage of the excellent profitability results that may be attained by both parties.
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ACTIVITIES AND BUSINESS
Following the previous year’s trend, during 2012 the Company once again showed an outstanding performance in the placement of Consumer Credits to pensioners, exceeding all historical sales levels for this product in terms of both the total amount placed, net sales, and number of transactions. Accordingly, sales levels for the year reached a net placement amount of UF 155,949, with a total of 6,192 transactions, which represented increases as remarkable as 34 percent and 23 percent, respectively, as compared to 2011.
Important regulatory changes once again affected Consumer Credits in 2012. These changes were introduced by the regulatory authority through the so-called Financial SERNAC Law, a law aimed at providing customers with greater access to information both during the product quotation process and during the entire product validity period. Over the year, the Company had to introduce important changes to its operational and commercial systems in order to successfully adapt them to the new regulations.Among the actions carried out during 2012, the preparation of an internal document denominated “Our View of Consumer Credits” deserves special mention. This was distributed to all the persons in charge of this product marketing and customer service, and establishes the principles and values that must govern the relationship with customers in connection to this product.
CONSUMER CREDIT
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ACTIVITIES AND BUSINESS
RESPONSIBILITYWhen you act with PASSION, you are committed to your own decisions.
BUSINESS SUPPORT AREAS
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BUSINESS SUPPORT AREAS
CUSTOMER SERVICE
The Customer Service area was characterized by the enhancement of its professional team of 14 people at the Call Center and the Metropolitan Region branch office, together with the consolidation of the telephone, direct, and remote service technological platforms.Within this consolidation process, one of the main areas developed was the implementation of an appropriate employee training study plan throughout the year. This enabled the delivery of improved decision-making tools at contact points, especially at the Call Center.
Another primary focus was the implementation and follow-up on Individual Life Insurance and Life Annuity customer satisfaction levels through monthly assessments of customer satisfaction. These assessments were carried out by Ipsos, a company specializing in market surveys and quality models, and covered samples consisting of customers who visited the Miraflores branch office or called the Call Center so as to assess the service received by these customers. Based on these surveys, the more poorly assessed attributes could be identified, to subsequently generate actions towards their improvement. The main examples of these actions are the definition of new service protocols for the Call Center and the appointment of specialized service executives per line of business for each service channel. In addition to the above, CorpVida participated for the second consecutive year in an annual syndicated survey for the Individual Life Insurance product to obtain a benchmark for the insurance industry and its most relevant competitors in relation to customer satisfaction and loyalty. Furthermore, work was continued in the consolidation of traditional indicators for customer service assessment.
The Call Center unit is comprised of five inbound positions and answers calls from multi-company and multi-product customers. In addition, it has two outbound positions for customer welcome calls and other commercial campaigns. During 2012, a call recording technology was incorporated in this area. This enabled increased
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BUSINESS SUPPORT AREAS
monitoring of customer service as well as the possibility of online listening to calls. This unit answered a monthly average exceeding 3,800 total calls, with an actual 3.5 percent abandonment rate and a 93 percent service level (calls answered within 10 seconds), largely exceeding the goals defined for this year (5 percent and 85 percent respectively).
The main Direct Service unit is the branch located on Miraflores street, 6th floor, which has six positions for catering to multi-company and multi-product customers. Its Total Pack platform enabled ongoing online monitoring of calls handled, service and waiting times, abandonment rates and service levels, meeting at the end of the year the goals proposed for this unit (2 percent abandonment rate and 87 percent service level). During 2012, this follow-up was also carried out for the Viña del Mar and Concepción branches.
The year 2012 was an excellent year for the sale of Consumer Credits by the Miraflores Direct Service executive team, with 134 percent over-compliance with the annual loan goal, placing UF 32,099 in loans to retirees. In this way, an excellent and economical financing alternative for retirees continued to be integrated into service management.
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BUSINESS SUPPORT AREAS
DIGITAL MEDIA
In order to differentiate us in the market through a digital service platform highly valued by customers and non-customers, a new corporate web page was developed towards the end of the year, with a value proposal based on providing insurance contents and pension fund consulting in a simple, professional, modern, and close manner.
Its design and construction convey its essence: “Make It and Say It Simply”, providing simple and direct browsing under modern graphic design standards, empathy and user-friendly language, and a clean content structure. It is a site conceived for providing adaptability to multiple devices and improving SEO positioning, multi-browser support, and flexibility to adapt to new web development technologies.
During this initial phase, this new public site will enable current and potential customers to become acquainted with the Company and its range of products and solutions available to them together with other online financial and pension fund consulting tools, interactive simulators, and several topics of interest.
Likewise, the construction of a new private portal for customers was initiated in 2012. This will provide customers with access to detailed information about their policies, the evolution of their savings, premium payment statements, and claim reporting, among other multiple post-sale services, and will be launched during the first quarter of 2013.
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BUSINESS SUPPORT AREAS
I HAVE NO FEAR AN INNOVATIVE CAMPAIGN…
In order to further our trademark positioning as well as advertise our wide range of products, the selected strategy this year was one focused on reaching our target audience through a different message, with high visual impact and easily remembered. In this way and together with the Dittborn & Unzueta agency, a new and innovative concept was designed with the aim of disseminating the idea that CorpVida offers solutions to the protection needs of its target audience by means of its product supply, such as Life Insurances, VPFS, or Life Annuities.
The campaign was developed under the concept “Fears End When You Feel Safe”, where each one of the graphical pieces invited customers to access the official campaign site www.notengomiedo.cl in a ludic, recreational manner. Once at the site, the customer could “live an experience” through a video application that could be personalized and, the same as the rest of the contents in the site, enabled the dissemination of the message through social networks.
Accordingly, the dissemination plan for this advertising campaign relied on the digital world, as central platform, through mass media such as Facebook, Twitter, and YouTube, among others, in addition to traditional advertising via broadcast TV, cable TV, press releases, billboards, subway advertisements, and radio. In this way, the message could be disseminated, and there were a high number of hits to the campaign site.
MARKETING
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BUSINESS SUPPORT AREAS
OPERATIONS AND TECHNOLOGY
| OPERATIONS In Traditional Insurances, CorpVida continued working on the implementation of regulatory changes in line with the new Capital Market law, which mainly affected VPFS products. In addition, regulations related to the Financial SERNAC (National Consumer Service) were implemented, mainly focused on Bancaseguros and Mass Delivery Insurance Products. The Company also worked on complying with the resolutions passed by the Self-Regulation Council of the Chilean Insurance Company Association, whose purpose is to provide and ensure service to life insurance beneficiaries by efficiently managing indemnity payment.
Concerning ongoing process improvement, the Individual Life Insurance policy collection and revenue process was reviewed and optimized in order to ensure the quality and timeliness of this service. Furthermore, in conjunction with the Commercial and Technical areas, the risk underwriting process was reviewed, generating modifications aimed at improving this process timeliness (fast-track) and efficiency.
During the second semester of 2012, the implementation of a new Integral Technological Platform for Traditional Insurances was implemented, including Individual Life Insurances, Bancaseguros, and Title Insurances. This will enable efficient management of all Traditional Insurance products and the delivery of a service of excellence to our customers through the generation
of products in a timely manner (time-to-market) and improvement of collaborator management. This project involved all CorpVida’s management areas.
During the last quarter, CorpVida worked jointly with the CorpBanca Insurance Broker in order to consolidate the mass delivery insurance sales channel. As a result, new products, such as Salud Garantizada (Guaranteed Health) and Vida Propia (Own Life), were marketed during the quarter.
The Life Annuity Operations–Pension Fund Insurance Operations area strongly focused its activities on internal and external customers and started the year by administering the satisfaction survey denominated “The Voice of the Internal Customer”, addressed to the Sales and Front areas, obtaining 73 percent approval on the service rendered. In addition, in order to strengthen the autonomy and knowledge of the service area in terms of customer service, it developed and launched the “Improve your Knowledge” program, consisting of e-learning training delivered by each owner of the operational process. A bulletin denominated “Más Cerca de Ti” (Closer to You) was created, consisting of a personalized email as a direct, single, and simple channel for the sales and service area, where new matters pertaining to the regulatory and operational areas are communicated.
A Panel of Monitoring Indicators was designed for critical processes, using the services agreements
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BUSINESS SUPPORT AREAS
as basis, by monthly evaluating deviations and implementing improvement action plans.In the regulatory area, the 2 percent health bonus for retirees (Law No. 20,531) was implemented.
This included changes in both pension fund payment channels and coordination with the different supervisory agencies that regulate the Life Annuity product. In addition, an Electronic Insurance Policy was implemented, affecting the entire social security market, Insurance Companies, and Pension Fund Management Companies (AFPs). This new system relies on electronic transmission of information from the Company to the AFP and replaces the issuance of printed insurance policies in accordance with General Regulation No. 43. This innovation implied direct training addressed to the commercial area concerning this new issuance process. Along this same line, electronic transmission of Family Allowance fund reporting to the Superintendency of Social Security (Circular Letter No. 2857) was implemented as well as a new Insurance Inquiry Information System, via WEB Services (Law No. 20,552). A reply to Circular No. 2062 was delivered, requesting matching of the entire customer base with the Civil Registry through a routing process, including both current and non-current customers, in order to regularize pension fund deviations
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BUSINESS SUPPORT AREAS
| TECHNOLOGYDuring 2012, the Technology Management area furthered the process of consolidation of the structure defined in order to provide quality Technological Services to all the organization. As part of this process, the Development Sub-Management created the Front Systems area, thereby implementing a structure oriented to the development of new applications and evolutionary support to all the systems that provide services to final customers, regardless of the involved line of business. This was aimed at allowing strong focus on and high efficiency in response times to customer needs.
Additionally, the Development Sub-Management consolidated the application of systems development and maintenance methodologies, by applying them to all the projects that were addressed in the area. As part of the projects undertaken during the year, the new Company web page, with a focus on user-friendliness for customers, stands out as does the application of regulations related to VPFS and Financial SERNAC, Life Annuity electronic polices, and International Financial Reporting Standards (IFRS).
For its part, the Technological Platform Sub-Management consolidated its User Support and Technological Infrastructure areas at the service of the entire Company. For this, it developed a remarkable application based on the best practices in the market for this type of activity,
along with the creation of service agreements (SLA – Service Level Agreement) with critical business areas, thereby ensuring response times consistent with the business needs.
As part of the continuous improvement of the services offered by the Technological Platform Sub-Management, renovation and risk mitigation projects were designed to enhance the estimation, communication, and contingency infrastructure providing support to critical Company business processes. This ensures operational continuity and the satisfaction of internal and external customers.
| COMPTROLLER’S AREA AND RISK MANAGEMENTDuring 2012, a number of initiatives were implemented with the aim of promoting substantial improvement in Risk Management.
Together with Corporate Governance, internal control, operational management, and the implementation of N.C.G. No. 325 relating to the Risk Management System, these initiatives enabled strengthening of the pillars supporting Risk-Based Supervision.
Likewise, within the internal regulatory framework, this unit focused its efforts on formalizing and enhancing a number of initiatives oriented to introducing an operational shift from a vision relying on regulation-based supervision towards risk-based supervision.Concerning Control, the focus during the
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BUSINESS SUPPORT AREAS
year was mainly oriented to maintaining an adequate internal control level and focusing audits on key Company processes in order to keep ongoing track of the status of our operations and performance.
| ADMINISTRATION AND FINANCE MANAGEMENTOne of the most relevant projects conducted by the Administration and Finance Management throughout 2012 was the implementation of International Financial Reporting Standards (IFRS). As planned by the Company´s senior management, the Accounting Management area applied the new Accounting and Financial Reporting regulations for Insurance Companies.
In addition and as part of the implementation of IFRS procedures, the Risk Sub-Management implemented an asset impairment policy, consisting of proactive determination through a scoring system of eventual decreases in the value of an asset or a group of financial assets in the portfolio in face of events having a probable impact on future cash flows.
Moreover, throughout 2012, the Credit Risk area significantly enhanced its evaluation and follow-up procedures for international bonds and local real estate investments. This was implemented along with a more active foreign investment strategy and a growing local real estate market.
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MANAGEMENT
PASSIONWhen you act with PASSION, your energy outstands.
HUMAN RESOURCE AND DEVELOPMENT AREA
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HUMAN RESOURCE AND DEVELOPMENT AREA
HUMAN RESOURCE AND DEVELOPMENT AREA
The Human Resource Management was created in April 2012 as an independent structure for CorpVida, with the aim of providing internal customers a service that is more personalized and in line with the challenges faced by the Company.
This Management area is comprised of six functional areas: Development and Selection Sub-Management, Compensations and Processes Sub-Management, Corporate Benefits and Healthy Life Sub-Management, Training Area, Internal Communications Area, and Risk Prevention Area, all of which cater to 683 Collaborators, of which 69 percent are women and 31 percent are men.
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HUMAN RESOURCE AND DEVELOPMENT AREA
One of the most important milestones for the Organizational Development area was the surveying, analysis, and establishment of new Corporate Values for the Company. This work was aimed at identifying those values representative of the new challenges facing the Company and driving action. The six new Company values are: Orientation to the Customer, Excellence, Innovation, Team Work, Responsibility, and Passion.
In November, the official launching of a Value Campaign was carried out on a national level under the slogan “CorpVida is YOURS. A passion for what you do”, and the main guidelines of what values represent and how they must be put into practice in our daily work life were provided. During December, together with the Internal Communications area, this Sub-Management conducted a Strategic Alignment workshop, where the main Company leaders were sensitized and motivated to put corporate principles into practice in conjunction with their teams.
During 2012, 266 new collaborators were hired, of which 180 are part of the commercial teams and the remaining 86 percent correspond to different positions in the other Company management areas. Moreover, 16 collaborators were promoted, which attests to the conviction that there is internal talent and to a commitment to the professional development of the Company’s human capital.
DEVELOPMENT AND SELECTION SUB-MANAGEMENT
Another relevant milestone led by this area was the selection of two young persons with cognitive disability (Support Administrative Employees), which action was part of the Work Inclusion Program.
Strong focus was place on the Work Climate. The “2012 Climate: Be the Best, a Matter of Attitude” program was implemented during the year. The purpose of this program was to motivate participatory work among collaborators to identify improvement focuses in their areas and to proactively work on them. At the same time, corporate actions were developed oriented to improving overall climate indicators such as leadership, communications, training, and benefits. In December 2012, the Great Place to Work survey was applied once again, with results showing 72 percent satisfaction with respect to the Company and 79 percent with respect to the area. The results were significantly better than those obtained in 2011, with an 18 percent increase in Corporate Vision and 11 percent in Vision of the Area.
Concerning the Performance Management process, in April 2012 the Bottom-Up Evaluation was carried out for the first time, and personalized consulting was provided to all managers to assist them in more comprehensively analyzing their results and understanding them in a constructive way. Along this same line, those managers with the lowest
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HUMAN RESOURCE AND DEVELOPMENT AREA
results received specialized support in generating and monitoring their improvement plans. During the Intermediate Evaluation phase, a Self-Evaluation was incorporated for the first time as a way of starting to generate a reflexive and proactive view of each one’s own performance. During the annual evaluation period, which started in December 2012, a Self-Evaluation, a Bottom-Up Evaluation, and a Top-Down Evaluation were integrated into the same process in order to objectify and enrich this process as much as possible as well as to motivate a constructive and effective feedback discussion.
As for Leadership, the first steps were taken in order to strengthen managers in their role as people leaders, communicators, and managers of a positive work climate. Accordingly, together with the Communications area, a special communication medium for managers, denominated “The Leader’s Path”, was developed.
The commercial area progressed along this line and implemented the “Leadership Path” program, through which Life Annuity Agents, Team Heads, and Directors completed a diagnosis and implemented very concrete actions aimed at enabling their respective channels to obtain profitable business results, but with a highly marked emphasis on best leadership and team development practices.
Likewise, formal training concerning skills for effective feedback was developed oriented towards all Company managers.
49
HUMAN RESOURCE AND DEVELOPMENT AREA
COMPENSATIONS AND PROCESSES SUB-MANAGEMENT
One of the most important projects consisted of insourcing remuneration service and payment through a special system (Oracle Personnel and Remuneration Administration System), which personalizes customer service, improves response times, and promotes information control and safety.
The Company is actively interested in maintaining competitive compensations and updated market data; therefore, CorpVida once again participated in a salary survey together with other companies in the insurance business.
In addition, all job descriptions were reevaluated. This process consisted of a review and validation of job descriptions jointly with personnel assigned to the position as well as the relevant supervisor, with the aim of assessing contribution to business results to subsequently evaluate and value each job description (using the Hay Group job evaluation method).
Furthermore, a survey was carried out during the first semester with the purpose of reviewing vacation day balances, which impact on both the quality of life of collaborators and business results (due to provisions) for collaborators to design action plans, as required.
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HUMAN RESOURCE AND DEVELOPMENT AREA
CORPORATE BENEFITS AND HEALTHY LIFE SUB-MANAGEMENT
The Corporate Benefits and Healthy Life Sub-Management was created this year, focused on improvement of collaborators’ quality of life, considering a wide range of benefits, agreements, and activities, all aimed at generating a company value supply.
One of the most relevant actions was to respond to a desire of collaborators, namely the implementation of a family activity centered on their children. Accordingly, the first Family Celebration was carried out at the Mampato amusement park in November, with the attendance of collaborators from Santiago and the Viña del Mar and Rancagua branches.
For its part, concerning Corporate Recognition, the bases for Corporate Recognition Awards were redefined in order to align these with the business strategy.
From a Healthy Life perspective, several activities were designed with the aim of promoting companionship and integration among collaborators. In addition, CorpVida once again participated with great success in the Insurance Business Olympics, organized every year by the Chilean Insurance Company Association.
Among recreational and family activities, the following initiatives were carried out: Fun Vacation Program (for collaborators’ children during their winter holidays), Independence Day celebration, and Company anniversary, among others.
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HUMAN RESOURCE AND DEVELOPMENT AREA
TRAINING AREA
Training activities within the Company faced significant challenges during 2012 along three fundamental axes: Corporate Training, Technical Training, and Commercial Training.
The purpose of Corporate Training was to develop and strengthen the Organization’s culture. For this purpose, workshops were defined by job levels (administrative personnel, professionals, and managers).
During the year, Corporate Induction activities were carried out on a monthly basis, with the purpose of supporting the integration of new Company collaborators. This was made possible by the commitment and active involvement of managers, who made presentations on different topics such as: the Financial Group and CorpVida’s history, culture, values, product lines, and most relevant challenges, among others.
The Technical Training plan derived from the needs detection process, which was implemented with each area manager and was focused on reducing gaps by strengthening the performance of each collaborator.
Concerning Commercial Training actions, from the beginning of the year, training was provided on a national level to the entire Individual Life Insurance Management with respect to the new CorpFuturo product, which is associated with the 57 BIS tax benefit.
Another important landmark was the implementation of a learning Certification Plan for the Individual Life Insurance Management operation, whose purpose was to launch a certification culture relying on well-prepared Insurance Consultants, instrumental in strengthening relationships with customers. This time, 276 collaborators were certified, with an overall result of 76 percent.
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HUMAN RESOURCE AND DEVELOPMENT AREA
INTERNAL COMMUNICATIONS AREA
At the beginning of 2012, a new Intranet was launched, characterized by renewed design, more well-structured information, and improved web browsability.
Additionally and with the purpose of supporting the Leadership Program implemented by the Organizational Development area, a special, monthly communication medium for managers was created in order to strengthen leaders in their management role, aligning the latter with the strategic plan.
The Internal Communications area also led the development and implementation of the communications campaign denominated “YOURS - A passion for what to do”, where the new Company values were communicated.
During the year, support was provided to the different Company areas through communication media, for them to provide information to collaborators about milestones, activities, and any other relevant issue. In addition, internal Company events were conceptualized and organized.
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HUMAN RESOURCE AND DEVELOPMENT AREA
RISK PREVENTION AREA
The provision to collaborators of the knowledge necessary to create a preventive culture was especially noteworthy during 2012. To achieve the above, emergency plans were implemented, informing work-related risks. In addition, preventive training sessions were carried out using a methodology centered on the development of skills from practical experience (proper management and use of fire extinguishers, Heimlich Maneuver, Cardiorespiratory Resuscitation, among others).
The result of the work carried out by the area was reflected in a reduction of accident rate indicators (16 percent less than in 2011), with ongoing monitoring of claims and always maintaining the Company below the industry average.
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MANAGEMENT
EXCELLENCEWhen you act with PASSION, you care about those details that make the difference.
CORPORATE SOCIAL RESPONSIBILITY
7
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CORPORATE SOCIAL RESPONSIBILITY
HUMAN RESOURCE AND DEVELOPMENT AREA
CorpVida has an integrated vision harmonizing economic and sustainable business development with a commitment to environmental protection and the wellbeing of customers, collaborators, suppliers, and the community as a whole.
During 2012, the Company made progress in the development of its relationship with social responsibility and sustainability. The main challenge consisted in giving continuity to all the projects implemented during the previous year, for which a number of activities enabling reinforcement of the commitment to culture dissemination, the inclusion of people with cognitive disability, the environment, and all the groups of interest were implemented. This commitment was recognized by the Ministry of Labor and Social Security and the Arando Esperanza Foundation by their presenting CorpVida with two awards, the “Recognition as Inclusive Company 2011-2012” and the “Recognition for its Support to Labor Market Inclusion of People with Disabilities”.
| ENVIRONMENTThe Company participated for the first time – together with other Group companies, Recycla Chile, and the Ministry of the Environment – in the celebration of National Recycling Day. To celebrate this day, several communication campaigns about the impact of electronic waste on the environment and the benefits of the use of renewable energies were implemented, in addition to the placement of containers for electronic waste collection. | CUSTOMERSThis year, the aim was to incorporate customers into the Company’s CSR activities and make them aware of the impact generated by them. By means of an electronic Christmas card, customers were invited to construct a better, more friendly, and more inclusive world as well as to share their own dreams, thereby promoting ongoing dialogue over time.
| COLLABORATORSCollaborators are the main engine driving our Company’s compliance with defined objectives, for which this year CorpVida focused on developing corporate volunteer activities strengthening the feeling that one is performing work that is relevant for the successful and sustainable result of the business, while at the same time, contributes to the community’s wellbeing. Accordingly, CorpVida collaborators invited young people from the Corporación Seguir Creciendo Foundation to visit its offices, to participate in painting and dancing
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CORPORATE SOCIAL RESPONSIBILITY
activities, and to share a delicious lunch, especially prepared for the occasion in the corporate dinning hall. Furthermore, CorpVida continued with its work inclusion program, whereby two new collaborators with cognitive disability were hired in 2012. They are currently working at the Miraflores branch.
| SUPPLIERSTo offer financial products of excellence, it is necessary to rely on reputable suppliers, both in terms of the quality of the products and services they offer and integrity in providing them. CorpVida promotes good practices and fosters management of the social and environmental impacts of its activities.
| COMMUNITYThe Company’s commitment to the community spans the cultural, social, and sports spheres. CorpVida continued to provide support to the CorpArtes and Descúbreme Foundations, which enabled collaborators and their families to take part in the different artistic activities and exhibitions implemented, such as “Árbol de los Sueños” (Dream Tree), the “Solidarity Month”, and the celebration of a “Christmas with Sense”.
Along this line and to promote the Healthy Life Plan, an “Inclusive Soccer” game was organized during 2012. This was a sports activity in which collaborators could take part in a demanding training session and a contested game with young people from the Amigos por Siempre Foundation.
Likewise, the support for the Corporación Seguir Creciendo Foundation was extended through the incorporation at the Miraflores branch of the sale of products made by the young people with cognitive disability who are members of this foundation.
CUSTOMER ORIENTATIONWhen you act with PASSION, you run the risk.
AUDITED FINANCIAL STATEMENTS
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AUDITED FINANCIAL STATEMENTS
To the Shareholders and Board Members ofCompañía 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.
Management’s Responsibility for the Financial StatementsThe 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
INDEPENDENT AUDITORS’ REPORT
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.
OpinionIn 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
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AUDITED FINANCIAL STATEMENTS
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 InformationOur 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.
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AUDITED FINANCIAL STATEMENTS
Juan Carlos Jara M.
February 28, 2013Santiago, Chile
Other Matters: New Accounting StandardsAs of January 1, 2012, Compañía 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 first-time 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.
