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Allianz Annual Report 2013

Annual Report 2013    Allianz Group218 45 – Related party transactions Information on the remuneration of Board members and transac- tions with these persons can be found in the Remuneration Report, starting on    page 37. Transactions between ­Allianz SE and its subsidiaries that are to be deemed related parties have been eliminated in the consolidation and are not disclosed in the notes. Business relations with joint ventures and associates are set on an arm’s length basis. are undiscounted and therefore exceed the reserves for insurance and investment contracts presented in the consolidated balance sheet that reflect the time value of the money. For contracts without fixed and determinable payments, the ­Allianz Group has made assumptions to estimate the undiscounted cash flows of contractual policy benefits including mortality, morbid- ity, interest crediting rates, policyholder participation in profits and future lapse rates. These assumptions represent current best esti- mates and may differ from the estimates originally used to establish the reserves for insurance and investment contracts as a result of the lock-in of assumptions on the issue dates of the contracts as required by the ­Allianz Group’s established accounting policy. The effect of discounting and the differences between locked-in and best estimate assumptions is € 516,977 mn. For further information, see note 2 to the consolidated financial statements. Due to the uncertainty of the assumptionsused,theamountpresentedcouldbemateriallydifferent from the actual incurred payments in future periods. Furthermore, these amounts do not include € 178,822 mn of pre- miums and fees expected to be received, expenses incurred to parties other than the policyholders such as agents and administrative expenses;nordotheyincludeinvestmentincomeearned.Inaddition, these amounts are presented net of reinsurance expected to be received as a result of these cash flows. For further information on reserves for insurance and investment contracts, see note 20 of the consolidated financial statements. Transfers of financial assets As of 31 December 2013, the ­Allianz Group substantially retained all the risks and rewards out of the ownership of transferred assets. There were no transfers of financial assets that were derecognized in full or partly, in which ­Allianz continues to control the transferred assets. Transfers of financial assets mainly relate to securities lending and repurchase agreement transactions. Transferred financial assets in repurchase agreement and securities lending transactions are mainly available-for-sale debt and equity securities for which substantially all of the risks and rewards are retained. As of 31 December 2013, the carrying amount of the assets transferred for securities lending trans­ actions amounted to € 6,836 MN (2012: € 1,531 MN). For repurchase agreements, the carrying amount of the assets transferred amounted to € 991 mn (2012: € 952 MN) and the carrying amount of the associated liabilities amounted to € 1,001 MN (2012: € 951 MN). Assets pledged and collateral are described in note 46 – Contingent liabilities, commit- ments, guarantees, and assets pledged and collateral. 46 – Contingent liabilities, commitments, guarantees, and assets pledged and collateral Contingent liabilities Litigation Allianz Group companies are involved in legal, regulatory, and arbi- tration proceedings in Germany and a number of foreign jurisdic- tions, including the United States. Such proceedings arise in the ordinary course of businesses, including, amongst others, their activities as insurance, banking and asset management companies, employers, investors and taxpayers. It is not feasible to predict or determine the ultimate outcome of the pending or threatened pro- ceedings. Management does not believe that the outcome of these proceedings, including those discussed below, will have a material adverse effect on the financial position and the results of operations of the ­Allianz Group, after consideration of any applicable reserves. On 24 May 2002, pursuant to a statutory squeeze-out procedure, the general meeting of Dresdner Bank AG resolved to transfer shares from its minority shareholders to ­Allianz as principal shareholder in return for payment of a cash settlement amounting to €  51.50 per share. ­Allianz established the amount of the cash settlement on the basis of an expert opinion, and its adequacy was confirmed by a court appointedauditor.Someoftheformerminorityshareholdersapplied for a court review of the appropriate amount of the cash settlement in a mediation procedure (“Spruchverfahren”). In September 2013, the district court (“Landgericht”) of Frankfurt dismissed the minority shareholders’ claims in their entirety. This decision has been appealed to the higher regional court (“Oberlandesgericht”) of Frank- furt. In the event that a final decision were to determine a higher amount as an appropriate cash settlement, this would affect all of the approximately 16 mn shares that were transferred to ­Allianz.

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