PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2012 and 2011 and January 1, 2011December 31, 2010 and For the Years then Ended December 31, 2012 and 2011
Figures are Presented in Millions of Rupiah, unless Otherwise Stated
- 44 - Time deposits represent deposits of customers which may only be withdrawn after a certain
period of time in accordance with the agreement with the customers at the time of placement, or the customers will be fined or penalized if withdrawals are made before
maturity. Deposits include syariah deposits and unrestricted investments consisting of:
•
Savings Wadiah is entrusted funds in the form of savings where income fund owners get a bonus.
•
Unrestricted investments in current accounts, savings and time deposits represent deposits of customers funds that provide benefits for the owner of funds from Islamic
unit revenue for the use of these funds in accordance with the ratio determined and approved previously.
Deposits from other banks are liabilities to other banks in the form of demand deposits, call money less than or 90 days and time deposits with original maturities of each agreement.
w. Insurance Contracts
Insurance contracts are those contracts wherein the insurers have accepted significant insurance risk from another party the policyholders by agreeing to compensate the
policyholders if a specified uncertain future event the incurred event adversely affects the policyholders.
Once a contract has been classified as an insurance contract, it remains an insurance contract over the remaining term, even if the insurance risk reduces significantly during this
period, unless all rights and obligations are extinguished. Reinsurance Assets
Reinsurance assets are the cedants net contractual rights under a reinsurance contract. The amount of reinsurance asset of the liability for future policy benefits, unearned
premiums and estimated claims liability are estimated in a manner consistent with the approach used in determining the liability for future policy benefits, unearned premiums and
claims liability estimates, based on the terms and the terms of the insurance contract. The Group’s management assesses at each consolidated statement of financial position
date whether reinsurance assets are impaired. Reinsurance asset impairment occurs if, and only if, there is an objective evidence that the cedant did not receive the entire amount in
accordance with the contract requirements and the impact can be measured reliably. Impairment loss is recognized in the consolidated of statement of comprehensive income.
Liabilities for future policy benefits Liabilities for future policy benefits represent the difference between the present value of
future policy benefits and the present value of the expected future premiums.
PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2012 and 2011 and January 1, 2011December 31, 2010 and For the Years then Ended December 31, 2012 and 2011
Figures are Presented in Millions of Rupiah, unless Otherwise Stated
- 45 - The liabilities for future policy benefits are estimated by the Company’s registered actuary
based on outstanding policies in-force, including policies with unpaid premiums within the policy grace period, in accordance with actuarial principles generally accepted in Indonesia.
Policy acquisition costs are not deferred and are charged to expense as incurred. Changes in liabilities for insurance policy benefits are recognized as underwriting expenses in the
consolidated statement of comprehensive income for the current year. Unearned Premiums and Estimated Claims Liability
For ASM, unearned premiums are calculated in aggregate using a certain percentage which is at least 10 of net premiums for policies which cover a period of not more than one 1
month and at least 40 of net premiums for policies which cover a period of more than one 1 month, in accordance with the decree No. 424KMK.062003 dated September 30, 2003
issued by the Minister of Finance of the Republic of Indonesia, while for AJSM, unearned premium is calculated using the daily method by individual policy.
For ASM, estimated claims liability represents amounts set aside to provide for the outstanding and incurred claims arising from insurance policies in force during the
accounting period. The liability includes both repoted and unreported claims and calculated in accordance with the guidelines set by the Minister of Finance of the Republic of Indonesia
No. 424KMK 062003 dated September 30, 2003, while for AJSM, estimated claims liability represents amounts set aside to provide for the outstanding and incurred claims arising from
insurance policies in force during the accounting period. Management’s judgment is required to determine the amount of estimated claims liability.
Insurance Contract Liability Insurance contract liability consist of premium received in advance, estimated claim
liabilities, unearned premium and liability for future policy benefit. On reporting date, the Group assesses insurance contract liabilities whether the recognized insurance liabilities are
adequate using current estimates of future cash flow under the insurance contract. If the assessment represent insurance liability less related deferred acquisition cost is not
adequate if compared to current estimates of future cash flows, the deficiency is recognized in consolidated statement of comprehensive income.
x. Loans Received
Loans received are stated at amortized cost. Loans received classified as financial liability measured at amortized cost using the effective
interest rate method. Transaction costs are deducted from the loans received. Note 2i.
y. Securities Issued
Securities issued are securities issued in the form of Medium Term Notes MTN. Medium term notes are classified as financial liabilities measured at amortized cost using
the effective interest method. Transaction costs that are directly attributable to the acquisition value of securities issued are deducted from the amount securities issued
Note 2i.