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AUDITED FINANCIAL STATEMENTS
64
AUDITED FINANCIAL STATEMENTS
STATEMENT OF FINANCIAL POSITION
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 6.943.880
5.11.20.00 Financial Assets at Fair Value 119.322.227
5.11.30.00 Financial Assets at Amortized Cost 1.450.709.225
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 87.521.547
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 115.177.707
5.12.30.00 Properties, Plant, and Equipment for Own Use 1.304.652
5.12.31.00 Properties for Own Use 47.117
5.12.32.00 Plant and Equipment for Own Use 1.257.535
5.13.00.00 NON-CURRENT ASSETS HELD FOR SALE 0
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AUDITED FINANCIAL STATEMENTS
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 240.275
5.14.12.10 Claims Receivable from Reinsurers 46.045
5.14.12.20 Premiums Receivable from Accepted Reinsurances 0
5.14.12.30 Assets from Non-Proportional Reinsurances 193.196
5.14.12.40 Other Debtors from Reinsurance Transactions 1.034
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 41.430.770
5.14.21.00 Reinsurance Interest in Reserve for Ongoing Risks 0
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 143.014
5.14.25.00 Reinsurance Interest in Reserve for Claims 30.150
5.14.26.00 Reinsurance Interest in Other Technical Reserves 0
5.15.00.00 OTHER ASSETS 52.753.666
5.15.10.00 Intangible Assets 1.660.727
5.15.11.00 Goodwill 0
5.15.12.00 Intangible Assets Other than Goodwill 1.660.727
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AUDITED FINANCIAL STATEMENTS
STATEMENT OF FINANCIAL POSITION
5.15.20.00 Taxes Receivable 5.889.815
5.15.21.00 Accounts Receivable for Current Taxes 711.355
5.15.22.00 Assets from Deferred Taxes 5.178.460
5.15.30.00 Other Assets 45.203.124
5.15.31.00 Personnel Debts 494.081
5.15.32.00 Accounts Receivable from Brokers 235.115
5.15.33.00 Related Debtors 6.152.911
5.15.34.00 Prepaid Expenses 24.049
5.15.35.00 Other Assets 38.296.968
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 35.934.587
5.21.20.00 NON-CURRENT LIABILITIES HELD FOR SALE 0
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 2.697.029
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 0
5.21.31.30 Reserve for Unexpired Claims 15.873.108
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AUDITED FINANCIAL STATEMENTS
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 0
5.21.31.80 Reserve for Premium Inadequacy 5.143
5.21.31.90 Other Technical Reserves 0
5.21.32.00 Debts from Insurance Transactions 363.424
5.21.32.10 Debts with Insured Parties 0
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 13.475.883
5.21.41.00 Provisions 55.961
5.21.42.00 Other Liabilities 13.419.922
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 0
5.21.42.20 Debts with Related Parties 2.217.402
5.21.42.30 Debts with Brokers 35.226
5.21.42.40 Debts with Personnel 2.556.338
5.21.42.50 Anticipated Revenue 0
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AUDITED FINANCIAL STATEMENTS
5.21.42.60 Other Non-Financial Liabilities 8.163.087
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 2.238.068
5.22.33.00 (Dividends) 0
5.22.40.00 Other Adjustments 0
STATEMENT OF FINANCIAL POSITION
69
AUDITED FINANCIAL STATEMENTS
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 -21.071.051
5.31.12.10 Change in Reserve for Ongoing Risks -1.851.124
5.31.12.20 Change in Reserve for Unexpired Claims -3.712.558
5.31.12.30 Change in Fund Value Reserve -15.502.226
5.31.12.40 Change in Catastrophic Reserve against Earthquakes 0
5.31.12.50 Change in Reserve for Premium Inadequacy -5.143
5.31.12.60 Change in Other Technical Reserves 0
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 -294.903.045
5.31.14.10 Direct Annuities -297.275.179
5.31.14.20 Assigned Annuities 2.372.134
5.31.14.30 Accepted Annuities 0
5.31.15.00 Intermediation Income -16.756.006
70
AUDITED FINANCIAL STATEMENTS
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 -751.038
5.31.17.00 Medical Expenses -63.351
5.31.18.00 Insurance Impairment -690.160
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 7.832
5.31.32.20 Financial Investments -11.565.568
5.31.33.00 Net Income from Accrued Investments 75.385.219
5.31.33.10 Real Estate Investments 7.255.274
5.31.33.20 Financial Investments 69.434.226
5.31.33.30 Depreciation -1.264.669
5.31.33.40 Management Expenses -39.612
5.31.34.00 Net Income from Investments for Single Investment Account Insurances
2.733.991
5.31.35.00 Investment Impairment 171.991
STATEMENT OF COMPREHENSIVE INCOME (CONTINUED)
71
AUDITED FINANCIAL STATEMENTS
5.31.40.00 TECHNICAL INCOME FROM INSURANCES (CM + II + AC) 8.440.428
5.31.50.00 OTHER INCOME AND EXPENSES -123.760
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 -3.840.208
5.31.70.00 Income from Continuous Transactions Before Income Tax 3.303.551
5.31.80.00 Profit (Loss) from Discontinuous Transactions and Assets Available for Sale (less Tax)
0
5.31.90.00 Income Tax -1.065.483
5.31.00.00 TOTAL INCOME FOR THE PERIOD 2.238.068
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 0
5.30.00.00 TOTAL COMPREHENSIVE INCOME 2.238.068
STATEMENT OF COMPREHENSIVE INCOME (CONTINUED)
72
AUDITED FINANCIAL STATEMENTS
Capital Reserves Retained Earnings Other Adjustments
Paid-In
Surplus on Stock Price
Reserve for H
edging A
djustment
Reserve for Gap in
SIA Insurances
Other Reserves
Retained Earnings Previous Periods
Income for the
Period
Income from
Property, Plant, and Equipm
ent A
ssessment
Income from
Financial A
ssets
Income from
Cash
Flow H
edging
Other Incom
e w
ith Adjustm
ent to Shareholders’ Equity
Total
8.11.00.00 Initial Shareholders’ Equity Before Adjustments 127.378.510 400.180 11.748.904 -12.709 0 107.650 -21.254.083 118.368.452
8.12.00.00 Previous Period Adjustments -738.638 -738.638
8.10.00.00 Shareholders’ Equity at beginning of Period 127.378.510 400.180 11.748.904 -12.709 0 -630.988 -21.254.083 0 0 0 0 117.629.814
8.20.00.00 Comprehensive Income 0 0 0 0 0 -21.254.083 23.492.151 0 0 0 0 2.238.068
8.21.00.00 Income for the Period 2.238.068 2.238.068
8.22.00.00 Total Recorded Revenue (Expenses) with Credit (Debit) to Shareholders’ Equity
0
8.23.00.00 Deferred Taxesv 0
8.30.00.00 Transfers to Retained Earnings -21.254.083 21.254.083 0
8.40.00.00 Transactions with Shareholders 23.925.000 0 0 0 0 0 0 0 0 0 0 23.925.000
8.41.00.00 Capital Increases (Decreases) 23.925.000 23.925.000
8.42.00.00 (-) Dividend Distribution 0
8.43.00.00 Other Transactions with Shareholders 0
8.50.00.00 Reserves 6.471.165 -4.213 6.466.952
8.60.00.00 Transfer of Shareholders’ Equity to Income 0
8.70.00.00 SHAREHOLDERS’ EQUITY AT END OF PERIOD
151.303.510 400.180 18.220.069 -16.922 0 -21.885.071 2.238.068 0 0 0 0 150.259.834
STATEMENT OF CHANGES IN EQUITY
73
AUDITED FINANCIAL STATEMENTS
Capital Reserves Retained Earnings Other Adjustments
Paid-In
Surplus on Stock Price
Reserve for H
edging A
djustment
Reserve for Gap in
SIA Insurances
Other Reserves
Retained Earnings Previous Periods
Income for the
Period
Income from
Property, Plant, and Equipm
ent A
ssessment
Income from
Financial A
ssets
Income from
Cash
Flow H
edging
Other Incom
e w
ith Adjustm
ent to Shareholders’ Equity
Total
8.11.00.00 Initial Shareholders’ Equity Before Adjustments 127.378.510 400.180 11.748.904 -12.709 0 107.650 -21.254.083 118.368.452
8.12.00.00 Previous Period Adjustments -738.638 -738.638
8.10.00.00 Shareholders’ Equity at beginning of Period 127.378.510 400.180 11.748.904 -12.709 0 -630.988 -21.254.083 0 0 0 0 117.629.814
8.20.00.00 Comprehensive Income 0 0 0 0 0 -21.254.083 23.492.151 0 0 0 0 2.238.068
8.21.00.00 Income for the Period 2.238.068 2.238.068
8.22.00.00 Total Recorded Revenue (Expenses) with Credit (Debit) to Shareholders’ Equity
0
8.23.00.00 Deferred Taxesv 0
8.30.00.00 Transfers to Retained Earnings -21.254.083 21.254.083 0
8.40.00.00 Transactions with Shareholders 23.925.000 0 0 0 0 0 0 0 0 0 0 23.925.000
8.41.00.00 Capital Increases (Decreases) 23.925.000 23.925.000
8.42.00.00 (-) Dividend Distribution 0
8.43.00.00 Other Transactions with Shareholders 0
8.50.00.00 Reserves 6.471.165 -4.213 6.466.952
8.60.00.00 Transfer of Shareholders’ Equity to Income 0
8.70.00.00 SHAREHOLDERS’ EQUITY AT END OF PERIOD
151.303.510 400.180 18.220.069 -16.922 0 -21.885.071 2.238.068 0 0 0 0 150.259.834
74
AUDITED FINANCIAL STATEMENTS
NOTE 1. REPORTING ENTITY
LEGAL NAMECOMPAÑÍA DE SEGUROS CORPVIDA S.A.TAX NUMBER 96.571.890-7 LEGAL ADDRESS ROSARIO NORTE 660 PISO 21ECONOMIC GROUP CORPGROUP NAME OF PARENT COMPANY CORPGROUP NAME OF GROUP ULTIMATE PARENT COMPANY CORPGROUP MAIN ACTIVITIES LIFE INSURANCE BUSINESSEXEMPT RESOLUTION NO. 190 SVS EXEMPT RESOLUTION DATE DECEMBER 13, 1989SECURITIES REGISTRY NO 384
MAIN CHANGES IN OWNERSHIP FROM MERGERS AND ACQUISITIONSDuring 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
75
AUDITED FINANCIAL STATEMENTS
Abello Prieto Christian Rodrigo Tax Number
Legal Agent ( Surnames / Names ) 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
Chairwoman ( Surnames / Names ) 15385612-5
Board Member Names
Alejandro Ferreiro Yazigi6362223-0
Francis LucchesiExtranjero
Bruce StanforthExtranjero
Siña Gardner Fernando Jorge7103672-3
Saieh Guzman Jorge Andres8311093-7
Del Rio Charles Naylor7667414-0
Saieh Guzman Maria Catalina
15385612-5
Nro of Employees | 685 Ordinary Shareholder Meeting Deadline 30 4
MANAGEMENT AND OTHER INFORMATION
76
AUDITED FINANCIAL STATEMENTS
NOTE 2. BASIS OF PREPARATION
A) Compliance StatementThese non-comparative Financial Statements as of 31.12.2012 have been prepared based on the standards issued by the Superintendency of Securities and Insurance (hereinafter SVS), as applicable, in conformity with the provisions contained in Official Circular No. 2,022, issued by the SVS on May 17, 2011, and any amendments thereto and International Financial Reporting Standards (IFRS). The Financial Statements as of 31.12.2012 were approved by the Board of Directors on February 28, 2013. B) Accounting Period These non-comparative Financial Statements cover the twelve-month period from January 1 to December 31, 2012. C) Basis of Assessment The Financial Statements have been prepared based on amortized cost; as an exception, variable-income instruments have been accounted for at fair value. D) Functional and Presentation Currency The Company has defined the Chilean Peso as its functional and presentation currency, as 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.
E) New Standards and Interpretations for Future Dates In accordance with IFRS 1, the Company has applied the same accounting policies in its statement of financial position as of December 31, 2012 and its opening statement of financial position as of January 1, 2012. These accounting policies comply with each one of the current IFRS at the end of its financial statement period, except for the optional exemptions applicable during its transition to IFRS and the regulations established by the SVS. Additionally, the Company has opted for early adoption of IFRS 9, Financial Instruments (issued in November 2009 and amended in October 2010 and December 2011), as required by General Regulation NCG No. 311 of the Superintendency of Securities and Insurance. The Company has chosen January 1, 2012 as its first-time adoption date. Specifically, IFRS 9 requires that all financial assets be classified and subsequently assessed at amortized cost or at fair value, based on the entity’s business model for financial asset management and the characteristics of the contractual cash flows associated with financial assets.
77
AUDITED FINANCIAL STATEMENTS
a) The following new Standards and Interpretations have been adopted for these financial statements:
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
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:
78
AUDITED FINANCIAL STATEMENTS
The Company’s Management estimates that the future adoption of the aforementioned Standards and Interpretations will not have a significant impact on Financial Statements.
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
79
AUDITED FINANCIAL STATEMENTS
F) Going Concern AssumptionThe 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) ReclassificationsThere 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 ChangesBased 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.
80
AUDITED FINANCIAL STATEMENTS
NOTE 3. ACCOUNTING POLICIES
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.
4. Cash and cash equivalentsCash: 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.
81
AUDITED FINANCIAL STATEMENTS
5. Financial Investments As established in General Regulation NCG No. 311 of the Superintendency of Securities and Insurance, the Company values its Financial Investments as shown below: a) Financial Assets at Fair Value Those financial assets acquired to obtain a short-term benefit from variations in their prices and all those instruments not meeting the necessary conditions to be valued at amortized cost. Also included are financial derivatives not considered for hedging. The Company will acquire financial assets for trading with the purpose of obtaining a short-term profit (less than one year). Subsequent valuations shall be carried out at fair value in accordance with current market prices at the closing of each business day. Profits or losses from adjustments for valuation at fair value as well as results from negotiation activities shall be included under income for the period. i) Shares of domestic corporations whose annual adjusted turnover at financial statement closing date is equal to or higher than 25%, as provided in Title II of General Regulation NCG No. 103 of January 5, 2001 and any subsequent amendments thereto, are valued at their stock exchange trading value. ii) Shares of closely-held domestic corporations not meeting the requirement stated in the previous paragraph shall be carried at book value. iii) Domestic investment funds and investment funds set up in the country but with associated assets being invested in foreign securities which, as of financial statement closing date, have an annual adjusted turnover equal to or higher than 20%, computed based on the domestic stock turnover, are valued at the average weighted price on the last stock exchange trading day prior to financial statement closing date, by the number of installments agreed. The transactions considered for this calculation are those where a total amount
equal to or higher than UF 150 has been traded. iv) Investment funds not meeting the requirement stated in the previous paragraph are valued as follows: - Investment funds periodically submitting an economic value to the SVS are valued at such economic value.
- Investment funds periodically submitting financial statements, but not an economic value to the SVS shall be valued based on installment book value in accordance with these financial statements. - Investment funds not submitting information to the SVS shall be valued at book value.
v) Domestic mutual funds and mutual funds set up in the country but with associated assets being invested in foreign securities are valued at the installment redemption value on financial statement closing date. vi) Foreign shares held for trading are valued at their stock exchange trading value. vii) Foreign shares not held for trading are valued based on general IFRS.
viii) International investment funds set up abroad are valued at the installment closing price on the last stock exchange trading day in the financial statement closing month.
b) Financial Assets at Amortized Cost These are assets with a fixed maturity date and payments collected in fixed or determinable amounts. Criteria used to assess an instrument at amortized cost: 1.-Basic loan characteristics. The return for the holder is a fixed amount. 2.-Management based on contractual return. Financial instruments carried at amortized cost are
82
AUDITED FINANCIAL STATEMENTS
subject to impairment evaluation. An instrument may meet the aforementioned criteria to be valued at amortized cost, but the Company may value it at fair cost with effect on income to reduce a given accounting effect. Investments valued at “amortized cost” shall recognize accrued interest on income as a function of their purchase interest rate. Amortized cost shall mean the initial cost minus principal payments collected. 6. Hedging transactions Investments in derivative instruments are valued based on NCG No. 311 of the SVS. The Company maintains in its portfolio the following derivative instruments in order to hedge exchange rate and interest rate variations: cross currency swaps and forwards associated with fixed-income instruments valued at amortized cost as backup for life annuity obligations, with flows being matched. Flows expressed in UF are valued at amortized cost, while flows not meeting the aforementioned condition are carried at fair value. All investments in derivative instruments must be authorized by the Company´s Board of Directors and included in the Derivatives Use Policy.
7. Investments in single investment account (sia) insurances In accordance with the Company’s Investment Policy, investments backing up the fund value reserve for SIA insurances shall be comprised of two portfolios; the first shall correspond to fixed-income instruments, which shall be valued at amortized cost, and the second portfolio shall correspond to variable-income instruments, which shall be valued at market value with effect on income and in accordance with the instructions delivered by the Superintendency of Securities and Insurance through NCG No. 311. 8. Impairment Of Assets An impairment has occurred when the value of an
asset exceeds its recoverable amount. i) Financial Assets A financial asset or group of financial assets is said to be impaired, and a loss due to value impairment shall have occurred, if and only if there is objective evidence of impairment as a result of one or more events occurring after the initial recognition of the asset (an “event causing the loss”), with this event or events that caused the loss having an impact which may be reliably assessed on the estimated future cash flows associated with the financial asset or group of financial assets. On financial statement closing date, the Company evaluates if there is any indication of impairment in the value of a financial asset based on the Company’s accounting policy. ii) Non-financial assets The Company shall evaluate if there is any indicator of an impairment in the value of its assets if these have a defined useful life, for which it shall conduct the corresponding impairment tests. For assets with an indefinite useful life, if no impairment indicator exists, the Company shall conduct the test on an annual basis. The Company shall apply the Impairment Test to the following Assets as indicated by the Superintendency of Securities and Insurance standards based on the definitions stated for each one of them: a) Premiums Receivable from Insured Parties b) Accounts Receivable from Reinsurers c) Accounts Receivable from Lease Rentals other than from Leasing d) Intangible Assets and Goodwill originating from Business Combinations e) Fixed Assets at Amortized Cost 9. Real estate investments a. Investment Properties In accordance with NCG No. 316 of the
83
AUDITED FINANCIAL STATEMENTS
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 InvestmentsIn 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 inflation-adjusted 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 inflation-adjusted 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 inflation-adjusted 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
84
AUDITED FINANCIAL STATEMENTS
Company shall maintain accounts receivable associated with financial leasing (lessor) at their present value. In accordance with NCG No. 316, the Company shall value its financial leasing transactions at the lower value among the residual contract value determined based on the standards issued by the Chilean Accountants Association, the inflation-adjusted cost less accumulated depreciation, and the commercial appraisal value based on the lower of two appraisals. c. Properties for own use In accordance with NCG No. 316 of the Superintendency of Securities and Insurance and IFRS, these 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. d. Plant and equipment for own use Fixed assets are accounted for based on the cost model. The cost model is an accounting method under which fixed assets are recorded at cost less accumulated depreciation and less accumulated impairment losses, as defined in IAS 16. Maintenance, conservation, and repair expenses are charged against income, based on the accrual criterion, as cost for the accounting year in which they are incurred. The Company depreciates its assets based on the linear method as a function of the years of estimated useful life. Profit or loss from the sale or removal of an asset is calculated as the difference between the selling price and the asset book value and is recognized in income accounts.
10. Intangible assets An intangible asset is a non-monetary asset owned by the Company, which is without physical substance and identifiable. It will be recognized as
such if and only if: (a) Future economic benefits attributed to it flow to the entity and (b) The asset cost may be measured in a reliable way. Intangible assets acquired from third parties shall be valued at cost and shall be amortized in accordance with the Company’s accounting policies, not exceeding 5 years.
11. Non-current assets held for sale An entity shall classify a non-current asset (or a group of assets for use) as held-for-sale if its carrying amount will be essentially recovered through a sales transaction instead of through continued use, i.e., the sale must be highly probable. The Company has no assets of this type. 12. Insurance transactions a. Premiums These correspond to the amount owed to the Company by each reinsured party on account of premiums less acceptance discount and impairment. b. Other Assets and Liabilities from Insurance and Reinsurance Contracts i. Underlying derivatives in insurance contracts The Insurance Contracts executed by the Company have no underlying derivatives. ii. Insurance contracts acquired by means of business combinations or portfolio assignments The Company has no such insurance contracts. iii. Acquisition expenses Acquisition expenses are directly recognized under income on an accrual basis.
c. Technical Reserves i. Reserve for Ongoing Risks This corresponds to the Company’s obligation with insured and reinsured parties originating
85
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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AUDITED FINANCIAL STATEMENTS
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,
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
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AUDITED FINANCIAL STATEMENTS
not been paid. This reserve must include those payments that, as of estimation date, are due and have not yet been paid to the insured party. The Claim Reserve shall be recorded under a “Claim Reserve” liability account, segregating the reserve for Reported Claims and the Reserve for Claims Occurring But Not Reported (OYNR) on financial statement closing date. The Reported Claim Reserve shall in turn be classified as follows: (a) Claims Settled But Not Paid (b) Claims Settled But Contested by the Insured Party (c) Claims Under Settlement Process The estimation of the Reserve for Claims Occurring But Not Reported shall be based on the general standard application method provided for in NCG No. 306 (Incurred Claim Triangles) or any of the alternative methods provided for in the same regulation (Simplified Method and Transition Method), or any methods that have been submitted by the Company and approved by the Superintendency of Securities and Insurance, as applicable. vii. Catastrophic Reserve against Earthquakes This is not applicable to Life Insurance Companies. viii. Reserve for Premium Inadequacy The Reserve for Premium Inadequacy corresponds to the amount obtained by multiplying the Reserve for Ongoing Risk less the reinsurance portion by the inadequacy factor. The calculation methodology is indicated in General Regulation No. 6 of the Superintendency of Securities and Insurance. Regardless of the risk grouping method used to determine the amount of the Reserve for Premium Inadequacy, this is assigned and reported in the financial statements based on the FECU branch classification determined by the Superintendency of Securities and Insurance. ix. Additional Reserve based on Liability Adequacy Test
The Company conducts a Liability Adequacy Test on each quarterly financial statement closing date in order to assess the adequacy of the reserves set up in accordance with current regulations issued by the Superintendency of Securities and Insurance. The test is based on current hypothesis re-estimations assumed by the Company for estimating cash flows originating from insurance contracts, considering insured party options or benefits as well as contracted guarantees. The contract flows indicated in the previous paragraph consider at least the flows arising from expected claims and direct expenses related to settlement thereof, discounting, if applicable, the future premiums the insured party has agreed to pay as part of the insurance contract. The Liability Adequacy Test is conducted considering flows before taxes. If, due to the application of this Test, a Technical Reserve inadequacy is verified, the Company shall set up an additional Technical Reserve in the statement of income corresponding to the respective closing date. However, based on the periodical evaluation of the items analyzed in this Test, the additional Technical Reserve may be reversed in the income statement corresponding to the respective closing date. The Liability Adequacy Test recognizes the risk assigned to the reinsurer, i.e., when the need to set up an additional Technical Reserve is determined, this is recognized in gross terms under liabilities and the reinsurer participation under assets. When a Premium Inadequacy Test is conducted, the Company evaluates whether this test meets the requirements to be considered in replacement of the Liability Adequacy Test. If this is so, the latter Test is not required. The Test is applied for groups of contracts sharing similar risks and jointly managed as part of the
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AUDITED FINANCIAL STATEMENTS
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.
If, in accordance with the Superintendency of Securities and Insurance regulations, the gradual recognition of mortality tables for technical reserve calculation is effective, the Liability Adequacy Test does not consider the differences in reserves accounted for by such gradual process. Consequently, if an inadequacy is verified, an additional reserve is set up only for the amount exceeding the difference in technical reserves accounted for by the gradual process. x. Reserve for Insurances with a Single Investment Account In accordance with the instructions issued in NCG No. 306, the deposit and risk components associated with an insurance with SIA shall be accounted for on a joint basis. Therefore, the total funds transferred to the Company by the contracting party shall be recognized as the insurance premium. The deposit component shall be recognized as a technical reserve denominated “Fund Value Reserve” and shall correspond to the Policy Value of each contract on the reserve estimation date in accordance with the conditions established in each contract, without deduction of any potential redemption charges. In the case of insurances associated with NCG No. 176 of 2005, neither the technical reserve associated with the deposit component nor the contract premium shall be recognized under liabilities. Concerning the insurance component, the
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 investments that back up the reserve. The estimation of this reserve shall be based on the instructions issued by NCG No. 306, and the determined amount shall be recorded in the “Gap Reserve” equity account, as indicated in Official Circular No. 2022 of the Superintendency of Securities and Insurance. xi. Other Technical Reserves The reserve for debts with insured parties and other reserves set up by the insurance entity in accordance with current regulations and any additional reserves that must be set up by Mutual Fund Companies according to their by-laws shall be recorded under this heading. xii. Reinsurer Interest in Technical Reserves The Company recognizes reinsurer interest in technical reserves on an accrual basis, in accordance with current contracts. d. Matching (to be reported for policies with validity prior to January 1, 2012) For life annuity policies effective prior to January 1, 2012, the Company has valued technical reserves using matching regulations in accordance with General Regulation NCG No. 318 and Official Circular No. 1,512 of the Superintendency of Securities and Insurance and any subsequent amendments thereto. Based on this regulation, as future flows from the portfolio of fixed-income instruments and technical reserves generated by life annuities are matched over time, future flows from eligible technical
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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.
13. Interests in related companies The Company has ownership interests in related Companies through stock and current accounts, whose balances are disclosed under the heeding “Financial Assets at Fair Value” and “Related Debtors” respectively. 14. Financial liabilities Financial liabilities are classified either as financial liabilities at fair value under income or are designated as other financial liabilities in accordance with IAS 39 under the following categories. (a) Financial liabilities at fair value under income - Financial liabilities are classified at fair value under income when they are held for trade or are designated at fair value under income. (b) Other financial liabilities - Other financial liabilities, including loans, are initially valued as per the amount of cash received, less transaction costs. Other financial liabilities are subsequently valued at amortized cost using the effective interest rate method, recognizing interest expenses based on effective profitability.
15. Provisiones. Provisions are liabilities with respect of which there is uncertainty concerning their amount or validity period. They are recognized in the Statement of Financial Position when the following circumstances are met:
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. 16. Investment Revenues And Expenses Investment revenues and expenses are recognized on an accrual basis in accordance with the Company’s contracts or obligations in the Statement of Comprehensive Income in accordance with the following detail: a. Financial Assets at Fair Value The Company records revenues associated with financial assets at fair value, on an accrual basis, in accordance with the market value of these investments on financial statement closing date and the book value thereof . The associated expenses are recognized on an accrual basis in accordance with the Company’s contracts or obligations. b. Financial Assets at Amortized Cost The Company records the revenues associated with financial assets at amortized cost, on an accrual basis, estimated in accordance with the same discount rate used to determine the instrument price at the time of purchase. The associated expenses are recognized on an accrual basis in accordance with the Company’s contracts or obligations.
17. Interest costs Interest costs are recorded on an accrual basis in accordance with the interest rate agreed upon at the time of the granting of the corresponding credit.
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AUDITED FINANCIAL STATEMENTS
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.
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
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
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AUDITED FINANCIAL STATEMENTS
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.
23. Adjustable units These correspond to transactions conducted in adjustable units, such as UFs, UTMs, etc.,
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. OthersThe Company has no other non-disclosed accounting policies.
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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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AUDITED FINANCIAL STATEMENTS
NOTE 5. FIRST-TIME ADOPTION
Guidelines for Transition to IFRSUntil 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 post-employment 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.
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AUDITED FINANCIAL STATEMENTS
M$ NOTETotal Shareholders' Equity based on Chilean Accounting Principles: 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)
Adjustments to real estate investments
Adjustments for technical reserves
Adjustment to investments accounted for applying the interest methodAccumulated effect from other non-significant items -114709 (3)
Adjustment for deferred taxes (33.479) (2)
Adjustment for minority interests
Total Shareholders’ Equity pursuant to IFRS 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 5.2. NOTE ON SHAREHOLDERS’ EQUITY RECONCILIATION 5.2.1SUMMARY OF CONSOLIDATED EQUITY RECONCILIATION AS OF JANUARY 1, 2012.
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AUDITED FINANCIAL STATEMENTS
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 Sub-Manager, 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
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AUDITED FINANCIAL STATEMENTS
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.
v)Impairment Policy The determination of a value decrease in the investment portfolio arises from the economic expectation or objective evidence that an asset or a group of assets, valued at amortized cost, will undergo impairment as a consequence of one or more events, on a corporate, industry, or country, after its initial valuation. Such events must have an impact on future cash flows that may be reasonably measured. At the closing of each quarter, the Company evaluates if there is any indication of impairment in the value of an asset. Loss from impairment of instruments assessed at amortized cost is equivalent to the positive difference between its equitable value and its fair value. c) Changes in a) or b) since the preceding period.As this is first-time adoption, no comparisons with prior periods are possible.
2.- Liquidity Risk a) Risk Exposure and Origin Liquidity Risk DefinitionLiquidity risk refers to the potential loss caused by the advance sale of financial assets, at unusual discounts, in order to face non-scheduled or previously committed cash outflows or due to a transaction that could not be timely settled or hedged with available cash. Due to the particular nature of the Life Annuity Industry, liabilities generally have a higher average period than assets, and consequently, exposure to a liquidity crisis because of this is low. Along the same line, it should be noted that liabilities are concentrated in life annuities with a high degree of diversification without any possibility of advance enforcement, which reduces even more the exposure to a liquidity crisis. In addition, given that liabilities associated with SIA accounts are backed up by investments associated with liquid indices or assets backing up the offer made by the Company in each of its policies, liquidity risk is low. Additionally, these liabilities represent a lower percentage of 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 potentialliquidity 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
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AUDITED FINANCIAL STATEMENTS
result of the write-offs associated with advance redemptions. b) Risk Management Objectives, Policy, and Processesi) Objectives To directly contribute to ensuring an adequate liquidity level through the anticipation of scenarios enabling the establishment of guidelines that proactively facilitate decision-making 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-to-market” 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 long-term 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 ProcessesTo directly contribute to the mitigation of market risk associated to the portfolio through the establishment of guidelines that facilitate
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AUDITED FINANCIAL STATEMENTS
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.
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-at-Risk 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.
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) MeasurementMeasurement 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.
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AUDITED FINANCIAL STATEMENTS
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.
100
AUDITED FINANCIAL STATEMENTS
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.
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
102
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
December 2012
Local Ratings Without RatingPercentage per Instrument
AA
A(cl)
AA
(cl)
A(cl)
BBB(cl)
BB(cl)
B(cl)
Sin C
lasificación
Porcentaje por Instrum
ento
Securities issued or guaranteed by the Government or the Chilean Central Bank
13,4% 1,2% - - - - - 14,7%
Mortgage bonds, bonds, and other debt or credit securities issued by banks or financial institutions
7,4% 23,1% 7,3% - - - - 37,7%
Bonds, promissory notes, and other debt or credit securities issued by public or private companies
0,3% 20,2% 13,6% 0,3% - - - 34,4%
Interests in syndicated loans
- - 1,5% - - - - 1,5%
Mortgage loans notes - - - - - - 3,5% 3,5%
Real estate financial leasing/General purpose leasing
- - - - - - 8,2% 8,2%
Total percentage per local rating
21,1% 44,6% 22,4% 0,3% - - 11,7% 100,0%
Amount UF 61.635.493
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AUDITED FINANCIAL STATEMENTS
International RatingsWithout RatingPercentage per Instrument
AA
A
AA
A BBB
BB B Sin C
lasificación
Porcentaje por Instrum
ento
Foreign investments Fixed income
- - 7,7% 71,6% 20,4% 0,2% - 100,0%
Total percentage per international rating
- - 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 Due
Overdue Debt / 2012 Total Portfolio
1 - 3 8,9%
4 - 6 1,7%
7 - 9 0,6%
10 - 12 0,3%
13 - 24 0,6%
>= 25 0,8%
Total 12,9%
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.
