Life insurance and annuities entitlements (62062, 62162, 62262, 63062, 63162, 63262) 7.187 Life insurance and annuities entitlements are fi nancial claims policyholders have against an enterprise off ering life insurance or providing annuities. Th is category consists of liabilities of life insurance companies and annuity providers for prepaid premiums and accrued liabilities to life insurance policyholders and benefi ciaries of annuities. Life insurance and annuity entitlements are the obligation to provide benefi ts to policyholders, or to compensate benefi ciaries upon the death of policyholders,52 and thus are kept separate from shareholders funds. Th ese entitlements are regarded as liabilities of the insurance companies and assets of the policyholders and benefi ciaries. Annuities entitlements are the actuarial calculation of the present value of the obligations to pay future income until the death of the benefi ciaries.

7.188 Th e amount to be recorded as the stock positions for life insurance and annuities entitlements is similar to that for nonlife insurance technical reserves in that it represents obligations to meet future claims already accrued. However, in the case of life insurance, the level of the entitlements is considerable and represents the present value of all expected future benefi ts.53 Pension entitlements [GFS]54 (62063, 62163, 62263, 63063, 63163, 63263)

7.189 As explained in paragraphs A2.5A2.7, entitlements to social insurance benefi ts are divided between those relating to pensions and those relating to all other forms of benefi ts (i.e., nonpensions). Th e distinction between the two is important because the GFS recognizes liabilities for employment-related pensions, regardless of whether there are actually assets set aside to meet the entitlements, but recognizes reserves for employment-related nonpension benefi ts only when these reserves actually exist (see paragraph 7.195). Furthermore, a distinction is made between social security schemes and employmentrelated schemes. Th is section deals with entitlements to employment-related pension schemes. 7.190 Pension entitlements are fi nancial claims that existing and future pensioners55 hold against

52 Th is is distinct from term insurance, which is regarded as nonlife insurance (see footnote 51). 53 In the commercial accounts of insurance corporations, some of these obligations will be described as provisions for bonuses and rebates. Th is is the result of the insurance industrys practice of smoothing benefi ts over time and retaining some benefi ts until the policy matures. 54 [GFS] indicates that an item has the same name but diff erent coverage in the 2008 SNA. 55 Existing and future pensioners include past and current employees, as well as existing pensioners, but exclude future employees. either their employer or a fund designated by the employer, to pay pensions earned as part of a compensation agreement between the employer and employee. Th e nature of these claims, and the corresponding liabilities of the units operating the pension funds, depends on the type of benefi t promised.