Aviva 2005 Annual Report Download - page 154

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Financial statements continued
Notes to the consolidated financial statements continued
35 – Insurance liabilities continued
Mortality tables used
2005 2004
Assurances
Non-profit AM80/AF80 or AM92/AF92 AM80/AF80 or AM92/AF92
or TM92/TF92 or TM92/TF92
adjusted for smoker status and adjusted for smoker status and
age/sex specific factors age/sex specific factors
Pure endowments and deferred annuities before vesting Nil or AM80/AF80 or Nil or AM80/AF80 or
AM92/AF92 adjusted AM92/AF92 adjusted
General annuity business after vesting IML00/IFL00 adjusted IM80/IF80 adjusted
plus allowance for future plus allowance for future
mortality improvement mortality improvement
Pensions business after vesting PCMA00/PCFA00 adjusted PMA80/PFA80 adjusted
plus allowance for future plus allowance for future
mortality improvement mortality improvement
Annuities in payment
General annuity business IML00/IFL00 adjusted IMA80/IFA80 adjusted
plus allowance for future plus allowance for future
mortality improvement mortality improvement
Pensions business PCMA00/PCFA00 adjusted PMA80/PFA80 adjusted
plus allowance for future plus allowance for future
mortality improvement mortality improvement
(b) France
The majority of provisions arise from a single premium savings product and are based on the accumulated fund value, adjusted to
maintain consistency with the value of the assets backing the policyholder liabilities. The net premium method is used for prospective
valuations, in accordance with local regulation, where the valuation assumptions depend on the date of issue of the contract.
The valuation discount rate also depends on the original duration of the contract and mortality rates are based on industry tables.
There have been some reductions to valuation discount rates in 2005.
Valuation discount rates Mortality tables used
2005 2004 2005 and 2004
Life assurances 1.75% to 4.5% 2.5% to 4.5% PM60-64, TD73-77, TD 88/90
Annuities 1.75% to 4.5% 2.5% to 4.5% TPRV (prospective table)
(c) Netherlands
On transition to IFRS, the valuation of most long-term insurance and participating investment contracts was changed from existing
methods that generally used historic assumptions to an active basis using current market interest rates. A liability adequacy test is
performed in line with IFRS requirements, using investment values and future investment income. Where assets are valued at market
value, then the future investment income is based on expected market-based investment yields.
Valuation discount rates Mortality tables used
2005 and 2004 2005 and 2004
Life assurances actual swap rate GBM 61-65, GMB71-75,
GBM/V 76-80, GBM 80-85,
GBM/V 85-90 and GBM/V 90-95
Annuities in deferment and in payment actual swap rate GBMV 76-80, GBMV 85-90,
GBMV 95-00, Coll 1993/2003
and DIL 98, plus further allowance
for future mortality improvement
Aviva plc 2005 Financial statements
152