104
AUDITED FINANCIAL STATEMENTS
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:
Issuer
Mnem
onic
Risk Score
Gross
Investment
Impairm
ent %
Net Exposure
Transa Securitización
BTRA1-B 3,2 11.338 31,45% 7.772
CDO Newport
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 Portfolio % ImpairmentMortgage Loan Notes 0,70%
Leasing 0,07%
Consumer Loans 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
105
AUDITED FINANCIAL STATEMENTS
2.- Liquidity Risk a) Analysis of Financial Liability Maturities Financial liability maturities are detailed in Note No. 23 of the Financial Statements as of December 31, 2012. The Company’s monthly maturities are mainly influenced by the payment of life annuity pensions, which are fairly stable in the short run, for which projections concerning them can be readily made. b) Description of how liquidity risk is managed Liquidity is proactively managed through the projection of investment maturities, interest and capital payment receipts, prepayments, revenue from sale of Company products, etc., all these representing cash inflows. In turn, the same exercise is carried out projecting cash outflows, which mostly correspond to pension and benefit payments and investments, in relation to which there is discretionality to adjust the required resources. As alternatives to manage potential temporary 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
Instrument UFCDO Newport 34.560
Transa Securitización 7.772
Total 42.332
Public Investment Fund UF
CFICIMENT 89.165
CFINRAICES 49.320
CFIDESIN06 21.775
CFIMDI 19.016
CFISANTDI7 7.205
Total 186.481
Private Investment Fund UF
Fondos Kappa y Alpha 1.232.062
CARVAJAL 3.116
IVK 2.651
Total 1.237.828
Overall total 1.466.641
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AUDITED FINANCIAL STATEMENTS
d) Asset flow maturity profile
3.- Market RiskSince 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,
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 1
Tier2
Tier3
Tier 4
Tier 5
Tier 6
Tier7
Tier 8
Tier 9
Tier 10
No. of months
1 -24 25 - 48 49 - 72 73 - 96 97 - 120 121 - 156 157 - 192 193 - 252 253 -336 337 - end
Months 24 24 24 24 24 36 36 60 84 rest
End of
Dic-12 t=1 18.213.094 10.775.507 10.829.595 11.963.040 10.164.607 13.606.282 12.157.309 20.126.383 7.905.531 15,931
107
AUDITED FINANCIAL STATEMENTS
Tier 1
Tier2
Tier3
Tier 4
Tier 5
Tier 6
Tier7
Tier 8
Tier 9
Tier 10
No. of months
1 -24 25 - 48 49 - 72 73 - 96 97 - 120 121 - 156 157 - 192 193 - 252 253 -336 337 - end
Months 24 24 24 24 24 36 36 60 84 rest
End of
Dic-12 t=1 18.213.094 10.775.507 10.829.595 11.963.040 10.164.607 13.606.282 12.157.309 20.126.383 7.905.531 15,931
Rp = Monthly expected returnVp = Portfolio valuez = Significance levelq = Monthly standard deviation
VAR = [Rp - ( z ) ( q )] Vp
The VaR is presented in the charts below: CorpVida Evaluation Date: 04-01-2013 Base Currency: CLPHorizon Date: 04-02-2013 Total Market Value of included securities: 67.524.463.808 CLP
Probability of Loss
Value At Risk Equity %
1% 3.673.204.702 2,64%
2% 3.242.782.492 2,33%
5% 2.597.154.168 1,87%
Probability of Loss
Value At Risk % of Total Mkt Val
1% 3.673.204.702 5,44%
2% 3.242.782.492 4,80%
5% 2.597.154.168 3,85%
Evaluation Date: 04-01-2013 Base Currency: CLPHorizon Date: 04-02-2013
Net Equity (31 Dic 2012) 139.028.292.000 CLP
108
AUDITED FINANCIAL STATEMENTS
4.- Derivative Product UseI.- The derivative position exposed to counterparty risk is detailed in Note No. 8 to the Financial Statements as of December 31, 2012. II.-The derivative position exposed to market risk is detailed below: As of December 31. 2012, there are no derivatives exposed to market risk. II. INSURANCE RISKS1.- Objectives, Policy, and Processes for Insurance Risk Management The Company has set as main objective for insurance risk management the availability of adequate resources to guarantee compliance with the commitments established in insurance contracts. To meet this objective, the Company has organized itself considering the following functions:II.Technical Management: Reserve calculation, fee calculation, subscription guideline definition, withholding limit and reinsurance agreement determination, and actuarial analyses and projections. Operational Management: Implementation of subscription, policy issuance, premium collection, contract maintenance, and claim and benefit payment processes. Product Development Management: Detection of market needs, coordination of the adjustment process, and product development.
The Company has implemented the following policies which guide its actions and define the design of the processes associated with insurance risk management: - Reserve Policy - Fee Policy
- Subscription Policy - Reinsurance Policy - Investment Policy The Reserve Policy establishes the criteria and responsibilities in relation to the calculation of technical reserves, considering compliance with the regulations issued by the Superintendency of Securities and Insurance as well as the information requirements by Company’s Corporate Governance. The Company’s Fee Policy is based on the principles of equivalence and equality, considering the competitive environment in which the insurance business is carried out. Based on these principles, insurance premiums are calculated for them to be adequate to finance claims, operational expenses, and the expected profitability, reflecting the risk assumed by the Company. For its part, the Subscription Policy has been designed to ensure appropriate risk rating in accordance with medical and non-medical factors, taking into account the level of contracted capital. Subscription guidelines are adapted to each type of business depending on its characteristics and marketing method always applying the principles of objectivity and non-discrimination. The Company has a Reinsurance Policy defining risk and diversification requirements that must be met by reinsurance companies, in order to minimize the liquidity risk associated with any potential non-compliance by the latter. The Investment Policy has been described in the first part of this Note. Additionally, the Company maintains permanent
109
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 ManagementWithin the insurance risk context, market, liquidity, and credit risks arise from the rights granted by policies to policy underwriters.
Concerning the Company, such risks are mainly expressed in insurances with an investment account through the right to redemption of Policy Values, which has an underlying Liquidity Risk, and investment options with a minimum guaranteed interest rate, which are subject to Market Risk.
The Company has a specific policy and processes for the management of these risks, which have already been described in the first part of this Note.
Note No. 25.2.4 presents the hedge for the Fund Value Reserve per type of insurance. 3.- Exposure to Insurance, Market, Liquidity, and Credit Risk from insurance Contracts Concerning insurance contracts, the main risk faced by the Company is that both the amount of claims and their timing differ with respect to underlying expectations when pricing is defined. Any changes that may occur in claim frequency, average claim cost, and the return on investments associated with contracts have an impact on claim risk. The insurances offered by the Company may be classified under the following groups: a) Traditional Insurances
b) Pension Fund and Private Life Annuities Traditional InsurancesThis 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 These pay a principal when the policyholder dies. Some plans also involve the payment of a survival capital. The term of these insurances may range from 1 to 20 years, and the premium payment may be a single one or a periodical one. Depending on the product, additional accident, health, and disability coverages may be contracted. b) Temporary Health Insurances These mainly correspond to catastrophic individual insurances. These insurances are subject to annual renewal and pay a benefit in the form of a single capital or reimbursement of medical expenses when these exceed a deductible amount and up to the specified capital by product. c) Insurances with an Investment Account These are individual long-term insurances that pay the amount of the agreed benefit in case of policy holder-death. The contracting party to one of these policies may select the investment portfolio associated with the reserve fund generated by the premiums, opting between the investment alternatives that the Company makes available for this purpose. This fund, denominated Policy Value, may be redeemed by the contracting party on a partial or total basis at any time during the validity of the
110
AUDITED FINANCIAL STATEMENTS
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 variable-income 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.
d) Mass Delivery Insurances These correspond to annual Life and Health coverages granted to insured groups under a collective policy. The Company maintains a residual portfolio of these products. e) Title Insurances These are insurances associated with credits issued by financial institutions which, in case of death of the policyholder, pay the outstanding debt balance to the creditor. These insurances may have an annual or bi-annual coverage such as insurances associated with mortgage loans or coverage during the credit term in the case of consumer credits. Life Annuitiesa) Pension Fund Life Annuities Pension Fund Life Annuities comprise the payment of a pension to the policyholder until his/her death and thereafter a percentage of the pension to surviving beneficiaries under the conditions established by law. In case of policyholder death, the payment of a capital equivalent to UF 15 for funeral expense funding is considered.
These contracts are funded by means of a
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. b) Private Life Annuities These operate in a way similar to pension fund life annuities, but provide increased flexibility in the determination of beneficiaries and the determination of surviving beneficiaries. In addition, private life annuities may be hired during temporary terms.
The main insurance risks faced by the Company are as follows:a) Mortalidad The risk of loss due to a death rate different from expected. b) Longevidad The risk of loss due to an increase in life expectations beyond predictions. c) Inversiones The risk of loss due to lower profitabilities than expected. d) Gastos The risk of loss due to an increase in expenses beyond predictions. e) Persistencia The risk of loss due to deviations in redemptions and early termination of policies with respect to expectations. In the case of policies with a main death coverage, the main factors that may increase claim frequency are: epidemics, widespread changes in life styles, and natural disasters.
111
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
112
AUDITED FINANCIAL STATEMENTS
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 PREMIUMAS OF DECEMBER 31, 2012
Product Internal Channel
External Channel
Life Annuities - 100.00%
Traditional Insurances
84.24 % 15.76 %
Bank Insurance - 100,00%
Title Insurances - 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
113
AUDITED FINANCIAL STATEMENTS
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 VARIATION
Longevity SVS Mortality Tables -5,0% qx
Mortality SVS Mortality Tables + 5,0% qx
Expenses Company Expenses+ 5,0% Annual
Persistence Company Experience -10,00%
InvestmentsVariable-Income and Real Estate Value
-5,00%
114
AUDITED FINANCIAL STATEMENTS
6.4.- Effects on Shareholders’ EquityThe result of the Sensitivity Analysis on the Company’s Net Worth is as follows:
SENSITIVITY TEST RESULTSAS OF DECEMBER 31, 2012
Product Net Worth Variation (%)
Longevity -0,23%
Mortality -0,19%
Persistence -0,05%
Expenses -0,37%
Investments -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
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
115
AUDITED FINANCIAL STATEMENTS
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.
116
AUDITED FINANCIAL STATEMENTS
NOTE 7. CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents CLP USD EUR OTRA TotalCash on hand 980.840 980.840
Banks 1.073.392 640.038 1.713.430
Cash equivalents 4.249.610 4.249.610
Total Cash and Cash Equivalents 6.303.842 640.038 - - 6.943.880
Figures in M$
117
AUDITED FINANCIAL STATEMENTS
NOTE8. FINANCIAL ASSETS AT FAIR VALUENOTE 8.1.INVESTMENTS AT FAIR VALUE
118
AUDITED FINANCIAL STATEMENTS
NOTE8. FINANCIAL ASSETS AT FAIR VALUELevel 1
Level 2
Level 3
Total
Am
ortized cost
Effect on results
Effect on O
CI (O
ther C
ompressive
Income)
DOMESTIC INVESTMENTSFixed Income
Government instruments
Instruments issued by the financial system 1.073.989 1.073.989 - -
Debt or credit instruments 3.225.922 3.225.922 -
Domestic company instruments traded abroad - - -
Mortgage loan notes - - -
Others -
Variable Income
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 -
Investment funds - 53.131.573 - 53.131.573 53.131.573 -
Mutual funds -
Others - -
FOREIGN INVESTMENTS - -
Fixed Income - - -
Securities issued by Foreign Governments and Central Banks
Securities issued by Foreign Banks and Financial Institutions 2.001.722 2.000.072 1.650
Securities issued by Foreign Companies 1.037.001 965.011 71.990
Fixed Income -
Shares of Foreign Corporations 1.622.444 1.622.444 1.622.444 -
Foreign investment fund installments 2.104.033 2.104.033 2.104.033 -
NOTE 8.1. INVESTMENTS AT FAIR VALUE
119
AUDITED FINANCIAL STATEMENTS
Level 1
Level 2
Level 3
Total
Am
ortized cost
Effect on results
Effect on O
CI (O
ther C
ompressive
Income)
DOMESTIC INVESTMENTSFixed Income
Government instruments
Instruments issued by the financial system 1.073.989 1.073.989 - -
Debt or credit instruments 3.225.922 3.225.922 -
Domestic company instruments traded abroad - - -
Mortgage loan notes - - -
Others -
Variable Income
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 -
Investment funds - 53.131.573 - 53.131.573 53.131.573 -
Mutual funds -
Others - -
FOREIGN INVESTMENTS - -
Fixed Income - - -
Securities issued by Foreign Governments and Central Banks
Securities issued by Foreign Banks and Financial Institutions 2.001.722 2.000.072 1.650
Securities issued by Foreign Companies 1.037.001 965.011 71.990
Fixed Income -
Shares of Foreign Corporations 1.622.444 1.622.444 1.622.444 -
Foreign investment fund installments 2.104.033 2.104.033 2.104.033 -
120
AUDITED FINANCIAL STATEMENTS
NOTE 8.2. HEDGING AND INVESTMENT DERIVATIVES NOTE 8.2.1. DERIVATIVE USE STRATEGY 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.
Type of instrumentHedging Derivatives Investment M$ Other
derivativesNumber of contracts Effect on Income for the Period M$ Effect on OCI M$ Asset amounts at Margin (1) M$
Hedging M$ Hedging 1512 M$
Forward
Purchase (87.097) 0 2 (12.252)
Sale 134.959 - 11 -28.938
Options
Purchase
Sale
Swaps - 10.114.462 137 -394.352
TOTAL 47.862 10.114.462 0 - 150 -435.542 - -
NOTE 8.2.2. POSITION IN DERIVATIVE CONTRACTS
Level 1
Level 2
Level 3
Total
Am
ortized cost
Effect on results
Effect on O
CI (O
ther C
ompressive
Income)
Installments of investment funds set up in the country with assets invested abroad
2.366.359 2.366.359 2.366.359 -
Foreign mutual fund installments 21.237 21.237 21.237 -
Installments of mutual funds set up in the country with assets invested in foreign securities
- - - -
Others - - - -
DERIVATIVES -
Hedging derivatives 47.862 - 47.862 - 47.862
Investment derivatives - - - - -
Others - -
TOTAL 63.546.006 53.131.573 2.644.648 119.322.227 119.200.725 121.502 -
121
AUDITED FINANCIAL STATEMENTS
Type of instrumentHedging Derivatives Investment M$ Other
derivativesNumber of contracts Effect on Income for the Period M$ Effect on OCI M$ Asset amounts at Margin (1) M$
Hedging M$ Hedging 1512 M$
Forward
Purchase (87.097) 0 2 (12.252)
Sale 134.959 - 11 -28.938
Options
Purchase
Sale
Swaps - 10.114.462 137 -394.352
TOTAL 47.862 10.114.462 0 - 150 -435.542 - -
Level 1
Level 2
Level 3
Total
Am
ortized cost
Effect on results
Effect on O
CI (O
ther C
ompressive
Income)
Installments of investment funds set up in the country with assets invested abroad
2.366.359 2.366.359 2.366.359 -
Foreign mutual fund installments 21.237 21.237 21.237 -
Installments of mutual funds set up in the country with assets invested in foreign securities
- - - -
Others - - - -
DERIVATIVES -
Hedging derivatives 47.862 - 47.862 - 47.862
Investment derivatives - - - - -
Others - -
TOTAL 63.546.006 53.131.573 2.644.648 119.322.227 119.200.725 121.502 -
Likewise, the financial risk policy is aimed at maintaining associated risks (market, liquidity, reinvestment, credit, and operating risks) within predetermined limits.
122
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
ContractObjetive
Type OfTransaction
Transactionoperación
ItemTransaction
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
RiskRating
TargetA
sset
Nom
inal
Currency
Forward
Price
Date
Transaction
Contract
Expiry Date
Market Value
Of Target A
sset A
s Of Rep.
Date M
$
Spot Price As
Of Reporting
Date
Forward Price
Quoted In M
°A
s Of Rep.
Date
FlowD
iscountRate
Fair ValueO
f Frw
Contract
As O
f Rep. D
ate M$
Origin O
fInform
ation
PURCHASE
Hedging
1555 1 Goldman Sachs Estados Unidos A- UF 200.000 $$ 23.248,00 11-04-2012 08-03-2013 4.568.150 1,00 22.840,75 -156,82% (94.872) BLOOMBERG
1840 1 Banco De Chile Chile AAA PROM 2.000.000 $$ 476,08 20-12-2012 04-01-2013 959.920 1,00 0,48 14,00% 7.775 BLOOMBERG
Hedging 1512
Investment
TOTAL 2.200.000 5.528.070 (87.097)
SALE
123
AUDITED FINANCIAL STATEMENTS
ContractObjetive
Type OfTransaction
Transactionoperación
ItemTransaction
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
RiskRating
TargetA
sset
Nom
inal
Currency
Forward
Price
Date
Transaction
Contract
Expiry Date
Market Value
Of Target A
sset A
s Of Rep.
Date M
$
Spot Price As
Of Reporting
Date
Forward Price
Quoted In M
°A
s Of Rep.
Date
FlowD
iscountRate
Fair ValueO
f Frw
Contract
As O
f Rep. D
ate M$
Origin O
fInform
ation
PURCHASE
Hedging
1555 1 Goldman Sachs Estados Unidos A- UF 200.000 $$ 23.248,00 11-04-2012 08-03-2013 4.568.150 1,00 22.840,75 -156,82% (94.872) BLOOMBERG
1840 1 Banco De Chile Chile AAA PROM 2.000.000 $$ 476,08 20-12-2012 04-01-2013 959.920 1,00 0,48 14,00% 7.775 BLOOMBERG
Hedging 1512
Investment
TOTAL 2.200.000 5.528.070 (87.097)
SALE
124
AUDITED FINANCIAL STATEMENTS
NOTE 8.2.7. FUTURES CONTRACTS* As of December 31, 2012, the Company has no Futures Contracts.
Hedging
1005 1 BANCO BBVA CHILE
Chile AA+ UF 65.358 PROM 0,02 18-05-2011 10-06-2013 1.439.880 479,96 0,88 64,00% 48.690 BLOOMBERG
1006 1 BANCO BBVA CHILE
Chile AA+ UF 65.184 PROM 0,02 19-05-2011 10-06-2013 1.439.880 479,96 0,88 64,00% 44.717 BLOOMBERG
1718 1 HSBC BANK CHILE
Chile AAA $$ 1.469.910.000 PROM 489,97 27-08-2012 03-01-2013 1.439.880 479,96 0,48 21,00% 30.004 BLOOMBERG
1727 1 BANCO DE CHILE
Chile AAA $$ 1.469.400.000 PROM 489,80 03-09-2012 08-01-2013 1.439.880 479,96 0,48 53,00% 29.347 BLOOMBERG
1730 1 BANCO BBVA CHILE
Chile AA+ $$ 978.800.000 PROM 489,40 04-09-2012 04-01-2013 959.920 479,96 0,48 14,00% 18.865 BLOOMBERG
1827 1 MORGAN STANLEY
Estados Unidos A- $$ 953.500.000 PROM 476,75 12-12-2012 14-01-2013 959.920 479,96 0,48 73,00% (6.691) BLOOMBERG
1828 1 Credit Suisse First Boston
Estados Unidos A $$ 1.669.675.000 PROM 477,05 13-12-2012 17-01-2013 1.679.860 479,96 0,48 107,00% (11.028) BLOOMBERG
1829 1 Credit Suisse First Boston
Estados Unidos A $$ 1.430.400.000 PROM 476,80 12-12-2012 14-01-2013 1.439.880 479,96 0,48 73,00% (9.886) BLOOMBERG
1837 1 BANCO SANTANDER
Chile AAA $$ 1.190.500.000 PROM 476,20 18-12-2012 04-01-2013 1.199.900 479,96 0,48 28,00% (9.437) BLOOMBERG
1843 1 JPMORGAN CHASE BANK N.A
Chile AAA $$ 1.199.475.000 PROM 479,79 27-12-2012 25-01-2013 1.199.900 479,96 0,48 166,00% (1.806) BLOOMBERG
1844 1 BANCO SANTANDER
Chile AAA $$ 963.600.000 PROM 481,80 27-12-2012 29-01-2013 959.920 479,96 0,48 193,00% 2.184 BLOOMBERG
Investment
TOTAL 11.325.390.542 14.158.820 134.959
125
AUDITED FINANCIAL STATEMENTS
Hedging
1005 1 BANCO BBVA CHILE
Chile AA+ UF 65.358 PROM 0,02 18-05-2011 10-06-2013 1.439.880 479,96 0,88 64,00% 48.690 BLOOMBERG
1006 1 BANCO BBVA CHILE
Chile AA+ UF 65.184 PROM 0,02 19-05-2011 10-06-2013 1.439.880 479,96 0,88 64,00% 44.717 BLOOMBERG
1718 1 HSBC BANK CHILE
Chile AAA $$ 1.469.910.000 PROM 489,97 27-08-2012 03-01-2013 1.439.880 479,96 0,48 21,00% 30.004 BLOOMBERG
1727 1 BANCO DE CHILE
Chile AAA $$ 1.469.400.000 PROM 489,80 03-09-2012 08-01-2013 1.439.880 479,96 0,48 53,00% 29.347 BLOOMBERG
1730 1 BANCO BBVA CHILE
Chile AA+ $$ 978.800.000 PROM 489,40 04-09-2012 04-01-2013 959.920 479,96 0,48 14,00% 18.865 BLOOMBERG
1827 1 MORGAN STANLEY
Estados Unidos A- $$ 953.500.000 PROM 476,75 12-12-2012 14-01-2013 959.920 479,96 0,48 73,00% (6.691) BLOOMBERG
1828 1 Credit Suisse First Boston
Estados Unidos A $$ 1.669.675.000 PROM 477,05 13-12-2012 17-01-2013 1.679.860 479,96 0,48 107,00% (11.028) BLOOMBERG
1829 1 Credit Suisse First Boston
Estados Unidos A $$ 1.430.400.000 PROM 476,80 12-12-2012 14-01-2013 1.439.880 479,96 0,48 73,00% (9.886) BLOOMBERG
1837 1 BANCO SANTANDER
Chile AAA $$ 1.190.500.000 PROM 476,20 18-12-2012 04-01-2013 1.199.900 479,96 0,48 28,00% (9.437) BLOOMBERG
1843 1 JPMORGAN CHASE BANK N.A
Chile AAA $$ 1.199.475.000 PROM 479,79 27-12-2012 25-01-2013 1.199.900 479,96 0,48 166,00% (1.806) BLOOMBERG
1844 1 BANCO SANTANDER
Chile AAA $$ 963.600.000 PROM 481,80 27-12-2012 29-01-2013 959.920 479,96 0,48 193,00% 2.184 BLOOMBERG
Investment
TOTAL 11.325.390.542 14.158.820 134.959
126
AUDITED FINANCIAL STATEMENTS
NOTE 8.2.8. SWAP CONTRACTS
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
Risk Rating
Nom
inal Long Position
Nom
inal Short Position
Currency Long
Position
Currency
Short Position
Tipo Cam
bio C
ontrato
Tasa Posicion Larga
TasaPosicionC
orta
Transaction D
ate
Contract
Expiry Date
Market Value
Of Target
Asset A
s Of
Rep. Date M
$
Market
Exchange Rate
Market Rate
Long Position
Market Rate
Short Position
PRESENT
VALU
E LON
G
POSITIO
N
M$
Present Value Short Position M
$
Fair Value O
f Swap
Contract A
s O
f Rep. Date
M$
Information
Origin
HEDGING
142 1 Credit Suisse First Boston
Inglaterra A 59.217,00 2.000.000,00 UF AVE 530,80 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
427 1 Banco Santander
Chile AAA 58.693,00 2.200.000,00 UF AVE 560,40 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
428 1 Credit Suisse First Boston
Inglaterra A 107.586,00 4.000.000,00 UF AVE 564,65 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
506 1 Deutsche Bank London
Inglaterra A 26.298,00 1.000.000,00 UF AVE 549,00 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
505 1 Deutsche Bank London
Inglaterra A 26.298,00 1.000.000,00 UF AVE 549,00 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
504 1 Deutsche Bank London
Inglaterra A 52.596,00 2.000.000,00 UF AVE 549,00 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
527 1 Banco Santander
Chile AAA 102.601,00 4.000.000,00 UF AVE 536,00 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
528 1 Banco Santander
Chile AAA 25.650,00 1.000.000,00 UF AVE 536,00 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
538 1 Deutsche Bank London
Inglaterra A 12.662,00 500.000,00 UF AVE 530,20 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
694 1 Banco BBVA Chile
Chile AA- 25.804,00 1.000.000,00 UF AVE 544,25 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
695 1 Banco BBVA Chile
Chile AA- 12.902,00 500.000,00 UF AVE 544,25 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
696 1 Credit Suisse First Boston
Inglaterra A 76.367,00 3.000.000,00 UF AVE 537,00 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
712 1 Deutsche Bank London
Inglaterra A 125.279,00 5.000.000,00 UF AVE 530,32 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
713 1 Deutsche Bank London
Inglaterra A 12.528,00 500.000,00 UF AVE 530,32 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
714 1 Deutsche Bank London
Inglaterra A 25.056,00 1.000.000,00 UF AVE 530,32 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
731 1 Goldman Sachs
Estados Unidos
A- 50.405,00 2.000.000,00 UF AVE 534,99 5.01% 7% 13-07-2010 20-01-2020 959.920 479,96 5.01% 7% 1.176.261 990.802 185.459 BLOOMBERG
732 1 Goldman Sachs
Estados Unidos
A- 12.601,00 500.000,00 UF AVE 534,99 5.01% 7% 13-07-2010 20-01-2020 239.980 479,96 5.01% 7% 294.065 247.700 46.365 BLOOMBERG
127
AUDITED FINANCIAL STATEMENTS
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
Risk Rating
Nom
inal Long Position
Nom
inal Short Position
Currency Long
Position
Currency
Short Position
Tipo Cam
bio C
ontrato
Tasa Posicion Larga
TasaPosicionC
orta
Transaction D
ate
Contract
Expiry Date
Market Value
Of Target
Asset A
s Of
Rep. Date M
$
Market
Exchange Rate
Market Rate
Long Position
Market Rate
Short Position
PRESENT
VALU
E LON
G
POSITIO
N
M$
Present Value Short Position M
$
Fair Value O
f Swap
Contract A
s O
f Rep. Date
M$
Information
Origin
HEDGING
142 1 Credit Suisse First Boston
Inglaterra A 59.217,00 2.000.000,00 UF AVE 530,80 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
427 1 Banco Santander
Chile AAA 58.693,00 2.200.000,00 UF AVE 560,40 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
428 1 Credit Suisse First Boston
Inglaterra A 107.586,00 4.000.000,00 UF AVE 564,65 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
506 1 Deutsche Bank London
Inglaterra A 26.298,00 1.000.000,00 UF AVE 549,00 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
505 1 Deutsche Bank London
Inglaterra A 26.298,00 1.000.000,00 UF AVE 549,00 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
504 1 Deutsche Bank London
Inglaterra A 52.596,00 2.000.000,00 UF AVE 549,00 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
527 1 Banco Santander
Chile AAA 102.601,00 4.000.000,00 UF AVE 536,00 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
528 1 Banco Santander
Chile AAA 25.650,00 1.000.000,00 UF AVE 536,00 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
538 1 Deutsche Bank London
Inglaterra A 12.662,00 500.000,00 UF AVE 530,20 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
694 1 Banco BBVA Chile
Chile AA- 25.804,00 1.000.000,00 UF AVE 544,25 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
695 1 Banco BBVA Chile
Chile AA- 12.902,00 500.000,00 UF AVE 544,25 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
696 1 Credit Suisse First Boston
Inglaterra A 76.367,00 3.000.000,00 UF AVE 537,00 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
712 1 Deutsche Bank London
Inglaterra A 125.279,00 5.000.000,00 UF AVE 530,32 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
713 1 Deutsche Bank London
Inglaterra A 12.528,00 500.000,00 UF AVE 530,32 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
714 1 Deutsche Bank London
Inglaterra A 25.056,00 1.000.000,00 UF AVE 530,32 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
731 1 Goldman Sachs
Estados Unidos
A- 50.405,00 2.000.000,00 UF AVE 534,99 5.01% 7% 13-07-2010 20-01-2020 959.920 479,96 5.01% 7% 1.176.261 990.802 185.459 BLOOMBERG
732 1 Goldman Sachs
Estados Unidos
A- 12.601,00 500.000,00 UF AVE 534,99 5.01% 7% 13-07-2010 20-01-2020 239.980 479,96 5.01% 7% 294.065 247.700 46.365 BLOOMBERG
128
AUDITED FINANCIAL STATEMENTS
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
Risk Rating
Nom
inal Long Position
Nom
inal Short Position
Currency Long
Position
Currency Short
Position
Tipo Cam
bio C
ontrato
Tasa Posicion Larga
TasaPosicionC
orta
Transaction Date
Contract Expiry
Date
Market Value O
f Target A
sset As
Of Rep. D
ate M$
Market Exchange
Rate
Market Rate Long
Position
Market Rate Short
Position
PRESENT VA
LUE
LON
G PO
SITION
M
$
Present Value Short Position M
$
Fair Value Of
Swap C
ontract As
Of Rep. D
ate M$
Information
Origin
HEDGING
740 1 Deutsche Bank London
Inglaterra A 48.852,00 2.000.000,00 UF AVE 518,50 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
741 1 Goldman Sachs
Estados Unidos
A- 74.055,00 3.000.000,00 UF AVE 524,00 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
746 1 Deutsche Bank London
Inglaterra A 49.012,00 2.000.000,00 UF AVE 520,20 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
747 1 Deutsche Bank London
Inglaterra A 49.012,00 2.000.000,00 UF AVE 520,20 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
766 1 Credit Suisse First Boston
Inglaterra A 96.573,00 4.000.000,00 UF AVE 512,60 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
756 1 Goldman Sachs
Estados Unidos
A- 96.978,00 4.000.000,00 UF AVE 514,85 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
863 1 Hsbc Bank Chile
Chile AAA 44.603,00 2.000.000,00 UF AVE 477,88 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
864 1 Deutsche Bank London
Inglaterra A 33.738,00 1.500.000,00 UF AVE 482,00 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
867 1 J.p Morgan & Co.
