The Balance Sheet 199
investment in fi nancial or nonfi nancial assets. Th ese
funds issue shares (if a corporate structure is used) or
units (if a trust structure is used). Investment funds
include money market funds (MMF) and non-MMF
investment funds.^48 Investment fund shares or units
refer to the shares issued by mutual funds and unit
trusts, rather than the shares they may hold.
7.175 MMFs are investment funds that invest only
or primarily in short-term money market securities,
such as treasury bills, certifi cates of deposit, and com-
mercial paper. MMF shares and units sometimes are
functionally close to transferable deposits—for exam-
ple, accounts with unrestricted check-writing privi-
leges. If MMF shares are included in broad money in
the reporting economy, they should be recorded as a
separate item in the balance sheet to allow reconcilia-
tion with monetary statistics.
7.176 Investment funds invest in a range of assets,
such as debt securities, equity, commodity-linked
investments, real estate, shares in other investment
funds, and structured assets.
7.177 Shares (or units) in money market funds or
in other investment funds should be valued in a man-
ner similar to the methods under equity:
- Listed shares should be valued using the market
price of the share. - Unlisted shares should be valued according to
one of the methods described in paragraph 7.172
for unlisted equity and other equity.
Insurance, pension, and standardized
guarantee schemes [GFS] (6206, 6216, 6226,
6306, 6316, 6326)
7.178 Insurance, pension, and standardized guar-
antee schemes comprise:
- Nonlife insurance technical reserves
- Life insurance and annuities entitlements
- Pension entitlements [GFS]
- Claims of pension funds on pension manager
- Provisions for calls under standardized guaran-
tee schemes.
7.179 Th ese reserves, entitlements, and provisions
for calls represent liabilities of a public sector unit as
(^48) Th ese are discussed further in the BPM6, paragraphs 4.73–4.75.
the insurer, pension fund, or issuer of standardized
guarantees, and corresponding assets of the poli-
cyholders or benefi ciaries. In the public sector, it is
usually public fi nancial corporations that engage in
insurance schemes. General government units may
incur liabilities for these reserves, entitlements, and
provisions as operators of nonlife insurance schemes,
nonautonomous or unfunded pension schemes, and
standardized guarantee schemes.^49
7.180 Th e value of a public sector unit’s assets in the
form of insurance, pension, and standardized guar-
antee schemes—as a policyholder—is determined by
the amount of prepaid premiums plus estimates for
claims established but not yet received by the public
sector unit. Th e value of a public sector unit’s liabili-
ties in the form of each of these instruments is dis-
cussed under the relevant instrument.
7.181 In general, insurance companies and op-
erators of pension funds and standardized guarantee
schemes make actuarial estimates of their liabilities
under these schemes. Th ese estimates will be the usual
source to compile statistics for this instrument.
7.182 Th e following paragraphs briefl y defi ne the
types of reserves, entitlements, and provisions appli-
cable to insurance, pension, and standardized guaran-
tee schemes.^50
Nonlife insurance technical reserves (62061, 62161, 62261, 63061, 63161, 63261).
7.183 Nonlife insurance^51 technical reserves con-
sist of (i) prepayments of net nonlife insurance pre-
miums and (ii) reserves to meet outstanding nonlife
insurance claims. In other words, nonlife insurance
technical reserves consist of premiums paid but not(^49) It is unlikely that a general government unit would incur liabili-
ties with respect to life insurance and annuities, unless it provides
such schemes to its employees.
(^50) Th ese issues are discussed in detail in the 2008 SNA, paragraphs
17.76–17.224.
(^51) Nonlife insurance covers all risks other than life insurance, such
as accidents, sickness, fi re, etc. A policy that provides a benefi t in
the case of death within a given period but in no other circum-
stances, usually called term insurance, is regarded as nonlife
insurance because, as with other nonlife insurance, a claim is pay-
able only if a specifi ed contingency occurs and not otherwise. In
practice, because of the way in which insurance corporations keep
their accounts, it may not always be possible to separate term
insurance from other life insurance. In these circumstances, term
insurance may have to be treated in the same way as life insurance
for practical reasons.