Please note that this situation have been further clarified in the Final Report related to the Reporting ITS.

Lines of business “Index-linked and unit-linked insurance”, “Other life insurance” and “Health insurance” are split between “Contracts without options and guarantees” and “Contracts with options or guarantees”. For this split the following should be considered:
-    “Contracts without options and guarantees” should include the amounts related to contracts without any financial guarantees or contractual options, meaning that the technical provision calculation does not reflect the amount of any financial guarantees or contractual options. Contracts with non-material contractual options or financial guarantees that are not reflected in the technical provisions calculation should also be reported in this column;
-    “Contracts with options or guarantees” should include contracts that have either financial guarantees, contractual options, or both as far as the technical provision calculation reflect the existence of those financial guarantees or contractual options.

Referring to the examples given (considering the information available as classification of the products needs to consider the details of each single product):
(a) 5 year term insurance contract with guaranteed death benefit. Does the guaranteed death benefit constitute a non-financial guarantee? The column “Contracts with options or guarantees” should include contracts that have either financial guarantees, contractual options, or both as far as the technical provision calculation reflect the existence of those financial guarantees or contractual options”. Financial guarantees are connected with investment results (for example minimum return rate on investment) and not with reimbursement for insured event. As death benefit is reimbursement for insured event and is not connected with investment results a “5 year term insurance contract with guaranteed death benefit” should be classified as “Contracts without options and guarantees”.

(b) Unit-Linked contract with a surrender value option where the surrender value is defined as the value of the units. In this case the basis for setting the surrender value is pre-determined but the amount itself is not known at the outset. If the surrender value is defined as the value of the units in principle it does not affect the value of technical provisions so it should be reported under the column without any options and guarantees.