Estados Unidos
A 45.440,00 2.000.000,00 UF AVE 486,97 6.12% 7% 29-11-2010 20-01-2020 959.920 479,96 6.12% 7% 1.066.374 990.802 75.572 BLOOMBERG
866 1 J.p Morgan & Co.
Estados Unidos
A 45.440,00 2.000.000,00 UF AVE 486,97 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
894 1 Banco De Chile
Chile AAA 92.636,00 4.000.000,00 UF AVE 497,00 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
898 1 Hsbc Bank Usa N.a.
Estados Unidos
A+ 46.497,00 2.000.000,00 UF AVE 498,97 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
897 1 Hsbc Bank Usa N.a.
Estados Unidos
A+ 23.248,00 1.000.000,00 UF AVE 498,97 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
913 1 J.p Morgan & Co.
Estados Unidos
A 22.824,00 1.000.000,00 UF AVE 489,89 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
915 1 Hsbc Bank Usa N.a.
Estados Unidos
A+ 68.415,00 3.000.000,00 UF AVE 489,50 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
914 1 J.p Morgan & Co.
Estados Unidos
A 11.379,00 500.000,00 UF AVE 488,49 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
924 1 Banco BBVA Chile
Chile AA- 80.276,00 3.500.000,00 UF AVE 492,44 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
929 1 Banco BBVA Chile
Chile AA- 55.930,00 2.500.000,00 UF AVE 480,50 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
942 1 Banco BBVA Chile
Chile AA- 65.388,00 3.000.000,00 UF AVE 468,70 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
129
AUDITED FINANCIAL STATEMENTS
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
Risk Rating
Nom
inal Long Position
Nom
inal Short Position
Currency Long
Position
Currency Short
Position
Tipo Cam
bio C
ontrato
Tasa Posicion Larga
TasaPosicionC
orta
Transaction Date
Contract Expiry
Date
Market Value O
f Target A
sset As
Of Rep. D
ate M$
Market Exchange
Rate
Market Rate Long
Position
Market Rate Short
Position
PRESENT VA
LUE
LON
G PO
SITION
M
$
Present Value Short Position M
$
Fair Value Of
Swap C
ontract As
Of Rep. D
ate M$
Information
Origin
HEDGING
740 1 Deutsche Bank London
Inglaterra A 48.852,00 2.000.000,00 UF AVE 518,50 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
741 1 Goldman Sachs
Estados Unidos
A- 74.055,00 3.000.000,00 UF AVE 524,00 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
746 1 Deutsche Bank London
Inglaterra A 49.012,00 2.000.000,00 UF AVE 520,20 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
747 1 Deutsche Bank London
Inglaterra A 49.012,00 2.000.000,00 UF AVE 520,20 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
766 1 Credit Suisse First Boston
Inglaterra A 96.573,00 4.000.000,00 UF AVE 512,60 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
756 1 Goldman Sachs
Estados Unidos
A- 96.978,00 4.000.000,00 UF AVE 514,85 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
863 1 Hsbc Bank Chile
Chile AAA 44.603,00 2.000.000,00 UF AVE 477,88 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
864 1 Deutsche Bank London
Inglaterra A 33.738,00 1.500.000,00 UF AVE 482,00 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
867 1 J.p Morgan & Co.
Estados Unidos
A 45.440,00 2.000.000,00 UF AVE 486,97 6.12% 7% 29-11-2010 20-01-2020 959.920 479,96 6.12% 7% 1.066.374 990.802 75.572 BLOOMBERG
866 1 J.p Morgan & Co.
Estados Unidos
A 45.440,00 2.000.000,00 UF AVE 486,97 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
894 1 Banco De Chile
Chile AAA 92.636,00 4.000.000,00 UF AVE 497,00 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
898 1 Hsbc Bank Usa N.a.
Estados Unidos
A+ 46.497,00 2.000.000,00 UF AVE 498,97 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
897 1 Hsbc Bank Usa N.a.
Estados Unidos
A+ 23.248,00 1.000.000,00 UF AVE 498,97 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
913 1 J.p Morgan & Co.
Estados Unidos
A 22.824,00 1.000.000,00 UF AVE 489,89 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
915 1 Hsbc Bank Usa N.a.
Estados Unidos
A+ 68.415,00 3.000.000,00 UF AVE 489,50 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
914 1 J.p Morgan & Co.
Estados Unidos
A 11.379,00 500.000,00 UF AVE 488,49 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
924 1 Banco BBVA Chile
Chile AA- 80.276,00 3.500.000,00 UF AVE 492,44 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
929 1 Banco BBVA Chile
Chile AA- 55.930,00 2.500.000,00 UF AVE 480,50 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
942 1 Banco BBVA Chile
Chile AA- 65.388,00 3.000.000,00 UF AVE 468,70 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
130
AUDITED FINANCIAL STATEMENTS
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
Risk Rating
Nom
inal Long Position
Nom
inal Short Position
Currency Long
Position
Currency Short
Position
Tipo Cam
bio C
ontrato
Tasa Posicion Larga
TasaPosicionC
orta
Transaction Date
Contract Expiry
Date
Market Value O
f Target A
sset As
Of Rep. D
ate M$
Market
Exchange Rate
Market Rate
Long Position
Market Rate
Short Position
PRESENT
VALU
E LON
G
POSITIO
N M
$
Present Value Short Position M
$
Fair Value Of
Swap C
ontract A
s Of Rep. D
ate M
$
Information
Origin
HEDGING
948 1Banco BBVA Chile
Chile AA- 11.039,00 500.000,00 UF AVE 475,10 4.54% 6% 25-02-2011 21-01-2020 239.980 479,96 4.54% 6% 256.976 246.373 10.603 BLOOMBERG
971 1Banco De Chile
Chile AAA 19.803,00 883.300,00 UF AVE 483,30 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
1015 1Banco Bbva Chile
Chile AA- 107.996,00 5.000.000,00 UF AVE 470,80 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
1016 1J.p Morgan & Co.
Estados Unidos
A 86.053,00 4.000.000,00 UF AVE 469,20 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
1017 1J.p Morgan & Co.
Estados Unidos
A 32.270,00 1.500.000,00 UF AVE 469,20 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
1024 1Banco Santander
Chile AAA 64.264,00 2.977.330,00 UF AVE 471,60 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
1031 1Banco BBVA Chile
Chile AA- 63.917,00 3.000.000,00 UF AVE 467,00 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
1034 1Banco BBVA Chile
Chile AA- 63.403,00 3.000.000,00 UF AVE 463,30 10.14% 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
1036 1J.p Morgan & Co.
Estados Unidos
A 21.095,00 1.000.000,00 UF AVE 462,50 4.44% 5.95% 13-07-2011 03-06-2021 479.960 479,96 4.44% 5.95% 482.932 482.143 789 BLOOMBERG
1045 1Banco BBVA Chile
Chile AA- 21.084,00 1.000.000,00 UF AVE 462,55 10.07% 9.5% 25-07-2011 15-08-2014 479.960 479,96 10.07% 9.5% 500.492 497.676 2.816 BLOOMBERG
1046 1Banco BBVA Chile
Chile AA- 21.084,00 1.000.000,00 UF AVE 462,55 10.07% 9.5% 25-07-2011 15-08-2014 479.960 479,96 10.07% 9.5% 500.492 497.676 2.816 BLOOMBERG
1061 1Credit Suisse First Boston
Inglaterra A 86.772,00 4.050.000,00 UF AVE 470,52 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
1060 1Hsbc Bank Usa N.a.
Estados Unidos
A+ 42.892,00 2.000.000,00 UF AVE 471,00 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
1070 1Banco BBVA Chile
Chile AA- 74.973,00 3.520.000,00 UF AVE 467,85 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
1071 1Banco De Chile
Chile AAA 42.603,00 2.000.000,00 UF AVE 467,90 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
1075 1Banco Santander
Chile AAA 42.740,00 2.000.000,00 UF AVE 469,44 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
1076 1Banco Santander
Chile AAA 25.680,00 1.200.000,00 UF AVE 470,10 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
1079 1Barclays Bank Plc
Estados Unidos
A- 21.300,00 1.000.000,00 UF AVE 468,00 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
1083 1Banco BBVA Chile
Chile AA- 42.295,00 2.000.000,00 UF AVE 464,70 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
1084 1J.p Morgan & Co.
Estados Unidos
A 19.034,00 900.000,00 UF AVE 464,75 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
131
AUDITED FINANCIAL STATEMENTS
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
Risk Rating
Nom
inal Long Position
Nom
inal Short Position
Currency Long
Position
Currency Short
Position
Tipo Cam
bio C
ontrato
Tasa Posicion Larga
TasaPosicionC
orta
Transaction Date
Contract Expiry
Date
Market Value O
f Target A
sset As
Of Rep. D
ate M$
Market
Exchange Rate
Market Rate
Long Position
Market Rate
Short Position
PRESENT
VALU
E LON
G
POSITIO
N M
$
Present Value Short Position M
$
Fair Value Of
Swap C
ontract A
s Of Rep. D
ate M
$
Information
Origin
HEDGING
948 1Banco BBVA Chile
Chile AA- 11.039,00 500.000,00 UF AVE 475,10 4.54% 6% 25-02-2011 21-01-2020 239.980 479,96 4.54% 6% 256.976 246.373 10.603 BLOOMBERG
971 1Banco De Chile
Chile AAA 19.803,00 883.300,00 UF AVE 483,30 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
1015 1Banco Bbva Chile
Chile AA- 107.996,00 5.000.000,00 UF AVE 470,80 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
1016 1J.p Morgan & Co.
Estados Unidos
A 86.053,00 4.000.000,00 UF AVE 469,20 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
1017 1J.p Morgan & Co.
Estados Unidos
A 32.270,00 1.500.000,00 UF AVE 469,20 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
1024 1Banco Santander
Chile AAA 64.264,00 2.977.330,00 UF AVE 471,60 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
1031 1Banco BBVA Chile
Chile AA- 63.917,00 3.000.000,00 UF AVE 467,00 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
1034 1Banco BBVA Chile
Chile AA- 63.403,00 3.000.000,00 UF AVE 463,30 10.14% 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
1036 1J.p Morgan & Co.
Estados Unidos
A 21.095,00 1.000.000,00 UF AVE 462,50 4.44% 5.95% 13-07-2011 03-06-2021 479.960 479,96 4.44% 5.95% 482.932 482.143 789 BLOOMBERG
1045 1Banco BBVA Chile
Chile AA- 21.084,00 1.000.000,00 UF AVE 462,55 10.07% 9.5% 25-07-2011 15-08-2014 479.960 479,96 10.07% 9.5% 500.492 497.676 2.816 BLOOMBERG
1046 1Banco BBVA Chile
Chile AA- 21.084,00 1.000.000,00 UF AVE 462,55 10.07% 9.5% 25-07-2011 15-08-2014 479.960 479,96 10.07% 9.5% 500.492 497.676 2.816 BLOOMBERG
1061 1Credit Suisse First Boston
Inglaterra A 86.772,00 4.050.000,00 UF AVE 470,52 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
1060 1Hsbc Bank Usa N.a.
Estados Unidos
A+ 42.892,00 2.000.000,00 UF AVE 471,00 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
1070 1Banco BBVA Chile
Chile AA- 74.973,00 3.520.000,00 UF AVE 467,85 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
1071 1Banco De Chile
Chile AAA 42.603,00 2.000.000,00 UF AVE 467,90 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
1075 1Banco Santander
Chile AAA 42.740,00 2.000.000,00 UF AVE 469,44 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
1076 1Banco Santander
Chile AAA 25.680,00 1.200.000,00 UF AVE 470,10 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
1079 1Barclays Bank Plc
Estados Unidos
A- 21.300,00 1.000.000,00 UF AVE 468,00 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
1083 1Banco BBVA Chile
Chile AA- 42.295,00 2.000.000,00 UF AVE 464,70 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
1084 1J.p Morgan & Co.
Estados Unidos
A 19.034,00 900.000,00 UF AVE 464,75 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
132
AUDITED FINANCIAL STATEMENTS
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
Risk Rating
Nom
inal Long Position
Nom
inal Short Position
Currency Long
Position
Currency Short
Position
Tipo Cam
bio C
ontrato
Tasa Posicion Larga
TasaPosicionC
orta
Transaction Date
Contract Expiry
Date
Market Value O
f Target A
sset As
Of Rep. D
ate M$
Market
Exchange Rate
Market Rate
Long Position
Market Rate
Short Position
PRESENT
VALU
E LON
G
POSITIO
N M
$
Present Value Short Position M
$
Fair Value Of
Swap C
ontract A
s Of Rep. D
ate M
$
Information
Origin
HEDGING
1086 1J.p Morgan & Co.
Estados Unidos
A 42.297,00 2.000.000,00 UF AVE 464,75 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
1087 1J.p Morgan & Co.
Estados Unidos
A 35.783,00 1.692.000,00 UF AVE 464,75 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
1092 1Deutsche Bank London
Inglaterra A 42.183,00 2.000.000,00 UF AVE 463,50 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
1096 1Barclays Bank Plc
Estados Unidos
A- 20.954,00 1.000.000,00 UF AVE 460,50 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
1109 1Hsbc Bank Usa N.a.
Estados Unidos
A+ 31.630,00 1.500.000,00 UF AVE 463,51 4.91% 5.95% 08-09-2011 16-09-2020 719.940 479,96 4.91% 5.95% 730.878 730.786 92 BLOOMBERG
1106 1Banco Santander
Chile AAA 21.045,00 1.000.000,00 UF AVE 462,60 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
1105 1Barclays Bank Plc
Estados Unidos
A- 63.632,00 3.000.000,00 UF AVE 466,25 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
1107 1Barclays Bank Plc
Estados Unidos
A- 54.064,00 2.500.000,00 UF AVE 475,50 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
1120 1Banco Santander
Chile AAA 66.824,00 3.000.000,00 UF AVE 490,00 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
1121 1Barclays Bank Plc
Estados Unidos
A- 11.364,00 500.000,00 UF AVE 500,00 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
1126 1J.p Morgan & Co.
Estados Unidos
A 45.722,00 2.000.000,00 UF AVE 503,13 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
1127 1J.p Morgan & Co.
Estados Unidos
A 57.153,00 2.500.000,00 UF AVE 503,14 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
1141 1Barclays Bank Plc
Estados Unidos
A- 95.050,00 4.100.000,00 UF AVE 510,25 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
1142 1Hsbc Bank Usa N.a.
Estados Unidos
A+ 63.282,00 2.730.000,00 UF AVE 510,19 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
1143 1Hsbc Bank Usa N.a.
Estados Unidos
A+ 46.361,00 2.000.000,00 UF AVE 510,19 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
1144 1Barclays Bank Plc
Estados Unidos
A- 23.458,00 1.000.000,00 UF AVE 516,30 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
1145 1Barclays Bank Plc
Estados Unidos
A- 115.188,00 5.000.000,00 UF AVE 507,05 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
1146 1Barclays Bank Plc
Estados Unidos
A- 46.916,00 2.000.000,00 UF AVE 516,30 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
1180 1Deutsche Bank London
Inglaterra A 70.150,00 3.043.000,00 UF AVE 508,50 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
1181 1Deutsche Bank London
Inglaterra A 34.580,00 1.500.000,00 UF AVE 508,50 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
133
AUDITED FINANCIAL STATEMENTS
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
Risk Rating
Nom
inal Long Position
Nom
inal Short Position
Currency Long
Position
Currency Short
Position
Tipo Cam
bio C
ontrato
Tasa Posicion Larga
TasaPosicionC
orta
Transaction Date
Contract Expiry
Date
Market Value O
f Target A
sset As
Of Rep. D
ate M$
Market
Exchange Rate
Market Rate
Long Position
Market Rate
Short Position
PRESENT
VALU
E LON
G
POSITIO
N M
$
Present Value Short Position M
$
Fair Value Of
Swap C
ontract A
s Of Rep. D
ate M
$
Information
Origin
HEDGING
1086 1J.p Morgan & Co.
Estados Unidos
A 42.297,00 2.000.000,00 UF AVE 464,75 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
1087 1J.p Morgan & Co.
Estados Unidos
A 35.783,00 1.692.000,00 UF AVE 464,75 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
1092 1Deutsche Bank London
Inglaterra A 42.183,00 2.000.000,00 UF AVE 463,50 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
1096 1Barclays Bank Plc
Estados Unidos
A- 20.954,00 1.000.000,00 UF AVE 460,50 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
1109 1Hsbc Bank Usa N.a.
Estados Unidos
A+ 31.630,00 1.500.000,00 UF AVE 463,51 4.91% 5.95% 08-09-2011 16-09-2020 719.940 479,96 4.91% 5.95% 730.878 730.786 92 BLOOMBERG
1106 1Banco Santander
Chile AAA 21.045,00 1.000.000,00 UF AVE 462,60 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
1105 1Barclays Bank Plc
Estados Unidos
A- 63.632,00 3.000.000,00 UF AVE 466,25 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
1107 1Barclays Bank Plc
Estados Unidos
A- 54.064,00 2.500.000,00 UF AVE 475,50 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
1120 1Banco Santander
Chile AAA 66.824,00 3.000.000,00 UF AVE 490,00 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
1121 1Barclays Bank Plc
Estados Unidos
A- 11.364,00 500.000,00 UF AVE 500,00 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
1126 1J.p Morgan & Co.
Estados Unidos
A 45.722,00 2.000.000,00 UF AVE 503,13 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
1127 1J.p Morgan & Co.
Estados Unidos
A 57.153,00 2.500.000,00 UF AVE 503,14 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
1141 1Barclays Bank Plc
Estados Unidos
A- 95.050,00 4.100.000,00 UF AVE 510,25 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
1142 1Hsbc Bank Usa N.a.
Estados Unidos
A+ 63.282,00 2.730.000,00 UF AVE 510,19 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
1143 1Hsbc Bank Usa N.a.
Estados Unidos
A+ 46.361,00 2.000.000,00 UF AVE 510,19 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
1144 1Barclays Bank Plc
Estados Unidos
A- 23.458,00 1.000.000,00 UF AVE 516,30 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
1145 1Barclays Bank Plc
Estados Unidos
A- 115.188,00 5.000.000,00 UF AVE 507,05 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
1146 1Barclays Bank Plc
Estados Unidos
A- 46.916,00 2.000.000,00 UF AVE 516,30 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
1180 1Deutsche Bank London
Inglaterra A 70.150,00 3.043.000,00 UF AVE 508,50 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
1181 1Deutsche Bank London
Inglaterra A 34.580,00 1.500.000,00 UF AVE 508,50 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
134
AUDITED FINANCIAL STATEMENTS
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
Risk Rating
Nom
inal Long Position
Nom
inal Short Position
Currency Long
Position
Currency Short
Position
Tipo Cam
bio C
ontrato
Tasa Posicion Larga
TasaPosicionC
orta
Transaction Date
Contract Expiry
Date
Market Value O
f Target A
sset As
Of Rep. D
ate M$
Market
Exchange Rate
Market Rate
Long Position
Market Rate
Short Position
PRESENT
VALU
E LON
G
POSITIO
N M
$
Present Value Short Position M
$
Fair Value Of
Swap C
ontract A
s Of Rep. D
ate M
$
Information
Origin
HEDGING
1185 1Morgan Stanley
Estados Unidos
BBB+ 90.706,00 4.000.000,00 UF AVE 501,00 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
1187 1Morgan Stanley
Estados Unidos
BBB+ 45.353,00 2.000.000,00 UF AVE 500,84 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
1182 1Deutsche Bank London
Inglaterra A 22.697,00 1.000.000,00 UF AVE 501,30 5.06% 6% 18-10-2011 18-11-2020 479.960 479,96 5.06% 6% 529.732 492.746 36.986 BLOOMBERG
1248 1Morgan Stanley
Estados Unidos
BBB+ 89.438,00 4.000.000,00 UF AVE 495,00 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
1249 1Morgan Stanley
Estados Unidos
BBB+ 67.079,00 3.000.000,00 UF AVE 495,00 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
1246 1Banco Bbva Chile
Chile AA- 56.453,00 2.500.000,00 UF AVE 499,70 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
1247 1Banco Bbva Chile
Chile AA- 112.907,00 5.000.000,00 UF AVE 499,70 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
1281 1Hsbc Bank Usa N.a.
Estados Unidos
A+ 61.312,00 2.000.000,00 UF EUR 682,00 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
1282 1Hsbc Bank Usa N.a.
Estados Unidos
A+ 153.281,00 5.000.000,00 UF EUR 682,00 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
1315 1J.p Morgan & Co.
Estados Unidos
A 115.703,00 5.000.000,00 UF AVE 515,00 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
1314 1Banco De Chile
Chile AAA 115.680,00 5.000.000,00 UF AVE 514,90 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
1317 1J.p Morgan & Co.
Estados Unidos
A 93.568,00 4.000.000,00 UF AVE 520,90 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
1310 1Barclays Bank Plc
Estados Unidos
A- 46.748,00 2.000.000,00 UF AVE 520,50 4.79% 5% 19-12-2011 29-07-2019 959.920 479,96 4.79% 5% 1.099.222 992.369 106.853 BLOOMBERG
1318 1J.p Morgan & Co.
Estados Unidos
A 46.784,00 2.000.000,00 UF AVE 520,90 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
1444 1Banco Bbva Chile
Chile AA- 21.346,00 1.000.000,00 UF AVE 478,60 4,350% 5,375% 03-02-2012 02-02-2022 479.960 479,96 4,350% 5,375% 495.632 490.267 5.365 BLOOMBERG
1457 1Banco Bbva Chile
Chile AA- 42.691,00 2.000.000,00 UF AVE 478,60 4,350% 5,375% 03-02-2012 02-02-2022 959.920 479,96 4,350% 5,375% 991.263 980.534 10.729 BLOOMBERG
1458 1Banco Bbva Chile
Chile AA- 42.691,00 2.000.000,00 UF AVE 478,60 4,350% 5,375% 03-02-2012 02-02-2022 959.920 479,96 4,350% 5,375% 991.263 980.534 10.729 BLOOMBERG
1443 1Banco Santander
Chile AAA 21.183,00 1.000.000,00 UF AVE 475,50 4,300% 5,375% 09-02-2012 02-02-2022 479.960 479,96 4,300% 5,375% 491.740 490.267 1.473 BLOOMBERG
1472 1Banco Bbva Chile
Chile AA- 121.638,00 5.746.234,00 UF AVE 475,50 6,950% 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
1539 1Jpmorgan Chase Bank N.a
Chile AAA 85.418,00 4.000.000,00 UF AVE 481,50 4,950% 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
135
AUDITED FINANCIAL STATEMENTS
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
Risk Rating
Nom
inal Long Position
Nom
inal Short Position
Currency Long
Position
Currency Short
Position
Tipo Cam
bio C
ontrato
Tasa Posicion Larga
TasaPosicionC
orta
Transaction Date
Contract Expiry
Date
Market Value O
f Target A
sset As
Of Rep. D
ate M$
Market
Exchange Rate
Market Rate
Long Position
Market Rate
Short Position
PRESENT
VALU
E LON
G
POSITIO
N M
$
Present Value Short Position M
$
Fair Value Of
Swap C
ontract A
s Of Rep. D
ate M
$
Information
Origin
HEDGING
1185 1Morgan Stanley
Estados Unidos
BBB+ 90.706,00 4.000.000,00 UF AVE 501,00 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
1187 1Morgan Stanley
Estados Unidos
BBB+ 45.353,00 2.000.000,00 UF AVE 500,84 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
1182 1Deutsche Bank London
Inglaterra A 22.697,00 1.000.000,00 UF AVE 501,30 5.06% 6% 18-10-2011 18-11-2020 479.960 479,96 5.06% 6% 529.732 492.746 36.986 BLOOMBERG
1248 1Morgan Stanley
Estados Unidos
BBB+ 89.438,00 4.000.000,00 UF AVE 495,00 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
1249 1Morgan Stanley
Estados Unidos
BBB+ 67.079,00 3.000.000,00 UF AVE 495,00 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
1246 1Banco Bbva Chile
Chile AA- 56.453,00 2.500.000,00 UF AVE 499,70 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
1247 1Banco Bbva Chile
Chile AA- 112.907,00 5.000.000,00 UF AVE 499,70 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
1281 1Hsbc Bank Usa N.a.
Estados Unidos
A+ 61.312,00 2.000.000,00 UF EUR 682,00 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
1282 1Hsbc Bank Usa N.a.
Estados Unidos
A+ 153.281,00 5.000.000,00 UF EUR 682,00 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
1315 1J.p Morgan & Co.
Estados Unidos
A 115.703,00 5.000.000,00 UF AVE 515,00 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
1314 1Banco De Chile
Chile AAA 115.680,00 5.000.000,00 UF AVE 514,90 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
1317 1J.p Morgan & Co.
Estados Unidos
A 93.568,00 4.000.000,00 UF AVE 520,90 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
1310 1Barclays Bank Plc
Estados Unidos
A- 46.748,00 2.000.000,00 UF AVE 520,50 4.79% 5% 19-12-2011 29-07-2019 959.920 479,96 4.79% 5% 1.099.222 992.369 106.853 BLOOMBERG
1318 1J.p Morgan & Co.
