ING Direct 2009 Annual Report Download - page 307

OUT OF THE MONEY
A call option is said to be out of the money if the exercise price is
higher than the price of the underlying value; a put option is said to
be out of the money if the exercise price is lower than the price of
the underlying value.
OVER-THE-COUNTER INSTRUMENT
A non-standardised financial instrument not traded on a stock
exchange but directly between market participants.
PLAN ASSETS
Comprise assets held by a long-term employee benefit fund and
qualifying insurance policies. Assets held by a long-term employee
benefit fund are assets (other than non-transferable financial
instruments issued by the reporting enterprise) that:
are held by an entity (a fund) that is legally separate from the •
reporting enterprise and exists solely to pay or fund employee
benefits; and
are available to be used only to pay or fund employee benefits, •
are not available to the reporting enterprise’s own creditors (even
in bankruptcy), and cannot be returned to the reporting
enterprise, unless either the remaining assets of the fund are
sufficient to meet all the related employee benefit obligations of
the plan or the reporting enterprise or the assets are returned to
the reporting enterprise to reimburse it for employee benefits
already paid.
A qualifying insurance policy is an insurance policy issued by an
insurer that is not a related party of the reporting enterprise, if the
proceeds of the policy:
can be used only to pay or fund employee benefits under a •
defined benefit plan; and
are not available to the reporting enterprise’s own creditors (even •
in bankruptcy) and cannot be paid to the reporting enterprise,
unless either the proceeds represent surplus assets that are not
needed for the policy to meet all the related employee benefit
obligations or the proceeds are returned to the reporting
enterprise to reimburse it for employee benefits already paid.
POST-EMPLOYMENT BENEFIT PLANS
Formal or informal arrangements under which a company provides
post-employment benefits for one or more employees. Post-
employment benefits are employee benefits other than termination
benefits and equity compensation benefits, which are payable after
the completion of employment.
PREFERENCE SHARE
Similar to an ordinary share but carries certain preferential rights.
These rights usually concern the guarantee of a fixed (cumulative)
return to the shareholder or a guaranteed return on the investment.
PREMIUMS EARNED
The portion of net premiums written in current and past periods
which applies to the expired portion of the policy period, calculated
by subtracting movements in unearned premium reserves from net
premiums.
NEW SALES
New sales of life insurance, measured as Annual Premium
Equivalent (APE), have been defined as the total of annual
premiums and 10% of single premiums received on production in a
given period.
NET ASSET VALUE
Used in the equity method of accounting. The initial net asset value
of the investment is determined by the fair value of the assets and
liabilities of the investee. After the initial valuation of assets and
liabilities of the investee at fair value, the assets and liabilities of the
investee are valued in accordance with the accounting policies of
the investor. The profit and loss account reflects the investor’s share
in the results of operations of the investee.
NET PREMIUMS WRITTEN
Gross premiums written for a given period less premiums ceded to
retrocessionaires during the given period.
NET PRESENT VALUE AT RISK (NPV-AT-RISK)
Establishes what the value of future cash flows is in terms of
today’s monetary value. NPV-at-Risk establishes the change in value
of future cash flows as a result of interest rate changes in terms of
today’s monetary value.
NON-VOTING EQUITY SECURITIES
Core Tier 1 securities issued to the Dutch State in November 2008
for a total consideration of EUR 10 billion. In December 2009 EUR 5
billion was paid back to the Dutch State. This capital injection
qualifies as core Tier 1 capital for regulatory purposes.
NOTIONAL AMOUNTS
Represent units of account which, in respect of derivatives, reflect
the relationship with the underlying assets. They do not reflect,
however, the credit risks assumed by entering into derivative
transactions.
OPERATING LEASE
A lease other than a finance lease.
OPERATIONAL RISK
The risk of a direct or indirect loss resulting from inadequate
or failed internal processes, people and systems or from
external events.
OPTION CONTRACTS
Give the purchaser, for a premium, the right, but not the obligation,
to buy or sell within a limited period of time a financial instrument
or currency at a contracted price that may also be settled in cash.
Written options are subject to market risk, but not to credit risk
since the counterparties have already performed in accordance with
the terms of the contract by paying a cash premium up front.
ORDINARY SHARE
An equity instrument that is subordinate to all other classes of
equity instruments. Ordinary shares participate in the net profit
for the financial year after other types of shares such as
preference shares.
2.4 Additional information
ING Group Annual Report 2009 305
Financial glossary (continued)