Estados Unidos
A 46.784,00 2.000.000,00 UF AVE 520,90 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
1444 1Banco Bbva Chile
Chile AA- 21.346,00 1.000.000,00 UF AVE 478,60 4,350% 5,375% 03-02-2012 02-02-2022 479.960 479,96 4,350% 5,375% 495.632 490.267 5.365 BLOOMBERG
1457 1Banco Bbva Chile
Chile AA- 42.691,00 2.000.000,00 UF AVE 478,60 4,350% 5,375% 03-02-2012 02-02-2022 959.920 479,96 4,350% 5,375% 991.263 980.534 10.729 BLOOMBERG
1458 1Banco Bbva Chile
Chile AA- 42.691,00 2.000.000,00 UF AVE 478,60 4,350% 5,375% 03-02-2012 02-02-2022 959.920 479,96 4,350% 5,375% 991.263 980.534 10.729 BLOOMBERG
1443 1Banco Santander
Chile AAA 21.183,00 1.000.000,00 UF AVE 475,50 4,300% 5,375% 09-02-2012 02-02-2022 479.960 479,96 4,300% 5,375% 491.740 490.267 1.473 BLOOMBERG
1472 1Banco Bbva Chile
Chile AA- 121.638,00 5.746.234,00 UF AVE 475,50 6,950% 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
1539 1Jpmorgan Chase Bank N.a
Chile AAA 85.418,00 4.000.000,00 UF AVE 481,50 4,950% 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
136
AUDITED FINANCIAL STATEMENTS
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
Risk Rating
Nom
inal Long Position
Nom
inal Short Position
Currency Long
Position
Currency Short
Position
Tipo Cam
bio C
ontrato
Tasa Posicion Larga
TasaPosicionC
orta
Transaction D
ate
Contract Expiry
Date
Market Value
Of Target A
sset A
s Of Rep.
Date M
$
Market
Exchange Rate
Market Rate
Long Position
Market Rate
Short Position
PRESENT
VALU
E LON
G
POSITIO
N M
$
Present Value Short Position M
$
Fair Value Of
Swap C
ontract A
s Of Rep.
Date M
$
Information
Origin
HEDGING
1540 1Deutsche Bank London
Inglaterra A 21.446,00 1.000.000,00 UF AVE 483,90 4,910% 4,625% 12-04-2012 13-02-2017 479.960 479,96 4,910% 4,625% 498.714 488.102 10.612 BLOOMBERG
1638 1J.p Morgan & Co.
Estados Unidos
A 110.928,00 5.000.000,00 UF AVE 502,00 4,800% 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
1639 1J.p Morgan & Co.
Estados Unidos
A 22.186,00 1.000.000,00 UF AVE 502,00 4,800% 5,875% 29-06-2012 09-07-2022 479.960 479,96 4,800% 5,875% 517.867 493.408 24.459 BLOOMBERG
1671 1Banco Bbva Chile
Chile AA- 21.843,00 1.000.000,00 UF AVE 494,20 4,970% 5,875% 10-07-2012 11-07-2022 479.960 479,96 4,970% 5,875% 510.420 493.408 17.012 BLOOMBERG
1672 1Banco Santander
Chile AAA 10.874,00 500.000,00 UF AVE 492,00 4,970% 5,875% 11-07-2012 11-07-2022 239.980 479,96 4,970% 5,875% 254.057 246.704 7.353 BLOOMBERG
1673 1 Banco Santander
Chile AAA 43.677,00 2.000.000,00 UF AVE 494,00 5,190% 4,875% 12-07-2012 11-07-2022 959.920 479,96 5,190% 4,875% 1.020.459 986.816 33.643 BLOOMBERG
1682 1 Barclays Bank Plc
Estados Unidos
A- 66.162,00 2.500.000,00 UF EUR 597,90 5,780% 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
1696 1 Deutsche Bank London
Inglaterra A 85.896,00 4.000.000,00 UF AVE 485,10 4,650% 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
1694 1 Banco Santander
Chile AAA 64.282,00 3.000.000,00 UF AVE 484,00 6,900% 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
1695 1 Barclays Bank Plc
Estados Unidos
A- 53.332,00 2.488.000,00 UF AVE 484,00 6,960% 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
1721 1 Barclays Bank Plc
Estados Unidos
A- 53.359,00 2.000.000,00 UF EUR 601,88 6,970% 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
1722 1 Barclays Bank Plc
Estados Unidos
A- 42.656,00 2.000.000,00 UF AVE 481,15 4,685% 4,250% 30-08-2012 04-06-2018 959.920 479,96 4,685% 4,250% 980.072 965.652 14.420 BLOOMBERG
1724 1 Barclays Bank Plc
Estados Unidos
A- 53.535,00 2.000.000,00 UF EUR 603,86 7,040% 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
1725 1 Barclays Bank Plc
Estados Unidos
A- 31.919,00 1.500.000,00 UF AVE 480,05 4,280% 5,125% 31-08-2012 04-06-2018 719.940 479,96 4,280% 5,125% 733.452 724.239 9.213 BLOOMBERG
1742 1 Banco Santander
Chile AAA 63.162,00 3.000.000,00 UF AVE 475,00 5,930% 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
1745 1 Banco Santander
Chile AAA 42.108,00 2.000.000,00 UF AVE 475,00 6,500% 7,875% 10-09-2012 30-09-2022 959.920 479,96 6,500% 7,875% 987.173 989.617 (2.444) BLOOMBERG
1744 1 Banco Santander
Chile AAA 31.581,00 1.500.000,00 UF AVE 475,00 5,930% 6,750% 10-09-2012 30-09-2022 719.940 479,96 5,930% 6,750% 740.380 742.213 (1.833) BLOOMBERG
1743 1 Banco Santander
Chile AAA 21.054,00 1.000.000,00 UF AVE 475,00 5,930% 6,750% 10-09-2012 30-09-2022 479.960 479,96 5,930% 6,750% 493.587 494.808 (1.221) BLOOMBERG
1749 1 Deutsche Bank London
Inglaterra A 42.034,00 2.000.000,00 UF AVE 474,20 6,500% 7,875% 11-09-2012 01-02-2027 959.920 479,96 6,500% 7,875% 986.570 993.950 (7.380) BLOOMBERG
1750 1 Deutsche Bank London
Inglaterra A 46.868,00 2.230.000,00 UF AVE 474,20 6,200% 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
137
AUDITED FINANCIAL STATEMENTS
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
Risk Rating
Nom
inal Long Position
Nom
inal Short Position
Currency Long
Position
Currency Short
Position
Tipo Cam
bio C
ontrato
Tasa Posicion Larga
TasaPosicionC
orta
Transaction D
ate
Contract Expiry
Date
Market Value
Of Target A
sset A
s Of Rep.
Date M
$
Market
Exchange Rate
Market Rate
Long Position
Market Rate
Short Position
PRESENT
VALU
E LON
G
POSITIO
N M
$
Present Value Short Position M
$
Fair Value Of
Swap C
ontract A
s Of Rep.
Date M
$
Information
Origin
HEDGING
1540 1Deutsche Bank London
Inglaterra A 21.446,00 1.000.000,00 UF AVE 483,90 4,910% 4,625% 12-04-2012 13-02-2017 479.960 479,96 4,910% 4,625% 498.714 488.102 10.612 BLOOMBERG
1638 1J.p Morgan & Co.
Estados Unidos
A 110.928,00 5.000.000,00 UF AVE 502,00 4,800% 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
1639 1J.p Morgan & Co.
Estados Unidos
A 22.186,00 1.000.000,00 UF AVE 502,00 4,800% 5,875% 29-06-2012 09-07-2022 479.960 479,96 4,800% 5,875% 517.867 493.408 24.459 BLOOMBERG
1671 1Banco Bbva Chile
Chile AA- 21.843,00 1.000.000,00 UF AVE 494,20 4,970% 5,875% 10-07-2012 11-07-2022 479.960 479,96 4,970% 5,875% 510.420 493.408 17.012 BLOOMBERG
1672 1Banco Santander
Chile AAA 10.874,00 500.000,00 UF AVE 492,00 4,970% 5,875% 11-07-2012 11-07-2022 239.980 479,96 4,970% 5,875% 254.057 246.704 7.353 BLOOMBERG
1673 1 Banco Santander
Chile AAA 43.677,00 2.000.000,00 UF AVE 494,00 5,190% 4,875% 12-07-2012 11-07-2022 959.920 479,96 5,190% 4,875% 1.020.459 986.816 33.643 BLOOMBERG
1682 1 Barclays Bank Plc
Estados Unidos
A- 66.162,00 2.500.000,00 UF EUR 597,90 5,780% 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
1696 1 Deutsche Bank London
Inglaterra A 85.896,00 4.000.000,00 UF AVE 485,10 4,650% 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
1694 1 Banco Santander
Chile AAA 64.282,00 3.000.000,00 UF AVE 484,00 6,900% 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
1695 1 Barclays Bank Plc
Estados Unidos
A- 53.332,00 2.488.000,00 UF AVE 484,00 6,960% 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
1721 1 Barclays Bank Plc
Estados Unidos
A- 53.359,00 2.000.000,00 UF EUR 601,88 6,970% 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
1722 1 Barclays Bank Plc
Estados Unidos
A- 42.656,00 2.000.000,00 UF AVE 481,15 4,685% 4,250% 30-08-2012 04-06-2018 959.920 479,96 4,685% 4,250% 980.072 965.652 14.420 BLOOMBERG
1724 1 Barclays Bank Plc
Estados Unidos
A- 53.535,00 2.000.000,00 UF EUR 603,86 7,040% 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
1725 1 Barclays Bank Plc
Estados Unidos
A- 31.919,00 1.500.000,00 UF AVE 480,05 4,280% 5,125% 31-08-2012 04-06-2018 719.940 479,96 4,280% 5,125% 733.452 724.239 9.213 BLOOMBERG
1742 1 Banco Santander
Chile AAA 63.162,00 3.000.000,00 UF AVE 475,00 5,930% 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
1745 1 Banco Santander
Chile AAA 42.108,00 2.000.000,00 UF AVE 475,00 6,500% 7,875% 10-09-2012 30-09-2022 959.920 479,96 6,500% 7,875% 987.173 989.617 (2.444) BLOOMBERG
1744 1 Banco Santander
Chile AAA 31.581,00 1.500.000,00 UF AVE 475,00 5,930% 6,750% 10-09-2012 30-09-2022 719.940 479,96 5,930% 6,750% 740.380 742.213 (1.833) BLOOMBERG
1743 1 Banco Santander
Chile AAA 21.054,00 1.000.000,00 UF AVE 475,00 5,930% 6,750% 10-09-2012 30-09-2022 479.960 479,96 5,930% 6,750% 493.587 494.808 (1.221) BLOOMBERG
1749 1 Deutsche Bank London
Inglaterra A 42.034,00 2.000.000,00 UF AVE 474,20 6,500% 7,875% 11-09-2012 01-02-2027 959.920 479,96 6,500% 7,875% 986.570 993.950 (7.380) BLOOMBERG
1750 1 Deutsche Bank London
Inglaterra A 46.868,00 2.230.000,00 UF AVE 474,20 6,200% 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
138
AUDITED FINANCIAL STATEMENTS
NOTE 8.2.9. CREDIT DEFAULT SWAPS (CDS)
* As of December 31, 2012, the Company has no Credit Default Swaps.
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
Risk Rating
Nom
inal Long Position
Nom
inal Short Position
Currency Long
Position
Currency Short
Position
Tipo Cam
bio C
ontrato
Tasa Posicion Larga
TasaPosicionC
orta
Transaction Date
Contract Expiry
Date
Market Value O
f Target A
sset As
Of Rep. D
ate M$
Market
Exchange Rate
Market Rate
Long Position
Market Rate
Short Position
PRESENT
VALU
E LON
G
POSITIO
N M
$
Present Value Short Position M
$
Fair Value Of
Swap C
ontract A
s Of Rep. D
ate M
$
Information
Origin
HEDGING
1763 1 Banco Santander
Chile AAA 10.431,00 500.000,00 UF AVE 471,15 5,350% 4,875% 26-09-2012 11-07-2022 239.980 479,96 5,350% 4,875% 244.272 246.704 (2.432) BLOOMBERG
1764 1 Deutsche Bank London
Inglaterra A 53.779,00 2.000.000,00 UF EUR 607,34 5,350% 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
1776 1 Banco Santander
Chile AAA 78.847,00 78.847,00 UF UF 22.622.040,00 4,850% 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
1778 1 Banco Santander
Chile AAA 218.443,00 218.443,00 UF UF 22.645.310,00 4,850% 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
1777 1 Banco Santander
Chile AAA 31.862,00 1.500.000,00 UF AVE 482.000,00 5,500% 5,500% 24-10-2012 20-01-2021 719.940 479,96 5,500% 5,500% 745.268 737.278 7.990 BLOOMBERG
1788 1 Banco Santander
Chile AAA 105.258,00 5.000.000,00 UF AVE 479.300,00 5,540% 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
1790 1 Banco Santander
Chile AAA 42.127,00 2.000.000,00 UF AVE 479.700,00 3,990% 4,130% 07-11-2012 09-11-2022 959.920 479,96 3,990% 4,130% 966.233 964.167 2.066 BLOOMBERG
1791 1 Banco Santander
Chile AAA 84.255,00 4.000.000,00 UF AVE 479.700,00 3,990% 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
1801 1 Banco Santander
Chile AAA 42.485,00 2.000.000,00 UF AVE 484.500,00 5,370% 5,380% 14-11-2012 02-02-2022 959.920 479,96 5,370% 5,380% 991.222 980.534 10.688 BLOOMBERG
1802 1 Ubs Estados Unidos
A 125.923,00 6.000.000,00 UF AVE 479.250,00 4,220% 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
1812 1 Banco Santander
Chile AAA 209.516,00 10.000.000,00 UF AVE 479.300,00 4,675% 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
1815 1 Banco Santander
Chile AAA 209.516,00 10.000.000,00 UF AVE 479.300,00 4,675% 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
1814 1 Banco Santander
Chile AAA 209.516,00 10.000.000,00 UF AVE 479.300,00 4,675% 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
1813 1 Banco Santander
Chile AAA 209.516,00 10.000.000,00 UF AVE 479.300,00 4,675% 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
1824 1 Ubs Estados Unidos
A 62.990,00 3.000.000,00 UF AVE 481,00 5,090% 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
INVESTMENT
TOTAL 173.935.926 186.541.885 176.427.423 10.114.462
139
AUDITED FINANCIAL STATEMENTS
Contract Objective
Transaction Number
Transaction Item
Transaction Counterparty Transaction Characteristics Valuation Reporting
Nam
e
Nationality
Risk Rating
Nom
inal Long Position
Nom
inal Short Position
Currency Long
Position
Currency Short
Position
Tipo Cam
bio C
ontrato
Tasa Posicion Larga
TasaPosicionC
orta
Transaction Date
Contract Expiry
Date
Market Value O
f Target A
sset As
Of Rep. D
ate M$
Market
Exchange Rate
Market Rate
Long Position
Market Rate
Short Position
PRESENT
VALU
E LON
G
POSITIO
N M
$
Present Value Short Position M
$
Fair Value Of
Swap C
ontract A
s Of Rep. D
ate M
$
Information
Origin
HEDGING
1763 1 Banco Santander
Chile AAA 10.431,00 500.000,00 UF AVE 471,15 5,350% 4,875% 26-09-2012 11-07-2022 239.980 479,96 5,350% 4,875% 244.272 246.704 (2.432) BLOOMBERG
1764 1 Deutsche Bank London
Inglaterra A 53.779,00 2.000.000,00 UF EUR 607,34 5,350% 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
1776 1 Banco Santander
Chile AAA 78.847,00 78.847,00 UF UF 22.622.040,00 4,850% 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
1778 1 Banco Santander
Chile AAA 218.443,00 218.443,00 UF UF 22.645.310,00 4,850% 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
1777 1 Banco Santander
Chile AAA 31.862,00 1.500.000,00 UF AVE 482.000,00 5,500% 5,500% 24-10-2012 20-01-2021 719.940 479,96 5,500% 5,500% 745.268 737.278 7.990 BLOOMBERG
1788 1 Banco Santander
Chile AAA 105.258,00 5.000.000,00 UF AVE 479.300,00 5,540% 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
1790 1 Banco Santander
Chile AAA 42.127,00 2.000.000,00 UF AVE 479.700,00 3,990% 4,130% 07-11-2012 09-11-2022 959.920 479,96 3,990% 4,130% 966.233 964.167 2.066 BLOOMBERG
1791 1 Banco Santander
Chile AAA 84.255,00 4.000.000,00 UF AVE 479.700,00 3,990% 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
1801 1 Banco Santander
Chile AAA 42.485,00 2.000.000,00 UF AVE 484.500,00 5,370% 5,380% 14-11-2012 02-02-2022 959.920 479,96 5,370% 5,380% 991.222 980.534 10.688 BLOOMBERG
1802 1 Ubs Estados Unidos
A 125.923,00 6.000.000,00 UF AVE 479.250,00 4,220% 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
1812 1 Banco Santander
Chile AAA 209.516,00 10.000.000,00 UF AVE 479.300,00 4,675% 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
1815 1 Banco Santander
Chile AAA 209.516,00 10.000.000,00 UF AVE 479.300,00 4,675% 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
1814 1 Banco Santander
Chile AAA 209.516,00 10.000.000,00 UF AVE 479.300,00 4,675% 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
1813 1 Banco Santander
Chile AAA 209.516,00 10.000.000,00 UF AVE 479.300,00 4,675% 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
1824 1 Ubs Estados Unidos
A 62.990,00 3.000.000,00 UF AVE 481,00 5,090% 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
INVESTMENT
TOTAL 173.935.926 186.541.885 176.427.423 10.114.462
140
AUDITED FINANCIAL STATEMENTS
NOTE 9. FINANCIAL ASSETS AT AMORTIZED COST
N.9.1. INVESTMENTS AT AMORTIZED COST
Costo A
mortizado
Deterioro
Costo A
mortizado
Nto.
Valor Razonable
Tasa Efectiva Prom
edio
DOMESTIC INVESTMENTS
FIXED INCOME
Government instruments 37.847.748 37.847.748 53.095.823 4,08
Instruments issued by the financial system 599.054.518 599.054.518 571.311.203 4,55
Debt or credit instruments 521.317.116 - 521.317.116 537.064.580 4,47
Domestic debt instruments traded abroad 41.786.015 41.786.015 21.912.800 5,99
Mortgage loan notes 49.686.943 345.280 49.341.663 50.448.773 4,79
Syndicated loans 20.990.389 20.990.389 13.894.948 4,27
Others 11.532.417 11.532.417 12.979.477
FOREIGN INVESTMENTS -
FIXED INCOME -
Securities Issued by Foreign Governments and Central Banks -
Securities Issued by Foreign Banks and Financial Institutions 66.289.306 - 66.289.306 67.059.827 5,85
Securities Issued by Foreign Companies 102.753.428 203.375 102.550.053 103.957.833 5,05
Others
Total 1.451.257.880 548.655 1.450.709.225 1.431.725.264
IMPAIRMENT EVOLUTION
Impairment Evolution Chart Total
Initial balance as of 01/01 (-) 644.091
Decrease and increase in impairment provision (-/+)
(116.954)
Investment write-off (+)
Variation due to exchange rate effect (-/+)
Others 21.518
Total 548.655
141
AUDITED FINANCIAL STATEMENTS
N.9.2. TRANSACTIONS FOR COMMITMENTS ON FINANCIAL INSTRUMENTS
Type of Transaction
Transaction Number (1)
Transaction Item (2)
Transaction Counterparties Valuation Information
Nam
e (3)
Nationality (4)
Target Asset (5)
Target Asset Series (6)
Nom
inal (7)
Initial Value (8)
Agreed U
pon Value (9)
Currency (10)
Agreem
ent Interest Rate (11)
Transaction Date (12)
Contract Expiry D
ate (13)
Agreem
ent Accrued Interest (14)
Market Value of Target A
sset as of Reporting D
ate (15)
Agreem
ent Value as of Closing
Date (16)
Purchase Agreement
1 1
2 1
N 1
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
142
AUDITED FINANCIAL STATEMENTS
Type of Transaction
Transaction Number (1)
Transaction Item (2)
Transaction Counterparties Valuation Information
Nam
e (3)
Nationality (4)
Target Asset (5)
Target Asset Series (6)
Nom
inal (7)
Initial Value (8)
Agreed U
pon Value (9)
Currency (10)
Agreem
ent Interest Rate (11)
Transaction Date (12)
Contract Expiry
Date (13)
Agreem
ent Accrued
Interest (14)
Market Value of Target
Asset as of Reporting
Date (15)
Agreem
ent Value as of C
losing Date (16)
12706 BANCO BILBAO VIZCAYA AR.
CL BFFCC-I I 20000 594.028 596.162 $ 0,49 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
TOTAL 28.800.895 28.904.384 25.275.940 28.894.976
NOTE 10. LOANS
Amortized Cost Impairment Net Amortized Cost Fair Value
Policyholder Advance 1.081.493 - 1.081.493 Non-existent
Loans Granted 6.398.905 149.104 6.249.801 Non-existent
TOTAL LOANS 7.480.398 149.104 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 (149.104)
143
AUDITED FINANCIAL STATEMENTS
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 From Sia Insurances
Assets A
t Fair Value
Assets A
t Cost
Total Investments
Managed By The
Com
pany
Assets A
t Fair Value
Assets A
t Cost
Total Investments
On A
ccount Of The
Insured Party
Level 1
Level 2
Level 3
Total Assets A
t Fair Value
Cost
Impairm
ent
Total Assets A
t Cost
Total Investments
Managed By The
Com
pany
Level 1
Level 2
Level 3
Total Assets A
t Fair Value
Cost
Deterioro
Total assets at cost
DOMESTIC INVESTMENTS
-
Fixed Income -
Government instruments
37.940.030 37.940.030 37.940.030
Instruments issued by the financial system
23.100.228 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
-
NOTE 11. INVESTMENTS FROM SIA INSURANCES
144
AUDITED FINANCIAL STATEMENTS
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 From Sia Insurances
Assets A
t Fair Value
Assets A
t Cost
Total Investments
Managed By The
Com
pany
Assets A
t Fair Value
Assets A
t Cost
Total Investments O
n A
ccount Of The Insured
Party
Level 1
Level 2
Level 3
Total Assets A
t Fair Value
Cost
Impairm
ent
Total Assets A
t C
ost
Total Investments
Managed By The
Com
pany
Level 1
Level 2
Level 3
Total Assets A
t Fair Value
Cost
Deterioro
Total assets at cost
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 - - 385.996
TOTAL 25.875.558 - - 25.875.558 61.299.224 39.231 61.259.993 - 87.521.547
NOTE 11. INVESTMENTS FROM SIA INSURANCES
145
AUDITED FINANCIAL STATEMENTS
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 INVESTMENTSNOTE 13.1. INVESTMENT PORTFOLIO MOVEMENTS
Fair Value Amortized Cost
INITIAL BALANCE 120.549.294 1.231.533.446
Additions 186.914.480 662.814.451
Sales (186.466.871) (305.652.752)
Maturities (2.449.121) (213.520.039)
Accrued interest (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
Income 13.070.372 6.388.581
Shareholders’ Equity (15.901) 0
Impairment 0 205.620
Exchange Rate Difference 427.808 0
Profit or Loss per adjustable unit 122.319 20.877.801
Reclassification (1) 0 0
Others (2) - 0
FINAL BALANCE 119.322.227 1.450.709.225
146
AUDITED FINANCIAL STATEMENTS
NOTE 13.2. GUARANTEESAs of December 31, 2012, the Company has no Guarantees on Liabilities or Contingent Liabilities.
NOTE 13.3. FINANCIAL INSTRUMENTS COMPRISED OF EMBEDDED DERIVATIVESAs of December 31, 2012 the Company has no Composite Financial Instruments.
NOTE 13.4. REINVESTMENT RATE-AAR-NCG NO. 209
Reinvestment Rate Applying 100% of Tables
1.6859%
(*) 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.
NOTE 13.5. INVESTMENT PORTFOLIO REPORTINGReporting 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).
COMPAÑÍA DE SEGUROS CORP VIDA S.A.
DIC-12
FECU Amount as of 31.12.2012
Fecu Account AmountPer Type Of Inst.(Sia Insurances)(2)
TotalInvestments(1) + (2) (3)
Investments Amenableto CustodyM$
(4)
% of Invest. Amenableto Custody(4)/(3) (5)
Investment Custody Detail (Column No. 3)
Type of Investment(Titles No. 1 and 2 Of Art. 21Of Decree Law Dfl No. 251)
Am
ortized C
ost (1)
Fair Value (1)
Total (1) Securities Deposit and Custody Firm Bank Other Company
Am
ount(6)
% c/r
Total Inv.(7)
% c/r
Inv. Am
en. To C
ust.
Nam
e of SecuritiesC
ustody Firm(9)
Am
ount(10)
% c/r
Total Inv.
Nam
e ofC
ustodian Bk(12)
Am
ount (13)
% (14)
Nam
e ofC
ustodian(15)
Am
ount(16)
%(17)
Government Bonds 37.847.748 37.847.748 37.940.030 75.787.779 73.175.735 96,55% 73.175.735 96,55% 100,00%
Central Securities
334.679 0,44%IPS y Dipreca, Capredena
2.277.365 3,00%
Banking System Instruments
599.054.518 1.073.989 600.128.507 23.100.228 623.228.735 623.228.735 100,00% 623.228.735 100,00% 100,00%Central Securities
0 0,00% 0 0,00%
Corporate Bonds
584.093.520 3.225.922 587.319.442 219.735 587.539.177 512.757.445 87,27% 512.757.445 87,27% 100,00%Central Securities
12.005.328 2,04% CorpBanca 41.786.015 7,11% BBH 20.990.389 3,57%
Mortgage Loan Notes 49.341.663 - 49.341.663 - 49.341.663 0 0,00% 47.024.046 95,30%
Iron Montain Chile S.A
2.317.617 5,02%
Shares of Publicly Traded Companies
- 50.045.437 50.045.437 - 50.045.437 50.045.437 100,00% 50.045.437 100,00% 100,00%Central Securities
0,00% 0 0,00%
Shares of Closely Held Companies
- 2.644.648 2.644.648 - 2.644.648 0 0,00% 1.608.917 60,84% Emisor 1.035.731 39,16%
Investment Funds - 53.131.573 53.131.573 - 53.131.573 22.727.149 42,78% 17.098.479 32,18% 75,23%
Central Securities
0 0,00% Emisor 36.033.094 67,82%
Mutual Funds - 4.249.610 4.249.610 - 4.249.610 4.249.610 100,00% 4.249.610 100,00% 100,00%
Central Securities
0 0,00% Emisor 0,00%
Foreign Investment Funds
Foreign Shares
Bank
Syndicated Loans
Total 1.270.337.449 114.371.179 1.384.708.628 61.259.993 1.445.968.622 1.286.184.111 88,95% 1.280.555.441 88,56% 99,56% 12.005.328 1,03% 90.753.657 6,28% 62.654.196 4,13%
147
AUDITED FINANCIAL STATEMENTS
COMPAÑÍA DE SEGUROS CORP VIDA S.A.
DIC-12
FECU Amount as of 31.12.2012
Fecu Account AmountPer Type Of Inst.(Sia Insurances)(2)
TotalInvestments(1) + (2) (3)
Investments Amenableto CustodyM$
(4)
% of Invest. Amenableto Custody(4)/(3) (5)
Investment Custody Detail (Column No. 3)
Type of Investment(Titles No. 1 and 2 Of Art. 21Of Decree Law Dfl No. 251)
Am
ortized C
ost (1)
Fair Value (1)
Total (1) Securities Deposit and Custody Firm Bank Other Company
Am
ount(6)
% c/r
Total Inv.(7)
% c/r
Inv. Am
en. To C
ust.
Nam
e of SecuritiesC
ustody Firm(9)
Am
ount(10)
% c/r
Total Inv.
Nam
e ofC
ustodian Bk(12)
Am
ount (13)
% (14)
Nam
e ofC
ustodian(15)
Am
ount(16)
%(17)
Government Bonds 37.847.748 37.847.748 37.940.030 75.787.779 73.175.735 96,55% 73.175.735 96,55% 100,00%
Central Securities
334.679 0,44%IPS y Dipreca, Capredena
2.277.365 3,00%
Banking System Instruments
599.054.518 1.073.989 600.128.507 23.100.228 623.228.735 623.228.735 100,00% 623.228.735 100,00% 100,00%Central Securities
0 0,00% 0 0,00%
Corporate Bonds
584.093.520 3.225.922 587.319.442 219.735 587.539.177 512.757.445 87,27% 512.757.445 87,27% 100,00%Central Securities
12.005.328 2,04% CorpBanca 41.786.015 7,11% BBH 20.990.389 3,57%
Mortgage Loan Notes 49.341.663 - 49.341.663 - 49.341.663 0 0,00% 47.024.046 95,30%
Iron Montain Chile S.A
2.317.617 5,02%
Shares of Publicly Traded Companies
- 50.045.437 50.045.437 - 50.045.437 50.045.437 100,00% 50.045.437 100,00% 100,00%Central Securities
0,00% 0 0,00%
Shares of Closely Held Companies
- 2.644.648 2.644.648 - 2.644.648 0 0,00% 1.608.917 60,84% Emisor 1.035.731 39,16%
Investment Funds - 53.131.573 53.131.573 - 53.131.573 22.727.149 42,78% 17.098.479 32,18% 75,23%
Central Securities
0 0,00% Emisor 36.033.094 67,82%
Mutual Funds - 4.249.610 4.249.610 - 4.249.610 4.249.610 100,00% 4.249.610 100,00% 100,00%
Central Securities
0 0,00% Emisor 0,00%
Foreign Investment Funds
Foreign Shares
Bank
Syndicated Loans
Total 1.270.337.449 114.371.179 1.384.708.628 61.259.993 1.445.968.622 1.286.184.111 88,95% 1.280.555.441 88,56% 99,56% 12.005.328 1,03% 90.753.657 6,28% 62.654.196 4,13%
148
AUDITED FINANCIAL STATEMENTS
(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.
(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.
(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.
149
AUDITED FINANCIAL STATEMENTS
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)
Adjustments for revaluation 386.112 2.685.072 3.071.184
Others - - 0
Accounting Value of Investment Properties 33.595.259 - 123.927.192 157.522.451
Fair Value as of Closing Date (1) 184.395.480
Impairment (Provision) (88.186)
Final Value as of Closing Date 157.434.265
(1) The value of the lowest appraisal must be indicated.
Investment Properties Land Buildings Others Total
Final Value domestic real estate 33.595.259 123.839.006 157.434.265
Final Value foreign real estate
Final Value as of Closing Date 32.877.897 - 123.839.006 157.434.265
NOTE 14.2. LEASING ACCOUNTS RECEIVABLE
Remaining Years of Leasing Contract
Contract Value Cost Value Appraisal Value
Final Leasing Value
Nom
inal Value
Receivable Interest
Present Value
Cost Value
Final Leasing Value
*0-1 0 0 0 0 0 0 0
*1-5 995.688 166.235 829.454 0 829.454 1.593.381 1.870.973 829.454
*5 y mas 173.785.058 59.360.815 114.424.244 (75.991) 114.348.253 133.040.291 166.935.697 114.348.253
Total 174.780.746 59.527.050 115.253.698 (75.991) 115.177.707 134.633.672 168.806.670 115.177.707
150
AUDITED FINANCIAL STATEMENTS
NOTE 14.3. PROPERTIES FOR OWN USE
Items Land Buildings Others TOTAL
Initial balance as of 01.01.2012
- - 48.632 48.632
Plus: Additions, improvements, and transfers
- - -
Less: Sales, decreases, and transfers
- - -
Less: Depreciation for the period
- - (2.502) (2.502)
Adjustments for revaluation
- - 987 987
Others - - -
Accounting Value of Properties, Plant, and Equipment for Own Use
47.117
Fair Value as of Closing Date (1)
54.196
Impairment (Provision) -
Final Value as of Closing Date
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.
151
AUDITED FINANCIAL STATEMENTS
NOTE 16.1. INSURED PARTY DUE BALANCES
Item Related Company Balance Saldos con terceros TOTAL
Insured party accounts receivable (+)
- 3.192.171 3.192.171
Coinsurance accounts receivable (Líder)
- - -
Impairment (-) - (690.160) (690.160)
Total (=) - 2.502.011 2.502.011
Current Assets (Short Term) 2.502.011
Non-Current Assets (Long Term) -
Balance Maturities
Documented premiums
Insurance premiumsDis. and Surv. DL3500
Insured party premiums
Coinsurance Accounts Receivable (Non-Lider)
Otros Deudores
With specification on payment mode Unspecified Payment Mode
Payment Plan
Payment Plan
Payment Plan
Payment Plan
PAC PAT CUP Company
REVOCABLE INSURANCES
1. Maturities prior to Financ. Statement dateprevious monthsOctoberNovemberDecember2. Provisión-Payments due Voluntary3. Adjustments for non-identification
- 1.490 120.111 - 3.070.570 -
- 851 - - 419.879 -
215 - - 268.933 -
198 - - 536.103 -
226 120.111 - 1.845.655 -
- 1.264 - - 688.896 -
1.264 688.896
- -
NOTE 16.2. PREMIUM DEBTORS BY MATURITY DATE
NOTE 16. INSURED PARTY ACCOUNTS RECEIVABLE
152
AUDITED FINANCIAL STATEMENTS
Balance Maturities
Documented premiums
Insurance premiumsDis. and Surv. DL3500
Insured party premiums
Coinsurance Accounts Receivable (Non-Lider)
Otros Deudores
With specification on payment mode Unspecified Payment Mode
Payment Plan
Payment Plan
Payment Plan
Payment Plan
PAC PAT CUP Company
5. Maturities subsequent to Financ. Statement dateJanuaryFebruaryMarchsubsequent months6. Provision-Payments due-Voluntary7. Subtotal ( 5-6 )NON-REVOCABLE INSURANCES8. Maturities prior to9. Maturities subsequent toFinanc. Statement date10. Impairment11. Subtotal ( 8+9-10 )12. Total Fecu ( 4+7+11 )13. Non-enforceable credit row 414. Non-due credit revocable insurances ( 7+13 )
- -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - -
- - - - - -
- - - - - -
- - - - - - TOTAL FECU
- - - - - -
- 226 120.111 - 2.381.674 - 2.502.011
- - - - - - Domestic / Curr.
- - - - - - 2.502.011
- - - - - - Foreign / Curr.
0
Impairment Evolution Chart (1)Insurance Accounts Receivable
Coinsurance Accounts Receivable
TOTAL
Initial balance as of 01/01 (-) 2.390.112 2.390.112
Decrease and increase in impairment provision (-/+) (1.699.952) (1.699.952)
Recovery from insurance accounts receivable (+)
Write-offs for accounts receivable (+)
Variation due to exchange rate effect (-/+)
Total(=) 690.160 - 690.160
NOTE 16.3. EVOLUTION OF INSURED PARTY IMPAIRMENT
153
AUDITED FINANCIAL STATEMENTS
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 - 46.045 46.045
Assets from non-proportional reinsurances - - -
Other debts receivable from reinsurances (+)
- 1.034 1.034
Impairment (-) - 0 -
Total (=) - 47.079 47.079
Assets from non-proportional revocable reinsurances
- - 193.196
Assets from non-proportional non-revocable reinsurances
- - -
Total Assets from Non-Proportional Insurances
- - 193.196
NOTE 17.2. EVOLUTION OF REINSURANCE IMPAIRMENT
Impairment Evolution Chart
Premium
s receivable from
reinsurances
Claim
s receivable from
reinsurers
Assets from
non-proportional reinsurances
Other debts
receivable from
reinsurances
Total Im
pairment
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
154
AUDITED FINANCIAL STATEMENTS
NOTE 17.3. CLAIMS RECEIVABLE FROM REINSURERS
Reinsurers And/Or Reinsurance Brokers DomesticRisk Reinsurer 1 Reinsurer 2 Reinsurer 3 Reinsurer 4 Reinsurer 5 Foreign
RiskOverallTotal
REINSURER INFORMATION
Reinsurer Name Mapfre Re Hannover RGA Re SCOR Global Lifre SE. Suiza
Identification Code R-101 R-187 R-210 R-252 R-105
R/NR Type of Relationship NR NR NR NR NR
Country España Alemania Estados Unidos Francia Suiza
CRA 1 Code SP SP SP SP SP
CRA 2 Code AMB AMB AMB AMB AMB
Risk Rating 1 BBB+ AA- AA- A+ AA-
Risk Rating 2 A A+ A+ A A+
Rating Date 1 25-10-2012 19-06-2012 31-12-2011 04-06-2012 18-12-2012
Rating Date 2 26-06-2012 19-09-2012 31-12-2011 15-03-2012 20-12-2011
DUE BALANCES
Previous months - - -
jul - 12 - - -
aug - 12 - - -
sep - 12 - - -
oct - 12 - - -
nov - 12 - - -
dic - 12 - -
jan - 13 - - -
feb - 13 - - -
mar - 13 - 13.239 24.584 37.823 37.823
apr - 13 - - -
may - 13 - - - -
Subsequent months - 4.933 3.289 8.222 8.222
1. TOTAL DUE BALANCES - 4.933 3.289 13.239 - 24.584 46.045 46.045
2. IMPAIRMENT 0 0
3. TOTAL - 4.933 3.289 13.239 - 24.584 46.045 46.045
155
AUDITED FINANCIAL STATEMENTS
Reinsurers And/Or Reinsurance Brokers DomesticRisk Reinsurer 1 Reinsurer 2 Reinsurer 3 Reinsurer 4 Reinsurer 5 Foreign
RiskOverallTotal
REINSURER INFORMATION
Reinsurer Name Mapfre Re Hannover RGA Re SCOR Global Lifre SE. Suiza
Identification Code R-101 R-187 R-210 R-252 R-105
R/NR Type of Relationship NR NR NR NR NR
Country España Alemania Estados Unidos Francia Suiza
CRA 1 Code SP SP SP SP SP
CRA 2 Code AMB AMB AMB AMB AMB
Risk Rating 1 BBB+ AA- AA- A+ AA-
Risk Rating 2 A A+ A+ A A+
Rating Date 1 25-10-2012 19-06-2012 31-12-2011 04-06-2012 18-12-2012
Rating Date 2 26-06-2012 19-09-2012 31-12-2011 15-03-2012 20-12-2011
DUE BALANCES
Previous months - - -
jul - 12 - - -
aug - 12 - - -
sep - 12 - - -
oct - 12 - - -
nov - 12 - - -
dic - 12 - -
jan - 13 - - -
feb - 13 - - -
mar - 13 - 13.239 24.584 37.823 37.823
apr - 13 - - -
may - 13 - - - -
Subsequent months - 4.933 3.289 8.222 8.222
1. TOTAL DUE BALANCES - 4.933 3.289 13.239 - 24.584 46.045 46.045
2. IMPAIRMENT 0 0
3. TOTAL - 4.933 3.289 13.239 - 24.584 46.045 46.045
156
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)
Item Direct Accepted Total liabilities ReinsurerInterestIn reserves
Impairment ReinsuranceInterest inTechnical 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 - 41.257.606
Reserve for Life Annuities 1.717.478.111 - 1.717.478.111 41.257.606 41.257.606
Disability and Survival Insurance Reserve - - - - -
Reserve for Unexpired ClaimS 15.873.108 - 15.873.108 - -
Reserve for Private Annuities 17.137.636 - 17.137.636 143.014 143.014
Reserve for Claims 2.934.985 - 2.934.985 30.150 - 30.150
Claims Settled But Not Paid 320.027 - 320.027 - -
Claims Settled But Contested by the Insured Party - - - - -
Claims Under Settlement Process 2.277.588 - 2.277.588 30.150 30.150
Claims Occurring But Not Reported 332.227 - 332.227 - -
Premium Inadequacy Reserve 5.143 - 5.143 - -
Other Technical Reserves - - - -
Fund Value Reserve 86.516.922 - 86.516.922 - -
TOTAL 1.842.637.791 - 1.842.637.791 41.430.770 - 41.430.770
157
AUDITED FINANCIAL STATEMENTS
Main Assumptions Applied, Main Characteristics, and Calibration Frequency Reserve calculation was carried out based on the instructions contained in General Regulations NCG No. 306 and No. 318 of the Superintendency of Securities and Insurance, issued on April 14, 2011 and September 1, 2011, respectively. All the assumptions used in calculating reserves are reviewed and updated on a quarterly basis, as applicable. For the determination of current Financial Statements, the Company exercised the following options contained in the aforementioned regulations: 1. Life Annuities Pursuant to the provisions contained in NCG No. 318, No. 2, the Company applied the instructions in paragraph 2.1 only to policies affective as of January 1, 2012. For life annuity policies effective prior to such date, the reserve was calculated pursuant to the instructions provided in Official Circular No. 1512 and other instructions provided by the Superintendency of Securities and Insurance, effective on these financial statement date. 2. Reserve for Ongoing Risk 2.1. Exception for a hedging period shorter than policy validity The Company adhered to the exception contained in paragraph two, letter b), No. 1, Title III of NCG No. 306, introduced through NCG No. 320, with respect to considering, for the purpose of Reserve for Ongoing Risk calculation, the premium hedging and recognition period when this is shorter than policy validity,
maintaining at least one reserve equivalent to one month of premium or, if longer, the premium equivalent for the grace period stated in the policy. This is the case for the following insurances: - Collective life and health insurance policies and collective title insurance policies with a validity period equal to or exceeding 1 year where premium is monthly calculated based on an agreed upon rate over the insured capital amounts for policyholders with coverage valid in the corresponding month. - Coverage cost of insurances with SIA. - Policies or Additional Coverages with annual validity with or without an automatic renewal clause with a payment frequency less than its validity. These products are marketed through Individual, Collective, Bank Insurance, and Title Insurance business lines. 2.2. Reserve for terms exceeding 4 yearsPursuant to the final paragraph of No. 1, Title III of SVS NCG No. 306, the Company informed the Superintendency of its decision to apply the calculation of the Reserve for Ongoing Risk based on terms exceeding 4 years for coverages for which there is no probability table registered at the registry of the Superintendency of Securities and Insurance for the calculation of Reserves for Unexpired Claims. 2.3. Application In accordance with the transitory provisions contained in Title VI, NCG No. 306, the new instructions concerning the setup of the Reserve for Ongoing Risk, set out in No. 1 of Title II of the aforementioned regulation, were applied only to policies issued or renewed as of January 1, 2012.
158
AUDITED FINANCIAL STATEMENTS
3. Reserve for Unexpired Claims Pursuant to paragraph 2.1, Title III of General Regulation No. 306, the Superintendency of Securities and Insurance, through Official Circular No. 10,210 of April 20, 2012, authorized the Company to apply a Reserve for Unexpired Claims in the following cases: - Insurances with a single premium associated with credits (consumer credit title insurances), regardless of the coverage term (death risk). - Individually subscribed insurances with a single or leveled (death risk) premium, marketed under an individual or collective policy, without a renewal clause and regardless of policy validity. - Products with a leveled (death risk) premium, with premium refund, regardless of policy validity. 4. Reserve for Claims Occurring But Not Reported (OYNR) For the estimation of the OYNR Reserve, the Company used the standard method generally applied for all modeled risks. The standard method corresponds to the method based on the development of incurred claims, also called “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.
The methodology and criteria applied by the Company for weighing and segregating each FECU branch were presented to the Superintendency of Securities and Insurance and is based on the distribution of incurred claims on Financial Statement date. 5. Reserve for Premium InadequacyThe Premium Adequacy Test was conducted in accordance with the standard method stated in Exhibit 1 to NCG No. 306, which is based on the “Combined Ratio” concept, which relates the insurance company technical disbursements with the recognized premium to address the former, using the 12-month historical information contained in the Financial Statements immediately prior to the date of determination thereof. 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.
159
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 Reserve for Ongoing Risk
Reserve for Unexpired Claims
Fund Value Reserve
OYNR TSP TAP Total
101 Full Individual Life 0 0 0 0 0 0 0
102 Term Individual Life Insurance 0 0 0 -891 0 0 -891
103 Other Insurances with Individual SIA 0 0 0 111.224 0 0 111.224
104 Mixed or Total Individual 0 0 0 0 0 0 0
105 Private Annuities 0 0 0 0 0 0 0
106 Total Simple or Deferred Capital 0 0 0 0 0 0 0
107 Family Protection 0 0 0 0 0 0 0
108 Individual Disability or Incapacity Insurance 45.948 -9.653 0 -252 0 0 36.043
109 Individual Health Insurance 0 0 0 250.257 0 0 250.257
110 Individual Personal Accidents 0 0 0 -13.424 0 0 -13.424
111 Assistance 0 0 0 0 0 0 0
112 Individual Title Insurance 0 0 0 0 0 0 0
113 Individual Mandatory Personal Accident Insurance 0 0 0 0 0 0 0
114 VPFS Insurances 0 0 0 5.421 0 0 5.421
150 Other individual insurances 0 0 0 0 0 0 0
201 Full Collective Life Insurance 0 0 0 0 0 0 0
202 Term Collective Life Insurances 86.233 -36.874 0 -62.687 0 0 -13.328
203 Mixed or Collective Disability or Incapacity Insurance 0 0 0 0 0 0 0
204 Collective Disability or Incapacity Insurance 0 0 0 0 0 0 0
207 Family Protection 0 0 0 0 0 0 0
209 Collective Health Insurance 0 0 0 -7.333 5.417 0 -1.916
210 Collective Personal Accident Insurance 1.800.533 -349.147 0 -9.410 0 0 1.441.976
211 Collective Assistance Insurance 0 0 0 0 0 0 0
212 Collective Title Insurance 391.327 -147.720 0 -98.949 0 0 144.658
214 Insurances with Collective VPFS 0 0 0 0 0 0 0
Total 2.324.041 -543.395 0 173.956 5.417 0 1.960.019
160
AUDITED FINANCIAL STATEMENTS
NOTE 20. INTANGIBLE ASSETS
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
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.
161
AUDITED FINANCIAL STATEMENTS
AssetInitialBalanceM
$
Additions
M$
Decreases
M$
Repayment
M$
FinalBalance
Software 232.039 830.541 191.144 871.436
Licenses 117.370 58.840 - 118.380 57.830
Remodeling 2.258.772 163.297 1.796.607 625.462
Trademarks 6.980 70 7.050
AFR 101.485 60 2.596 98.949
TOTAL 2.716.645 1.052.809 - 2.108.728 1.660.727
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.
162
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 -
Others 86
TOTAL 711.355
NOTE 21.2.1. EFFECT OF DEFERRED TAXES ON SHAREHOLDERS’ EQUITY
Item Assets Liabilities Net
Financial Investments with Effect on Shareholders’ Equity
98.088 131.567 (33.479)
Hedges
Others
Total Debit(Credit) to Shareholders’ Equity 98.088 131.567 (33.479)
General InformationThe Company has not set up a provision for first-category income tax since there is a negative cumulative Net Taxable Income as of December 31, 2012, amounting to M$ (30.969.558).
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:
F.U.T. Amount M$
Negative balance (29.844.254)
Credits for Shareholders
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 first-category tax losses.
163
AUDITED FINANCIAL STATEMENTS
NOTE 21.2.2. EFFECT OF DEFERRED TAXES ON INCOME
Items Assets Liabilities Net
Impairment of Uncollectible Accounts 191.909 191.909
Impairment of Debtors from Reinsurance 0
Impairment of Fixed-Income Instruments 60.546 60.546
Impairment of Mortgage Loan Notes 69.056 69.056
Impairment of Real Estate 17.637 17.637
Impairment of Intangible Assets 0
Impairment of Leasing Contracts 15.198 15.198
Impairment of Loans Granted 29.821 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)
Valuation of Financial Risk Hedging Transactions 2.713.524 (2.713.524)
Valuation or resale and repurchase agreements 0
Remuneration Prov. 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 6.193.912 6.193.912
Leasing Contracts 4.393.706 4.393.706
Others 17.890 469.678 (451.788)
TOTAL 11.468.668 6.256.729 5.211.939
164
AUDITED FINANCIAL STATEMENTS
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
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 235.115 235.115
Current Assets (Short Term)
235.115
Non-Current Assets (Long Term)
-
165
AUDITED FINANCIAL STATEMENTS
NOTE 22.3. BALANCES WITH RELATED COMPANIESNOTE 22.3.1 BALANCES
Related Entity Tax Number Related Company Debt
Debt with Related Entities
CorpBanca S.A. 97.023.000-9 727.714
Soc. Inv. Inmobiliarias Seguras S.A. 76.039.786-5 6.128.201
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 24.710
CorpBanca Corredores de Seguros S.A. 78.809.780-8 1.489.688
SMU Corp. S.A. 76.086.272-K
TOTAL 6.152.911 2.217.402
NOTE 22.3.2. COMPENSATIONS TO KEY SENIOR STAFF AND MANAGERS
Items Payable Compensations (M$)
Effect on Income (M$)
Salaries - 2.170.489
Other Benefits - -
TOTAL - 2.170.489
166
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
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
208.392 208.392
CAI Gestión 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
Cía. De Seguros CorpSeguros S.A.
76.073.138-2 Same Parent Company
Services Agreement
982.601 982.601
Empresas La Polar S.A. 96.874.030-K Same Parent Company
Leases 433.917 433.917
167
AUDITED FINANCIAL STATEMENTS
SubTotal 330.035.365 6.529.875
Liabilities
Corp. Capital Adm. General de Fondos S.A.
96.513.630-4 Same Holding Company
Redemptions 248.666.407 119.407
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 Gestión Inmobiliaria S.A. 76.058..352-9 Indirect Holding Company
Real Estate Consulting Fees
694.919 (694.919)
CAI Gestión Inmobiliaria S.A. 76.058..352-9 Indirect Holding Company
Refunds 257.225
Cía. De Seguros CorpSeguros S.A.
76.073.138-2 Same Parent Company
Investment Purchases
12.112.166 298.946
Soc. de Inv. Inmobiliarias Seguras S.A.
76.039.786-5 Coligada Refund 1.788.447
SubTotal 320.908.197 (10.628.376)
Others
Subtotal 650.943.562 (4.098.501)
TOTAL 650.943.562 (4.098.501)
168
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 64.261
Acoger Santiago 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
1.039.185
Assets Under Resale or Repurchase Agreements
25.275.939
Other Assets 200.987
Total Other Assets 38.296.968
169
AUDITED FINANCIAL STATEMENTS
NOTE 23. FINANCIAL LIABILITIES
NOTE 23.1. FINANCIAL LIABILITIES AT FAIR VALUE WITH CHANGES TO INCOME
Item
Liabilities At Fair ValueM$
Liabilities Carrying Value
Effect On Income
Effect On Oci (1)
Securities representing Debt
- - - -
Investment Derivatives - - -
Underlying Derivatives - - - -
Others - - - -
Total 0 - 0 -
NOTE 23.2. FINANCIAL LIABILITIES AT AMORTIZED COST
NOTE 23.2.1 DEBT WITH FINANCIAL ENTITIES
Name of Bank or Financial Institution
Granting Date Unsettled Balance Short Term Long Term TOTAL Market Value
Consorcio 12-10-2012 7.080.632.500 UF 3,31000% 04-10-2013 7.133.692 7.133.692 8,48000% 7.213.270
TOTAL 7.133.692 7.133.692 7.213.270
170
AUDITED FINANCIAL STATEMENTS
NOTE 23.2.2. OTHER FINANCIAL LIABILITIES AT AMORTIZED COST
Item Liabilities at amortized costM$
Liabilities carrying value
Effect on income
Effect on oci (1)
Resale and Repurchase Agreements
28.800.895
TOTAL 28.800.895 0 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
* 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.
171
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 INSURANCESNOTE 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
NOTE 25.2.2. RESERVE FOR PENSION FUND INSURANCESReserve For Life Annuities (5.21.31.21) M$
Reserve previous Dec. 1.543.689.343
Reserves for life annuities contracted during the period 232.146.358
Pensions paid (111.698.195)
Interest for the period 61.270.953
Release for death (10.781.039)
Subtotal Reserve for Life Annuities for the Period 1.714.627.420
Uncollected pensions 187.801
Outdated checks 18.315
Uncollected checks 37.914
Unpaid due guaranteed annuities 123.565
Others 2.483.096
Total Reserve For Life Annuities 1.717.478.111
172
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 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 621.245
Reserve released due to death (2.134.536)
Reserve released due to other expiries (7.999.113)
Reserve for Unexpired Claims for the period
Total Reserve for Unexpired Claims 15.873.108
173
AUDITED FINANCIAL STATEMENTS
NOTE 25.2.4. FUND VALUE RESERVE
Fund Value Reserve Risk Hedging Fund Value Reserve
Reserve for SIA Insurance Gap
Reserve for O
ngoing Risk
Reserve for U
nexpired C
laims
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 16.465
NOTE 25.2.4.1 RESERVE FOR GAPS ASSOCIATED WITH INSURANCES WITH A SINGLE INVESTMENT ACCOUNT (SIA)
Fund name Fund value type StrategicDistribution Investment Gap reserve
Type of Investment Amount
Conservative VPFS 100% AIRMarket rate: Recon. Bonuses 25.527.861 -
Mortg. Bonds 2.584.115
Corp. Bonds 8.639.544
Bank 80.077
Term Deposits 4.519.984
Total 41.351.580
174
AUDITED FINANCIAL STATEMENTS
Moderate VPFS70% AIR15% IGPA 15% S&P 500
Recon. Bonuses 304.491 -
Mortg. Bonds 30.823
Corp. Bonds 103.051
Bank 955
For. Shares 214.509
Term Deposits 53.913
Total 707.742
Moderate Domestic VPFS 60% AIR
40% IGPA Recon. Bonuses 876.161 -
Mortg. Bonds 88.691
Corp. Bonds 296.524
Bank 2.748
For. Shares 957.787
Term Deposits 155.134
Total 2.377.047
Balanced VPFS
50% AIR 15% IGPA 15% MSCI 20% S&P 500
Recon. Bonuses 388.860 -
Mortg. Bonds 39.363
Corp. Bonds 131.604
Bank 3.141
For. Shares 634.715
Term Deposits 68.852
Total 1.266.537
Stock VPFS25% IGPA 25% MSCI 50% S&P 500
Bank 2.485 -
For. Shares 986.561
Total 989.046
Domestic Stock VPFS 100% IGPA Bank 0 -
175
AUDITED FINANCIAL STATEMENTS
Fund Value Reserve
Risk Hedging Fund Value Reserve
Reserve for SIA Insurance Gap
Reserva De Descalce
Reserve for O
ngoing Risk
Reserve for U
nexpired C
laims
Total 5.641.754
International VPFS 50% MSCI 50% S&P 500
Bank 594 -
For. Shares 117.183
Total 117.776
Diversified International
VPFS 35% S&P 500 15% Japan 10% Ex Japan 20% Europe 10% Latam 10% EM
Bank 80
-
For. Shares 377.995
Total 378.076
Development VPFS 30% Ex Japan 30% Latam 40% EM
Bank1.740 -
For. Shares 2.398.355
Total 2.400.094
Asian VPFS 60% Japan 40% Ex Japan
Bank 0 -
For. Shares 67.336
Total 67.336
European VPFS 100% Europe Bank 0 -
For. Shares 150.215
Total 150.215
Latin American VPFS 100% Latam Bank 9.680 -
For. Shares 3.963.322
Total 3.973.003
Technological VPFS 100% Technolog Bank 179.000 -
For. Shares 378.394
Total 557.394
176
AUDITED FINANCIAL STATEMENTS
Corporate VPFS 50% S&P 500 50% Invest Corp
Bank 5.500 -
For. Shares 61.927
Total 67.427
Domestic Stock Exchange
VPFS 100% IPSA Bank 0 -
For. Shares 4.746.793
Total 4.746.793
Conservative OTH 100% TIP Market rate:
Recon. Bonuses 10.386.369 16.465
Mortg. Bonds 917.033
Corp. Bonds 3.506.918
CFM Nacional 0
Term Deposits 2.150.727
Total 16.961.047
Moderate OTH 70% AIR 15% IGPA 15% S&P 500
Recon. Bonuses27.753 -
Mortg. Bonds 2.404
Corp. Bonds 9.192
Bank 1.007
For. Shares 17.232
Domestic MFI 0
Term Deposits 5.637
Total 63.224
Moderate Domestic
OTH 60% TIP 40% IGPA
Recon. Bonuses 78.846 -
Mortg. Bonds 6.563
Corp. Bonds 25.099
For. Shares 75.539
Domestic MFI 0
Term Deposits 15.393
Total 201.440
Balanced OTR 50% TIP 15% IGPA 15% MSCI 20% S&P 500
Bonos de Recon. 14.004 -
177
AUDITED FINANCIAL STATEMENTS
Fund Value Reserve
Risk Hedging Fund Value Reserve
Reserve for SIA Insurance Gap
Reserva De Descalce
Reserve for O
ngoing Risk
Reserve for U
nexpired C
laims
Corp. Bonds 4.603
Bank 1.899
For. Shares 19.663
Domestic MFI 0
Term Deposits 2.823
Total 44.196
Stock OTH25% IGPA 25% MSCI 50% S&P 500
Recon. Bonuses 1.597 -
Bank 10.168
For. Shares 101.087
Total 112.853
Domestic Stock OTH 100% IGPA Bank 0 -
Recon. Bonuses 113.400
For. Shares 1.898.827
Total 2.012.227
International OTH 50% MSCI 50% S&P 500 Bank 2.484 -
Recon. Bonuses 17.137
Total 19.621
Diversified International OTH
35% S&P 500 15% Japan 10% Ex Japan 20% Europe 10% Latam 10% EM
Recon. Bonuses 2.999 -
Bank 4.784
For. Shares 96.425
Total 104.208
Development OTH30% Ex Japan 30% Latam 40% EM
Recon. Bonuses 66.178 -
178
AUDITED FINANCIAL STATEMENTS
Bank 554.380
Total 620.558
Asian OTH 60% Japan 40% Ex Japan
Recon. Bonuses 2.280 -
Bank 2.636
For. Shares 39.381
Total 44.297
European OTH 100% Europe Bank 0 -
For. Shares 97.131
Total 97.131
Latin American OTH 100% Latam Bank 0 -
Recon. Bonuses 103.104
For. Shares 1.261.032
Total 1.364.136
Technological OTH 100% Technolog Bank 0 -
For. Shares 218.931
Total 218.931
Corporate OTH 50% S&P 500 50% Invest Corp
Bank 1.021 -
For. Shares 19.668
Total 20.689
Domestic Stock Exchange
OTH 100% IPSA Recon. Bonuses 46.123 -
Bank 76.000
For. Shares 762.277
Total 884.400
Sub Total 87.560.778 16.465
(-) Impairment (39.231)
Total SIA Investments 87.521.547 16.465
179
AUDITED FINANCIAL STATEMENTS
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
Increases Decreases Exchange rate difference adjustment
Others Final balance
Claims Settled But Not Paid
307.177 12.851 320.028
Claims Settled But Contested by the Insured Party
-
Claims Under Settlement Process
1.870.731 360.980 0 45.876 2.277.588
Claims Occurring But Not Reported
391.606 - (68.983) 9.603 332.227
Total Reserve for Claims 2.569.514 360.980 (56.132) 55.480 - 2.929.842
NOTE 25.2.7. RESERVE FOR PREMIUM INADEQUACY
Premium Inadequacy Test
Date Result m$
31-12-2012 5.143
180
AUDITED FINANCIAL STATEMENTS
Main Characteristics of the Calculation Model and Hypotheses Used
The methodology used corresponds to that described in Exhibit 1 to NCG No. 306, with the following considerations: 1. For each FECU branch, the premiums, claims, and reserves corresponding to the coverages with a Reserve for Ongoing Risk were identified. 2. Intermediation costs were assigned based on the proportion represented by the Branch Direct Premium with respect to the Earned Premium for insurances with a Reserve for Ongoing Risk. 3. In those cases where the application of NCG No. 306 implied a change to the reserve methodology, the opening reserve was re-estimated for the purpose of recording its variation over the period under analysis. 4. Administration Expenses were assigned by FECU branch in accordance with the Company´s functional expense allocation criteria. 5. As stated in Regulation No. 1,937 of the Superintendency of Securities and Insurance, the Company uses FECU account information from the quarter prior to financial statement closing date.
NOTE 25.2.8. OTHER RESERVESLiability Adequacy Test
Date Result M$
31-12-2011 -
31-12-2012 -
Characteristics and Hypotheses for the Calculation Model UsedIn accordance with the above, when defining and applying this Test, the Company took into account the following requirements:
a) To consider generally accepted principles on an international level and the IFRS concepts associated with this Test. b) To use the Company’s estimates with respect to mortality and interest rate, i.e., to analyze the adequacy of the reserve in accordance with the Company’s own experience and portfolio characteristics. c) To consider the options or benefits for policyholders and the agreed upon guarantees provided to the former by the Company. d) To recognize the risk assigned to reinsurers for accounting purposes. 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 minimum requirement, current estimates of all contractual cash flows and related cash flows, such as settlement costs and cash flows from options and underlying guarantees, must be considered. 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.
181
AUDITED FINANCIAL STATEMENTS
Life AnnuitiesAdditionally, 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. 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.
Liabilities
Base Technical Reserve
Financial technical reserve
Matching reserve
adjustment
Non-Pension Fund
Initial Amount 13.662.898 13.558.944 103.954
Final Amount 13.496.027 13.386.577 109.450
Variation (166.871) (172.367) 5.496
Pension Fund
Initial Amount 1.475.177.982 1.458.365.034 16.812.948
Final Amount 1.461.817.168 1.443.706.549 18.110.619
Variation (13.360.814) (14.658.485) 1.297.671
Total Initial Amount 1.488.840.880 1.471.923.978 16.916.902
Final Amount 1.475.313.195 1.457.093.126 18.220.069
Variation (13.527.685) (14.830.852) 1.303.167
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.
NOTE 25.3. HEDGINGNOTE 25.3.1. HEDGING RESERVE ADJUSTMENT
182
AUDITED FINANCIAL STATEMENTS
NOTE 25.3.2. HEDGING INDICESTier K Nominal Asset Flow
In UFNominal Insurance Liability Flow In UF BK(1)
Financial Liability FlowCK
Asset Hedging IndexCAK
Liability Hedging IndexCPK
TIER 1TIER 2TIER 3TIER 4TIER 5TIER 6TIER 7TIER 8TIER 9TIER 10Total - - - - -
(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 CPK2TIER K Nominal Asset Flow In UF Nominal Insurance Liability
Flow In UFFinancial Liability Flow
Asset Hedging IndexCAK
Liability Hedging Index CPK
TIER 1 229.018.935 219.621.829 7.133.693 0,959 1.000 TIER 2 217.537.037 214.697.001 - 0,987 1.000 TIER 3 226.943.858 207.054.846 - 0,912 1.000 TIER 4 261.911.222 197.794.402 - 0,755 1.000 TIER 5 228.948.300 186.954.771 - 0,817 1.000 TIER 6 304.013.082 257.322.733 - 0,846 1.000 TIER 7 273.402.738 225.390.941 - 0,824 1.000 TIER 8 457.162.257 298.275.038 - 0,652 1.000 TIER 9 160.420.531 258.781.789 - 1.000 0,620 TIER 10 336.817 175.863.474 - 1.000 0,002 Total 2.359.694.777 2.241.756.824 7.133.693
(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
183
AUDITED FINANCIAL STATEMENTS
CPK3
Tier K Nominal Asset Flow In UF AK
Nominal Insurance Liability Flow In UF BK(3)
Financial Liability Flow CK
Asset Hedging Index CAK
Liability Hedging Index CPK
TIER 1 229.018.935 219.831.575 7.133.693 0,960 1.000
TIER 2 217.537.037 215.522.291 - 0,991 1.000
TIER 3 226.943.858 208.761.173 - 0,920 1.000
TIER 4 261.911.222 200.613.600 - 0,766 1.000
TIER 5 228.948.300 191.093.623 - 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
TIER 10 336.817 227.933.154 - 1.000 0,001
Total 2.359.694.777 2.390.781.759 7.133.693
(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 UFBK(4)
Financial Liability Flow CK
Asset Hedging Index CAK
Liability Hedging Index CPK
TIER 1 229.018.935 219.870.445 7.133.693 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
TIER 10 336.817 227.494.737 - 1.000 0,001
Total 2.359.694.777 2.396.678.369 7.133.693
(4) RV-2009, B-2006, and MI-2006, for the entire policy stock
184
AUDITED FINANCIAL STATEMENTS
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
RTF 85-85-85
RTF 2004-85-85
RTFs 2004-85-85
RF-2004 U
nrecognizedD
ifference
RTF 2004-2006-2006
RTFs 2004-2006-2006
B-2004 andM
-2006 U
nrecognizedD
ifference
RTF 2009-2006-2006
RV-2009U
nrecognized D
ifference
( 1 ) ( 2 ) ( 3 ) ( 4 ) ( 5 ) ( 6 ) ( 7 ) ( 8 ) ( 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
793.808.924
Total 863.441.051 924.927.360 878.814.777 46.112.583 1.721.965.493 3.229.209
185
AUDITED FINANCIAL STATEMENTS
(1) RTF 85-85-85 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.
(2) RTF 2004-85-85 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.
(3) RTFs 2004-85-85 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.
(4) Unrecognized DifferenceRV-2004 Unrecognized Difference Difference between columns (2) and (3).
(5) RTF 2004-2006-2006 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.
(6) RTFs 2004-2006-2006 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.
186
AUDITED FINANCIAL STATEMENTS
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 479.615
(3) Installment number Year 5, quarter 3
(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%
* Equivalent Cost Rate based on the recalculation of the Recognition Installment reported as of September 2010.
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.
(7) Unrecognized DifferenceB-2006 y MI-2006
Difference between columns (5) and (6).
(8) RTF 2009-2006-2006 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.
(9) Unrecognized DifferenceRV-2009 - Difference between columns (8) and (5).
(10) For insurance policies effective as of February 1, 2008, values should only be reported in column RTF 2009-2006-2006.
187
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.
188
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 TRANSACTIONSPREMIUMS PAYABLE TO REINSURERSBalance Maturities Domestic Risks Foreign Risks Overall Total
1. Non-Retained Balance (363.424) (363.424)
Previous Months
sep-12
oct-12
nov-12 0 0
dic-12
jan-13 (12.562) (12.562)
feb-13 (42.141) (42.141)
mar-13 (26.086) (26.086)
Subsequent Months (282.635) (282.635)
2 . Retained Funds - -
Previous Months
jun-12
jul-12
aug-12
sep-12
oct-12
nov-12
dic-12
Subsequent Months
Claims
TOTAL (363.424) (363.424)
NOTE 26.3. DEBTS FROM COINSURANCE TRANSACTIONS* As of December 31, 2012, the Company has no debts from Coinsurance Transactions.
189
AUDITED FINANCIAL STATEMENTS
NOTE 27. PROVISIONS
ITEM Balance as of 01.01.2012
Additional provision during the period
Increases in existing provisions
Amounts used during the period
Amounts not used during the period
Others TOTAL
Audit Provision 43.488 57.665 (45.192) 55.961
TOTAL 43.488 - 57.665 (45.192) - - 55.961
Non-Current
Current TOTAL
Audit Provision 55.961 55.961
TOTAL 55.961 55.961
AUDIT PROVISIONThis is a provision arising from future disbursements for expenses incurred in contracting Financial Statement Auditing Services. These disbursements are made on a quarterly basis.
190
AUDITED FINANCIAL STATEMENTS
NOTE 28. OTHER LIABILITIES
NOTE 28.1.TAXES PAYABLE NOTE 28.1.1. ACCOUNTS PAYABLE FOR TAXESAs 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
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 ENTITIESAs of December 31, 2012, the detail of debts with brokers is as follows:
Debts with Brokers Saldos con empresas relacionadas
Saldos con terceros
TOTAL
Pension fund consultants 4.579 4.579
Agents 30.647 30.647
Others -
Other debts from insurances -
Total 35.226 35.226
Current Liabilities (Short Term) 35.226
Non-Current Liabilities (Long Term) -
191
AUDITED FINANCIAL STATEMENTS
NOTE 28.4. DEBTS WITH PERSONNELAs 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 LIABILITIESAs of December 31, 2012, the detail of other non-financial liabilities is as follows:
Item Total
Pension Fund Management Companies -
Health 883.593
Workers’ Benefit Associations 479.456
Accounts payable 4.476.816
Invoices payable 310.739
Others 2.012.483
Total Non-Financial Liabilities 8.163.087
192
AUDITED FINANCIAL STATEMENTS
NOTE 29.1. PAID-IN CAPITALAt 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 PolicyIn 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.
NOTE 29. SHAREHOLDERS’ EQUITY
193
AUDITED FINANCIAL STATEMENTS
Nombre RUT Tipo persona % Propiedad
Mass Mutual (Chile) Limitada. 76.080.631-5 Jurídica Nacional 27,88%
Corp Group Vida Limitada. 76.651.100-7 Jurídica Nacional 72,12%
- 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:
194
AUDITED FINANCIAL STATEMENTS
NOTE 29.2. DIVIDEND DISTRIBUTIONOver the period January 1 to December 31, 2012, the Company has distributed no Dividends.
Balancesas of 01.01.12H
istoricalM
$
Distribution
of PreviousA
cc. PeriodIncom
e M$
Capital
Increase M$
Dividend
Distribution M
$
Revaluation M$
Adjustm
entsM
$
Balances as of30.09.2012M
$
Paid-up capital 127.378.510 - 23.925.000 - - 151.303.510
Markup in sale of own shares 400.180 - - - - 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 0
Cumulative losses 107.650 (21.254.083) - - (738.638) (21.885.071)
Profit for the period (21.254.083) 21.254.083 - - 2.238.068 2.238.068
Shareholders’ Equity 118.368.452 0 0 0 7.966.382 150.259.834
Shareholders’ Equity Movement as of December 31, 2012
195
AUDITED FINANCIAL STATEMENTS
NOTE 30. CURRENT REINSURERS AND REINSURANCE BROKERS
As of December 31, 2012, the detail of Reinsurers and Reinsurance Brokers is as follows:Name Identification
CodeType Of Relationship
Country Assigned premium
Non-ProportionalReinsurance Cost
TotalReinsurance
Risk Rating
Rating Agency Code
Risk Rating Rating Date
C1 c2 c1 c2 c1 c2
1.- Reinsurers
1.1 Subtotal Domestic - - -
Mapfre re R-101 NR España 673 448.447 449.120 SP AMB A- A 17-01-2012 14-12-2011
Hannover R-187 NR Alemania 288.631 288.631 SP AMB AA- A 17-06-2011 15-11-2011
Rga re R-210 NR EEUU (30.278) 13.960 (16.318) SP AMB AA- A+ 31-12-2011 31-12-2011
Scor global lifre se
R-252 NR Francia 117.060 117.060
SP AMB A A 28-10-2011
26-04-2011
Suiza R-105 NR Suiza 73.005 73.005
SP AMB AA- A+ 28-10-2011
20-12-2011
1.2 Subtotal Foreign 160.460 751.038 911.498
2.- Reinsurance Brokers
2.1 Subtotal Domestic - - -
2.2 Subtotal Foreign - - -
Total Domestic Reinsurances - - -
Total Foreign Reinsurances 160.460 751.038 911.498
Total Reinsurances 160.460 751.038 911.498
196
AUDITED FINANCIAL STATEMENTS
NOTE 31.TECHNICAL RESERVE VARIATION
As of December 31, 2012, the detail of Technical Reserve variation is as follows:
Item Direct Assigned Accepted Total
Reserve for Ongoing Risk (1.851.124) - - (1.851.124)
Reserve for Unexpired Claims (3.712.558) - - (3.712.558)
Fund Value Reserve (15.502.226) - - (15.502.226)
Catastrophic Reserve against Earthquakes
- - - -
Reserve for Premium Inadequacy (5.143) - - (5.143)
Other Technical Reserves - - - -
Total Technical Reserve Variation (21.071.051) - - (21.071.051)
197
AUDITED FINANCIAL STATEMENTS
NOTE 32. CLAIM COST
As of December 31, 2012, the detail of Claim Cost is as follows:
Item Amount
Direct Claims (19.020.025)
Direct claims paid (+) (18.864.521)
Direct payable claims (+) (2.609.808)
Direct payable claims previous period (-) 2.454.304
Assigned Claims 369.803
Assigned claims paid (+) 474.420
Assigned payable claims (+) 30.152
Assigned payable claims previous period (-) (134.769)
Accepted Claims
Accepted claims paid (+)
Accepted payable claims (+)
Accepted payable claims previous period (-)
Total Claim Cost (18.650.222)
198
AUDITED FINANCIAL STATEMENTS
NOTE 33. ADMINISTRATION COSTS
Item Total
Remunerations 8.339.610
Expenses associated with the delivery channel
-
Others 19.619.202
Total Administration Costs 27.958.812
As of December 31, 2012, the detail of administration costs is as follows:
199
AUDITED FINANCIAL STATEMENTS
NOTE 34. INSURANCE IMPAIRMENT
As of December, 2012, the detail of insurance Impairment is as follows:
Items M$
Premiums (690.160)
Claims
Assets from Reinsurance
Others
Total (690.160)
200
AUDITED FINANCIAL STATEMENTS
NOTE 35. INVESTMENT INCOME
Investment Income Investments at Amortized Cost Investments at Fair Value Total
Total Net Realized Investment Income 26.298.117 13.020.086 39.318.203
Total realized real estate investments 20.409.785 - 20.409.785
Income from sale of properties for own use -
Income from sale of goods under Leasing 223.658 223.659
Income from sale of investment properties -
Others 20.186.127 - 20.186.127
Total realized financial investments 5.888.333 13.020.086 18.908.418
Income from financial instrument sales 5.888.333 13.020.086 18.908.418
Others -
Total Net Unrealized Investment income 7.832 -11.565.568 (11.557.736)
Total unrealized real estate investments 7.832 - 7.832
Variations in market value compared to adjusted cost value
7.832 7.832
Others -
Total unrealized financial investments - (11.565.568) (11.565.568)
Portfolio mark to market - (11.741.422) (11.741.422)
Others 175.853 175.853
Total Net Accrued Investment Income 68.054.128 7.331.091 75.385.219
Total accrued real estate investments 7.255.274 - 7.255.274
Interest from assets under Leasing 7.255.274 7.255.274
Adjustments -
Others - -
Total accrued financial investments 62.103.135 7.331.091 69.434.226
Interest 62.190.405 62.190.405
Adjustments -
Dividends 7.199.753 7.199.753
201
AUDITED FINANCIAL STATEMENTS
Investment Income Investments at Amortized Cost Investments at Fair Value Total
Total Net Realized Investment Income 26.298.117 13.020.086 39.318.203
Total realized real estate investments 20.409.785 - 20.409.785
Income from sale of properties for own use -
Income from sale of goods under Leasing 223.658 223.659
Income from sale of investment properties -
Others 20.186.127 - 20.186.127
Total realized financial investments 5.888.333 13.020.086 18.908.418
Income from financial instrument sales 5.888.333 13.020.086 18.908.418
Others -
Total Net Unrealized Investment income 7.832 -11.565.568 (11.557.736)
Total unrealized real estate investments 7.832 - 7.832
Variations in market value compared to adjusted cost value
7.832 7.832
Others -
Total unrealized financial investments - (11.565.568) (11.565.568)
Portfolio mark to market - (11.741.422) (11.741.422)
Others 175.853 175.853
Total Net Accrued Investment Income 68.054.128 7.331.091 75.385.219
Total accrued real estate investments 7.255.274 - 7.255.274
Interest from assets under Leasing 7.255.274 7.255.274
Adjustments -
Others - -
Total accrued financial investments 62.103.135 7.331.091 69.434.226
Interest 62.190.405 62.190.405
Adjustments -
Dividends 7.199.753 7.199.753
202
AUDITED FINANCIAL STATEMENTS
Others (87.270) 131.338 44.068
Total depreciation (1.264.669) - (1.264.669)
Depreciation of properties for own use (6.408) (3.736)
Depreciation of investment properties (1.258.261) (610.883)
Others -
Total management expenses (39.612) 0 (39.612)
Investment properties (39.612) (39.612)
Expenses associated with investment portfolio management
-
Others -
Income from Investments for Insurances with a Single Investment Account
982.346 1.751.644
2.733.991
Total Investment Impairment 171.991 171.991
Investment properties -
Assets under Leasing -
Properties for own use -
Financial investments 171.991 - 171.991
Others
Total Investment Income 95.514.415 10.537.253 106.051.668
203
AUDITED FINANCIAL STATEMENTS
Others (87.270) 131.338 44.068
Total depreciation (1.264.669) - (1.264.669)
Depreciation of properties for own use (6.408) (3.736)
Depreciation of investment properties (1.258.261) (610.883)
Others -
Total management expenses (39.612) 0 (39.612)
Investment properties (39.612) (39.612)
Expenses associated with investment portfolio management
-
Others -
Income from Investments for Insurances with a Single Investment Account
982.346 1.751.644
2.733.991
Total Investment Impairment 171.991 171.991
Investment properties -
Assets under Leasing -
Properties for own use -
Financial investments 171.991 - 171.991
Others
Total Investment Income 95.514.415 10.537.253 106.051.668
204
AUDITED FINANCIAL STATEMENTS
NOTE 36. OTHER INCOME
As of December 31, 2012, the detail of Other Income is as follows:
Items M$
Interest from premiums -
Other income 1.555.412
Total Other Income 1.555.412
NOTE 37. OTHER EXPENSES
As of December 31, 2012, the detail of Other Expenses is as follows:
Items M$
Financial expenses 1.639.758
Bank expenses (adjustment and prov. premium and instrument write-offs )
-
Impairment -
Others 39.415
Total Other Expenses 1.679.172
205
AUDITED FINANCIAL STATEMENTS
NOTE 38. EXCHANGE RATE AND ADJUSTABLE UNIT DIFFERENCES
As of December 31, 2012, the detail of Exchange Rate Difference is as follows:
Items Debits Credits
Assets 51.418.501 50.245.592
Financial assets at fair value 16.943.131 23.301.318
Financial assets at amortized cost 28.296.813 23.269.211
Loans
Investments for insurances with a single Investment Account (SIA)
4.974.574 3.090.615
Real estate investments 8.916 6.202
Accounts receivable from insured parties
Debtors from reinsurance transactions 3.770
Debtors from coinsurance transactions
Reinsurance share of technical reserves
Other assets 1.191.297 578.246
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 51.418.501 50.245.592
206
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:
Items Debits Credits
Assets 11.116.437 48.224.438
Financial assets at fair value 1.777.449 2.059.643
Financial assets at amortized cost 7.484.918 39.899.097
Loans 161.017 6.445
Investments for insurances with a single Investment Account (SIA)
366.768 1.469.733
Real estate investments 1.244.266 4.316.118
Accounts receivable from insured parties
Debtors from reinsurance transactions 7.426 6.386
Debtors from coinsurance transactions
Reinsurance share of technical reserves
Other assets 74.593 467.017
Liabilities 50.852.843 9.904.634
Financial liabilities 290.574 47.752
Technical reserves 50.496.471 9.836.391
Debts with insured parties
Debts from reinsurance transactions 2.578 6.936
Debts from coinsurance transactions
Other liabilities 63.220 13.555
Shareholders’ equity
Income accounts
Revenue accounts
Expense accounts
Investment income
Net debit (credit) to income
Profit/loss from exchange rate difference 61.969.280 58.129.072
207
AUDITED FINANCIAL STATEMENTS
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 M$
Expenses from income tax:
Tax for the period
Credit (debit) for deferred taxes:
Generation and reversal of temporary differences 2.398.502
Change in temporary differences not previously recognized
-
Fiscal benefit from previous accounting periods (1.347.740)
Subtotal 1.050.762
Taxes for rejected expenses Art. 21 14.721
Monthly provisional payments (MPP) for losses
Cumulative Article 31, Paragraph 3
Others
Net Debit (Credit) to Income for Income Tax 1.065.483
208
AUDITED FINANCIAL STATEMENTS
NOTE 40.2. RECONCILIATION OF EFFECTIVE INCOME TAX
Item Tax Rate % Amount M$
Profit before tax 20 660.710
Permanent differences
Additions or deductions
Single tax (rejected expenses) 0,4 14.721
Non-deductible expenses (financial and non-tax expenses)
Tax incentive not recognized in the income statement
Others 11,6 390.052
Effective Rate and Income Tax Expense 32 1.065.483
NOTE 41. CASH FLOW STATEMENT
As of December 31, 2012, the detail of the “Others” heading exceeding 5% is as follows:
Other Income Related to Financing Activities
Detail Amount M$
Current account revenue 747.670
Sales under repurchase agreement 133.142.019
Totales 133.889.689
Other Expenses Related to Financing Activities
Detail Amount M$
Credit line use 62.549.328
Current account 1.378.360
Sale under repurchase agreement maturities 104.435.819
Totales 168.363.507
209
AUDITED FINANCIAL STATEMENTS
NOTE 42. CONTINGENCIES AND COMMITMENTS
Type of Contingency or Commitment
Commitment Creditor
Committed Assets Unpaid balance as of Fin. Statement closing date M$
Released Commitment Amount M$
Observations
Type Carrying Value M$
Legal Procedures
Legal Suits
Fundo la Villana, Parcela No. 24, ML B-24
CopVida S.A. 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
210
AUDITED FINANCIAL STATEMENTS
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. 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.
211
AUDITED FINANCIAL STATEMENTS
NOTE 44. FOREIGN CURRENCY
1. ASSET AND LIABILITY POSITION IN FOREIGN CURRENCY
Assets US Dollar Currency 2 Other Currencies Consolidated (M$)
Investments
Deposits
Others 202.971.071 202.971.071
Premium debtors
Insured parties
Reinsured parties 46.046 46.046
Claim debtors
Other debtors 1.417.945 1.417.945
Other assets 950.038 950.038
Total Assets 205.385.100 0 0 205.385.100
Liabilities Currency 1 Currency 2 Other CurrenciesConsolidated (M$)
Reserves
Ongoing Risk
Unexpired Claims
Claims payable
Premiums payable
Insured parties
Reinsured parties 363.423 363.423
Debts with Institutions
Financial institutions
Hedging transactions 178.248.964 178.248.964
Other liabilities
Total Liabilities 178.612.387 0 0 178.612.387
Net Position 26.772.713 0 0 26.772.713
212
AUDITED FINANCIAL STATEMENTS
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 Consolidated (M$)
Net Movement
Net Movement
Inflows Outflows Inflows Outflows
Premiums (654.259) (654.259) (654.259) (654.259)
Claims 1.202.153 1.202.153 1.202.153 1.202.153
Others
Net Movement 1.202.153 (654.259) 547.894 1.202.153 (654.259) 547.894
213
AUDITED FINANCIAL STATEMENTS
3. CONTRIBUTION MARGIN OF FOREIGN CURRENCY INSURANCE TRANSACTIONS
ITEMS U.S. Dollar Consolidated M$
Direct Premium
Accepted Premium
Technical Reserve Adjustment
Operating Income 0 0
Intermediation Cost
Claim Cost
Administration Cost
Total Operating Cost 0 0
Investment Proceeds 14.800.577 14.800.577
Other Revenue and Expenses
Price-level Restatement
Income before Tax 14.800.577 14.800.577
NOTE 45. SALES CHART BY REGION (GENERAL INSURANCES)
*This is not applicable to Life Insurance Companies.
214
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 Premium Insured Amount Reserve Risk Capital
Direct Accepted Assigned Direct Accepted Assigned Direct Accepted Assigned Direct Accepted Assigned
Accidents 138.489 0 0 66.335.248 0 0 1.471.591
Health 637.699 0 0 1.789.424.298 0 0 144.255
Additional 3.474.597 0 0 1.325.583.323 0 0 1.281.830
Subtotal 4.250.784 0 0 3.181.342.869 0 0 2.897.676 0 0
W/O Res. Unex. Claims (W/O Additional)
930.448.838 1.611.421 928.837.417
W/ Res. Unex. Claims (W/O Additional)
2.461.804.221 120.620.433 (143.014)
215
AUDITED FINANCIAL STATEMENTS
COMPAÑÍA DE SEGUROS CORPVIDA S.A.
SOLVENCY MARGIN - LIFE INSURANCES
(Figures in thousands of Chilean pesos)
1. GENERAL INFORMATION
CHART No. 1
Insurances Premium Insured Amount Reserve Risk Capital
Direct Accepted Assigned Direct Accepted Assigned Direct Accepted Assigned Direct Accepted Assigned
Accidents 138.489 0 0 66.335.248 0 0 1.471.591
Health 637.699 0 0 1.789.424.298 0 0 144.255
Additional 3.474.597 0 0 1.325.583.323 0 0 1.281.830
Subtotal 4.250.784 0 0 3.181.342.869 0 0 2.897.676 0 0
W/O Res. Unex. Claims (W/O Additional)
930.448.838 1.611.421 928.837.417
W/ Res. Unex. Claims (W/O Additional)
2.461.804.221 120.620.433 (143.014)
216
AUDITED FINANCIAL STATEMENTS
Insurances Premium Insured Amount Reserve Risk Capital
Direct Accepted Assigned Direct Accepted Assigned Direct Accepted Assigned Direct Accepted Assigned
Under DL 3500
AFP Ins. 0 0 0
Disab. and Surv. 0 0 0
Life Annuities 1.717.478.111 0 (41.257.606)
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
Claim Cost Over The Last Three Years
INSURANCES Year I Year I-1 YEAR I-2
Direct Accepted Assigned Direct Accepted Assigned Direct Accepted Assigned
Accidents 50.117 0 0 66.056 0 0 38.791 0 0
Health 912.119 0 0 2.036.595 0 0 6.108.880 0 0
Additional 825.202 0 0 1.816.405 0 0 2.052.173 0 0
Total 1.787.438 0 0 3.919.056 0 0 8.199.844 0 0
217
AUDITED FINANCIAL STATEMENTS
Insurances Premium Insured Amount Reserve Risk Capital
Direct Accepted Assigned Direct Accepted Assigned Direct Accepted Assigned Direct Accepted Assigned
Under DL 3500
AFP Ins. 0 0 0
Disab. and Surv. 0 0 0
Life Annuities 1.717.478.111 0 (41.257.606)
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
Claim Cost Over The Last Three Years
INSURANCES Year I Year I-1 YEAR I-2
Direct Accepted Assigned Direct Accepted Assigned Direct Accepted Assigned
Accidents 50.117 0 0 66.056 0 0 38.791 0 0
Health 912.119 0 0 2.036.595 0 0 6.108.880 0 0
Additional 825.202 0 0 1.816.405 0 0 2.052.173 0 0
Total 1.787.438 0 0 3.919.056 0 0 8.199.844 0 0
218
AUDITED FINANCIAL STATEMENTS
B. INSURANCES NOT GENERATING RESERVES FOR UNEXPIRED CLAIMS
Solvency MarginRisk Capital Factor % R. Ratio (%)
CIA S.V.S. TOTAL
928.837.417 0,0005 76% 50% 352.958
COMPAÑÍA DE SEGUROS CORPVIDA S.A.SOLVENCY MARGIN - LIFE INSURANCES(Figures in thousands of Chilean pesos)SUMMARYCHART No. 3
A. ACCIDENT, HEALTH, AND ADDITIONAL INSURANCESSolvency MarginAs A Function Of As A Function Of TOTALF.P. F.R (%) F.S. F.R. (%)% Premiums CIA. S.V.S. % Claims CIA. S.V.S.14 95 17 95
Accidents 138.489 85 18.419 51.655 85 8.342 18.419
Health 637.699 73 84.814 3.019.198 73 487.600 487.600
Additional 3.474.597 98 476.715 1.564.593 98 260.661 476.715
Total 982.734
219
AUDITED FINANCIAL STATEMENTS
B. INSURANCES NOT GENERATING RESERVES FOR UNEXPIRED CLAIMS
COMPAÑÍA DE SEGUROS CORPVIDA S.A.SOLVENCY MARGIN - LIFE INSURANCES(Figures in thousands of Chilean pesos)SUMMARYCHART No. 3
A. ACCIDENT, HEALTH, AND ADDITIONAL INSURANCESSolvency MarginAs A Function Of As A Function Of TOTALF.P. F.R (%) F.S. F.R. (%)% Premiums CIA. S.V.S. % Claims CIA. S.V.S.14 95 17 95
Accidents 138.489 85 18.419 51.655 85 8.342 18.419
Health 637.699 73 84.814 3.019.198 73 487.600 487.600
Additional 3.474.597 98 476.715 1.564.593 98 260.661 476.715
Total 982.734
220
AUDITED FINANCIAL STATEMENTS
C. INSURANCES WITH RESERVES FOR UNEXPIRED CLAIMS
Solvency MarginTotalLiabilities
IndirectLiabilities
Insurance Reserves ReservesLetter BInsurances
Fund ValueReserve
Cpy. Oblig. Less A - B -F. V. Res
Subtotal (Prev. Column / 20)
Subtotal (Fund V. Res. / 140)
Total
Accidents Health Additional Letter A
1.850.980.915 1.471.591 144.255 1.281.830 2.897.676 1.611.421 86.516.922 1.759.954.896 87.997.745 617.978 88.615.723
Solvency Margin ( A + B + C )
NOTE 46.2. SOLVENCY MARGIN - GENERAL INSURANCES
*This is not applicable to Life Insurance Companies.
221
AUDITED FINANCIAL STATEMENTS
Solvency MarginTotalLiabilities
IndirectLiabilities
Insurance Reserves ReservesLetter BInsurances
Fund ValueReserve
Cpy. Oblig. Less A - B -F. V. Res
Subtotal (Prev. Column / 20)
Subtotal (Fund V. Res. / 140)
Total
Accidents Health Additional Letter A
1.850.980.915 1.471.591 144.255 1.281.830 2.897.676 1.611.421 86.516.922 1.759.954.896 87.997.745 617.978 88.615.723
Solvency Margin ( A + B + C )
222
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
Obligation to invest Technical Reserves and Risk Capital
1.891.472.946
Technical Reserves 1.801.207.021 Risk Capital 90.265.925 Investments representing Technical Reserves and Risk Capital
1.912.315.533
Surplus (Deficit) of Investments representing Technical Reserves and Risk Capital
20.842.587
Net Worth 139.028.292 Shareholders' Equity 150.259.834 Non-Cash Assets (-) (11.231.542) INDEBTEDNESS 139.028.292 Total 12,83 Financial 0,40
223
AUDITED FINANCIAL STATEMENTS
NOTE 48.2. INVESTMENT OBLIGATION
Total Pension Fund Insurance Reserves
1.676.220.505
Reserve for Life Annuities 1.676.220.505 5.31.21.21 Reserve for Life Annuities
1.717.478.111
5.14.22.10 Reinsurance Interest in Reserve for Life Annuities
41.257.606
Disability and Survival Insurance Reserve5.21.31.22 Disability and Survival Insurance Reserve5.14.22.20 Reinsurance Interest in Disability and Survival Insurance Reserve
Total Non-Pension Fund Insurance Reserves
124.981.373
Reserve for Ongoing Risks
2.697.029
5.21.31.00 Reserve for Ongoing Risks
2.697.029
5.14.21.00 Reinsurance Interest in Reserve for Ongoing RisksReserve for Unexpired Claims 15.873.108 5.21.31.30 Reserve for Unexpired Claims
15.873.108
5.14.23.00 Reinsurance Interest in Reserve for Unexpired Claims5.21.31.40 Fund Value Reserve 86.516.922
224
AUDITED FINANCIAL STATEMENTS
Reserve for Private Annuities 16.994.622 5.31.21.50 Reserve for Private Annuities
17.137.636
5.14.24.00 Reinsurance Interest in Reserve for Private Annuities
143.014
Reserve for Claims 2.899.692 5.31.21.60 Reserve for Claims 2.929.842 5.14.25.00 Reinsurance Interest in Reserve for Claims
30.150
Catastrophic Reserve against Earthquakes
-
5.21.31.70 Catastrophic Reserve against Earthquakes5.14.26.00 Reinsurance Interest in Catastrophic Reserve against Earthquakes
Total Additional Reserves 5.143 Reserve for Premium Inadequacy
5.143
5.21.31.80 Reserve for Premium Inadequacy
5.143
5.14.27.00 Reinsurance Interest in Reserve for Premium InadequacyOther Technical Reserves - 5.21.31.90 Other Technical Reserves5.14.28.00 Reinsurance Interest in Other Technical Reserves5.21.32.00 Debts from Insurance Transactions
- -
225
AUDITED FINANCIAL STATEMENTS
TOTAL OBLIGATION TO INVEST TECHNICAL RESERVES
1.801.207.021
Risk Capital 90.265.925 Solvency Margin 90.265.925 Debt Capital((PE+PI)/5) General Insur. Cps. ((PE+PI-RVF)/20)+(RVF/140) Life Insur. Cps.
86.516.922
Current Liabilities + Indirect Liabilities - Technical Reserves
56.064.102
Minimum Equity UF 90,000 (UF 120,000 for Reinsurance)
2.055.668
TOTAL INVESTMENT OBLIGATION (TECHNICAL RESERVES + RISK CAPITAL)
1.891.472.946
226
AUDITED FINANCIAL STATEMENTS
NOTE 48.3.NON-CASH ASSETS
Non-Cash Assets
Financial Statem
ent A
ccount
Initial Asset
M$
Initial Date
Asset
BalanceM
$
Period Repaym
entM
$
Repayment
Term(m
onths)
Software5.15.12.00 232.038
09-04-
2009871.436 70.113 36
Software Use Licenses 5.15.12.00 139.725
30-04-
200957.829 21.750 36
Trademark Licenses
5.15.12.00 6.98031-12-2006
7.050 - -
A.F.R5.15.12.00 101.485
30-06-
201198.949 - -
Non-Proportional Reinsurance 5.14.12.30 221.641
30-06-
2011193.196 751.042 12
Remodeling5.15.12.00 952.419
31-12-2007
625.464 439.657 60
Current Accounts 5.15.35.00-5.15.33.00
15.874.28831-03-2009
9.353.568 - -
Others5.15.12.00 26.949
31-10-2011
24.050 - -
TOTAL NON-CASH INVESTMENTS
17.555.525 11.231.542
227
AUDITED FINANCIAL STATEMENTS
NOTE 48.4. INVESTMENT STOCK
Assets Representing Technical Reserves And Shareholders' Equity
Partial Total
a) Instruments issued by the Government or the Central Bank
75.789.129
b) Term deposits or securities representing deposit-taking at Banks and Financial Institutions
480.656.515
b.1 Deposits and others 82.401.666 b.2 Bank bonds 398.254.849
c) Mortgage bonds issued by Banks and Financial Institutions
142.572.239
d) Bonds, promissory notes, and debentures issued by public or private comps.
573.342.409
dd) Investment fund installments 24.729.354 dd.1 Movable assets 12.839.120 dd.2 Real estate 9.888.029 dd.3 Risk capital 2.002.205 e) Shares of admitted publicly traded companies 50.045.436 ee) Shares of real estate publicly traded companiesf) Credit to insured parties for non-due and non-accrued premiums (1st group)g) Claims receivable from reinsurers (for claims paid to insured parties), non-due
h) Real estateh.1 Non-residential real estate for own use or lease
157.297.315
h.2 Non-residential real estate granted under leasing
115.177.705
228
AUDITED FINANCIAL STATEMENTS
h.3 Residential, urban real estate for own use or lease h.4 Residential, urban real estate granted under leasingi) 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) 1.081.492 j) International assets 205.278.279 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 discountn) Endorsable mortgage loan notes 49.341.664 ñ ) Banks 2.099.437 o ) Short-term fixed-income mutual funds 4.249.610 p ) Other financial investments 24.359.099 q ) Consumer credit 6.249.803 r ) Claims receivable 46.047
Total Assets Representing Technical Reserves and Equity
1.912.315.533
Assets Representing Uncommitted EquityShares of closely held companies 2.644.649International assets 7.373Non-residential real estate 184.062Movable asset investment fund installments 28.141.220Real estate investment fund installments 131.719
229
AUDITED FINANCIAL STATEMENTS
Cash on hand 980.840Plant for own use 1.257.538Other real estate investments 129.281Software
Total Assets Not Representing Technical Reserves and Equity
33.476.682
Total Investments 1.945.792.215
230
AUDITED FINANCIAL STATEMENTS
NOTE 49. RELEVANT EVENTS
1) On March 13, 2012 and pursuant to Official Circular No. 991 of the Superintendency of Securities and Insurance, the fact that Ms. Sylvia Yáñez Moreno assumed the position as Human Resource Manager was reported as a material fact. 2) On March 29, 2012, the third Company Board of Director Meeting was held, where the financial statements for the financial period ending on December 31, 2011 as reviewed by External Auditors were approved, and an Ordinary Shareholder Meeting was convened for April 24, 2012 at 09:30 at the Company’s offices. 3) At an Ordinary Shareholder Meeting held on April 24, 2012, the following agreements were made: - The Annual Report and Financial Statements for the 2011 financial period were approved. - It was agreed that Board members were to be remunerated for their duties as follows: a) Chairman of the Board remuneration: UF 115 per month. b) Regular Board Member remuneration: UF 90 per month. c) Acting Board Member remuneration: UF 15 per attended session. d) Remuneration of Board Members who are part of the Company’s Investment Committee: UF 50. e) Remuneration of Board Members who are part of the Company’s Auditing Committee:
UF 50. - Deloitte were appointed as External Auditors for the 2012 financial period.
- Also at this Meeting the decision was made to revoke the current Board of Directors and appoint the following persons.
Regular Members Maria Catalina Saieh Guzmán Jorge Andrés Saieh Guzmán Fernando Siña GardnerAlejandro Ferreiro YazigiCharles Naylor del RioFrancis Lucchesi Bruce Stanforth Alternate Members Alvaro Caviedes Barahona Pilar Dañobeitía Estades Alvaro Barriga Oliva Felipe Cuadra Campos Consuelo Gatica MatamalaCharles Naylor del Rio Consuelo Gatica Matamala José Tomás Errázuriz GrezCarlos Ducci González
4) On April 26, 2012 and pursuant to Official Circular No. 991 of the Superintendency of Securities and Insurance, the fact that, at an Ordinary Shareholder Meeting held on April 24, 2012 the decision was made to proceed to total renovation of the Company’s Board members
231
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 paid-in within 30 days from the date of the SVS resolution approving the capital increase.
232
AUDITED FINANCIAL STATEMENTS
NOTE 50.- REPORT IN RESPONSE TO GENERAL REGULATION NO. 306
Accounting Policies l.-INSURANCE TRANSACTIONS a. Premiums These correspond to the amount owed to the Company by each reinsured party on account of premiums less acceptance discount and impairment. b. Other Assets and Liabilities from Insurance and Reinsurance Contracts i. Underlying derivatives in insurance contracts The Insurance Contracts executed by the Company have no underlying derivatives.
ii. Insurance contracts acquired by means of business combinations or portfolio assignments The Company has no such insurance contracts. iii. Acquisition expenses Acquisition expenses are directly recognized under income on an accrual basis. c. Technical Reserves i. Reserve for Ongoing Risk This corresponds to the Company’s obligation with insured and reinsured parties originating 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 Risk 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 Risk 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
233
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) ReserveThe 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
234
AUDITED FINANCIAL STATEMENTS
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, 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
235
AUDITED FINANCIAL STATEMENTS
entity and have not been paid. This reserve must include those payments that, as of estimation date, are due and have not yet been paid to the insured party. The Claim Reserve shall be recorded under a “Claim Reserve” liability account, segregating the reserve for Reported Claims and the Reserve for Claims Occurring But Not Reported (OYNR) on financial statement closing date. The Reported Claim Reserve shall in turn be classified as follows: (a) Claims Settled But Not Paid (b) Claims Settled But Contested by the Insured Party (c) Claims Under Settlement Process The estimation of the Reserve for Claims Occurring But Not Reported shall be based on the general standard application method provided for in NCG No. 306 (Incurred Claim Triangles) or any of the alternative methods provided for in the same regulation (Simplified Method and Transition Method), or any methods that have been submitted by the Company and approved by the Superintendency of Securities and Insurance, as applicable. vii. Catastrophic Reserve against Earthquakes This is not applicable to Life Insurance Companies. viii. Premium Inadequacy Reserve The Premium Inadequacy Reserve corresponds to the amount obtained by multiplying the Reserve for Ongoing Risk less reinsurance by the inadequacy factor. The calculation methodology
is indicated in General Regulation No. 6 of the Superintendency of Securities and Insurance. Regardless of the risk grouping method used to determine the amount of the Premium Inadequacy Reserve, this is assigned and reported in the financial statements based on the FECU branch classification determined by the Superintendency of Securities and Insurance. ix. Additional Reserve based on Liability Adequacy Test The Company conducts a Liability Adequacy Test on each quarterly financial statement closing date in order to assess the adequacy of the reserves set up in accordance with current regulations issued by the Superintendency of Securities and Insurance. The test is based on current hypothesis re-estimations assumed by the Company for estimating cash flows originating from insurance contracts, considering insured party options or benefits as well as contracted guarantees. The contract flows indicated in the previous paragraph consider at least the flows arising from expected claims and direct expenses related to settlement thereof, discounting, if applicable, the future premiums the insured party has agreed to pay as part of the insurance contract. The Liability Adequacy Test is conducted considering flows before taxes. If, due to the application of this Test, a Technical Reserve inadequacy is verified, the Company shall set up an additional Technical Reserve in the statement of income corresponding to the respective closing date. However, based on the periodical evaluation of the items analyzed in this Test, the additional Technical Reserve may be reversed in the income statement corresponding to the
236
AUDITED FINANCIAL STATEMENTS
respective closing date. The Liability Adequacy Test recognizes the risk assigned to the reinsurer, i.e., when the need to set up an additional Technical Reserve is determined, this is recognized in gross terms under liabilities and the reinsurer participation under assets. When a Premium Inadequacy Test is conducted, the Company evaluates whether this test meets the requirements to be considered in replacement of the Liability Adequacy Test. If this is so, the latter Test is not required. The Test is applied for groups of contracts sharing similar risks and jointly managed as part of the 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. If, in accordance with the Superintendency of Securities and Insurance regulations, the gradual recognition of mortality tables for technical reserve calculation is effective, the Liability Adequacy Test does not consider the differences in reserves accounted for by such gradual process. Consequently, if an inadequacy is verified, an additional reserve is set up only for the amount exceeding the difference in technical reserves accounted for by the gradual process. x. Reserve for Insurances with a Single Investment Account In accordance with the instructions issued in NCG No. 306, the deposit and risk components associated with an insurance with SIA shall be accounted for on a joint basis. Therefore, the
total funds transferred to the Company by the contracting party shall be recognized as the insurance premium. The deposit component shall be recognized as a technical reserve denominated “Fund Value Reserve” and shall correspond to the Policy Value of each contract on the reserve estimation date in accordance with the conditions established in each contract, without deduction of any potential redemption charges. In the case of insurances associated with NCG No. 176 of 2005, neither the technical reserve associated with the deposit component nor the contract premium shall be recognized under liabilities. Concerning the insurance component, the 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 investments that back up the reserve. The estimation of this reserve shall be based on the instructions issued by NCG No. 306, and the determined amount shall be recorded in the “Gap Reserve” equity account, as indicated in Official Circular No. 2022 of the Superintendency of Securities and Insurance.
xi. Other Technical Reserves The reserve for debts with insured parties and other reserves set up by the insurance entity in accordance with current regulations and any additional reserves that must be set up by Mutual Fund Companies according to their by-laws shall be recorded under this heading.
237
AUDITED FINANCIAL STATEMENTS
xii. Reinsurer Interest in Technical Reserves The Company recognizes reinsurer interest in technical reserves on an accrual basis, in accordance with current contracts. d. Matching (to be reported for policies with validity prior to January 1, 2012) This value shall be estimated as the difference between the Base Technical Reserve and the Financial Technical Reserve. It shall be applied only for policies with validity prior to January 01, 2012. II.- Technical Reserve Calculation Criteria and Methodology Reserve calculation was carried out based on the instructions contained in General Regulations NCG No. 306 and No. 318 of the Superintendency of Securities and Insurance, issued on April 14, 2011 and September 1, 2011, respectively. All the assumptions used in calculating reserves are reviewed and updated on a quarterly basis, as applicable. For the determination of current Financial Statements, the Company exercised the following options contained in the aforementioned regulations: 1. Life Annuities Pursuant to the provisions contained in NCG No. 318, No. 2, the Company applied the instructions in paragraph 2.1 only to policies affective as of January 1, 2012. For life annuity policies effective prior to such date, the reserve was calculated pursuant to the instructions provided in Official Circular No. 1512 and other instructions provided by the Superintendency
of Securities and Insurance, effective on these Financial Statement date. 2. Reserve for Ongoing Risk 2.1. Exception for a hedging period shorter than policy validity The Company adhered to the exception contained in paragraph two, letter b), No. 1, Title III of NCG No. 306, introduced through NCG No. 320, with respect to considering, for the purpose of Reserve for Ongoing Risk calculation, the premium hedging and recognition period when this is shorter than policy validity, maintaining at least one reserve equivalent to one month of premium or, if longer, the premium equivalent for the grace period stated in the policy. This is the case for the following insurances: - Collective life and health insurance policies and collective title insurance policies with a validity period equal to or exceeding 1 year where premium is monthly calculated based on an agreed upon rate over the insured capital amounts for policyholders with coverage valid in the corresponding month. - Coverage cost of insurances with SIA. - Policies or Additional Coverages with annual validity with or without an automatic renewal clause with a payment frequency less than its validity. hese products are marketed through Individual, Collective, Bank Insurance, and Title Insurance business lines.
238
AUDITED FINANCIAL STATEMENTS
2.2. Reserve for terms exceeding 4 years Pursuant to the final paragraph of No. 1, Title III of SVS NCG No. 306, the Company informed the Superintendency of its decision to apply the calculation of the Reserve for Ongoing Risk based on terms exceeding 4 years for coverages for which there is no probability table registered at the registry of the Superintendency of Securities and Insurance for the calculation of Reserves for Unexpired Claims. 2.3. Application In accordance with the transitory provisions contained in Title VI, NCG No. 306, the new instructions concerning the setup of the Reserve for Ongoing Risk, set out in No. 1 of Title II of the aforementioned regulation, were applied only to policies issued or renewed as of January 1, 2012. 3. Reserve for Unexpired Claims Pursuant to paragraph 2.1, Title III of General Regulation No. 306, the Superintendency of Securities and Insurance, through Official Circular No. 10,210 of April 20, 2012, authorized the Company to apply a Reserve for Unexpired Claims in the following cases: - Insurances with a single premium associated with credits (consumer credit title insurances), regardless of the coverage term (death risk). - Individually subscribed insurances with a single or leveled (death risk) premium, marketed under an individual or collective policy, without a renewal clause and regardless of policy validity. - Products with a leveled (death risk) premium, with premium refund, regardless of policy validity.
4. Reserve for Claims Occurring But Not Reported (OYNR) For the estimation of the OYNR Reserve, the Company used the standard method generally applied for all modeled risks. The standard method corresponds to the method based on the development of incurred claims, also called “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. The methodology and criteria applied by the Company for weighing and segregating each FECU branch were presented to the Superintendency of Securities and Insurance and are based on the distribution of incurred claims on Financial Statement date. 5. Reserve for Premium Inadequacy The Premium Adequacy Test was conducted in accordance with the standard method stated in Exhibit 1 to NCG No. 306, which is based on the “Combined Ratio” concept, which relates the insurance company technical disbursements with the recognized premium to address the former, using the 12-month historical information contained in the Financial Statements immediately prior to the date of determination thereof.
239
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.
240
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)
Code Branch Reserve for Ongoing Risk
Reserve for Unexpired Claims
Fund Value Reserve
OYNR TSP TAP Total
101 Full Individual Life 0 0 0 0 0 0 0
102 Term Individual Life Insurance 0 0 0 -891 0 0 -891
103 Other Insurances with Individual SIA 0 0 0 111.224 0 0 111.224
104 Mixed or Total Individual 0 0 0 0 0 0 0
105 Private Annuities 0 0 0 0 0 0 0
106 Total Simple or Deferred Capital 0 0 0 0 0 0 0
107 Family Protection 0 0 0 0 0 0 0
108 Individual Disability or Incapacity Insurance 45.948 -9.653 0 -252 0 0 36.043
109 Individual Health Insurance 0 0 0 250.257 0 0 250.257
110 Individual Personal Accidents 0 0 0 -13.424 0 0 -13.424
111 Assistance 0 0 0 0 0 0 0
112 Individual Title Insurance 0 0 0 0 0 0 0
113 Individual Mandatory Personal Accident Insurance 0 0 0 0 0 0 0
114 VPFS Insurances 0 0 0 5.421 0 0 5.421
150 Other individual insurances 0 0 0 0 0 0 0
201 Full Collective Life Insurance 0 0 0 0 0 0 0
202 Term Collective Life Insurances 86.233 -36.874 0 -62.687 0 0 -13.328
203 Mixed or Collective Disability or Incapacity Insurance 0 0 0 0 0 0 0
204 Collective Disability or Incapacity Insurance 0 0 0 0 0 0 0
207 Family Protection 0 0 0 0 0 0 0
209 Collective Health Insurance 0 0 0 -7.333 5.417 0 -1.916
210 Collective Personal Accident Insurance 1.800.533 -349.147 0 -9.410 0 0 1.441.976
211 Collective Assistance Insurance 0 0 0 0 0 0 0
212 Collective Title Insurance 391.327 -147.720 0 -98.949 0 0 144.658
214 Insurances with Collective VPFS 0 0 0 0 0 0 0
TOTAL 2.324.041 -543.395 0 173.956 5.417 0 1.960.019
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AUDITED FINANCIAL STATEMENTS
IV.-Premium Inadequacy Test
The methodology used corresponds to that described in Exhibit 1 to NCG No. 306, with the following considerations: 1. For each FECU branch, the premiums, claims, and reserves corresponding to the coverages with a Reserve for Ongoing Risk were identified. 2. Intermediation costs were assigned based on the proportion represented by the Branch Direct Premium with respect to the Earned Premium for insurances with a Reserve for Ongoing Risk. 3. In those cases where the application of NCG No. 306 implied a change to the reserve methodology, the opening reserve was re-estimated for the purpose of recording its variation over the period under analysis. 4. Administration Expenses were assigned by FECU branch in accordance with the Company´s functional expense allocation criteria.
V.- Liability Adequacy Test
Date Result M$
31-12-2011 -
31-03-2012 -
30-06-2012 -
30-09-2012 -
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 of assessing the adequacy of the technical reserves set up as of the closing date of each quarterly Financial Statement. In accordance with the above, when defining and applying this Test, the Company took into account the following requirements: a) To consider generally accepted principles on an international level and the IFRS concepts associated with this Test. b) To use the Company’s estimates with respect to mortality and interest rate, i.e., to analyze the adequacy of the reserve in accordance with the Company’s own experience and portfolio characteristics. c) To consider the options or benefits for policyholders and the agreed upon guarantees provided to the former by the Company. d) To recognize the risk assigned to reinsurers for accounting purposes. 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 minimum requirement, current estimates of all contractual cash flows and related cash flows, such as settlement costs and cash flows from options and underlying guarantees, must be considered.
242
AUDITED FINANCIAL STATEMENTS
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.
243
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.
244
AUDITED FINANCIAL STATEMENTS