WORKERS’ COMPENSATION INSURANCE TOP-UP COVER ROMANIA Victor Schultheiss, Thomas Rothärmel FIAR 2011, 24th May 2011

Agenda 2  1.Munich Re (Group)  2. Center of Competence Workers’ Compensation  3.Overview Workers’ Compensation Insurance  4. Romanian Workers Compensation System  5.Top-Up Coverage

1. MUNICH RE (GROUP)

4 Added value within the group Diversified structure – more security Munich Re (Group)* Asset management *This listing is incomplete and provides no precise indication of shareholdings. 1. Munich Re (Group) ReinsurancePrimary insuranceMunich Health Belgium

 ERGO: Germany-based and represented in over 30 countries  Offers a comprehensive range of insurance, benefit, and pension products and services  ERGO: Germany-based and represented in over 30 countries  Offers a comprehensive range of insurance, benefit, and pension products and services  Leading expertise worldwide since nearly 130 years  Full range of products: from traditional reinsurance to alternative risk financing  Diversification as key success factor  Leading expertise worldwide since nearly 130 years  Full range of products: from traditional reinsurance to alternative risk financing  Diversification as key success factor  Munich Re as only specialised health risk carrier with global scope  Flexible combination of business model and products as unique selling proposition  Munich Re as only specialised health risk carrier with global scope  Flexible combination of business model and products as unique selling proposition ReinsurancePrimary insuranceMunich Health Assetmanagement Successful business model 1. Munich Re (Group) 5

2. CENTER OF COMPETENCE WORKERS‘ COMPENSATION 6

 Generate substantial reinsurance business for Munich Re  Concentrate and amplify expertise within the Munich Re Group  Provide advice and service on both insurance and reinsurance questions, from legislative to operational  Observe and accompany private participation and reform processes MR Workers’ Compensation unit was established in 1998 as Centre of Competence Our Unit 2. Centre of Competence Workers‘ Compensation 7

 Underwriting  Research and Consultancy Main activities Our Unit 2. Centre of Competence Workers‘ Compensation 8

CoC Workers‘ Compensation Insurance Underwriting - Markets with private participation 9 Workers‘ Compensation Insurance Possible Workers’ Compensation reform Where we provide capacity Where private/semi-private participation is allowed

Overview WCS private and public systems Terrorism Occupational diseases: Are they insurable? Economic incentives Occupational diseases Rating systems Commuting accidents Assessing disability Residual markets and uninsured risks Prevention and Insurance Different publications from general to specific topics Main activities – Research and consultancy Our Unit 2. Centre of Competence Workers‘ Compensation 10

11  Workers’ compensation symposium each two/three years (2001, 2004, 2007, 2009)  Workshops with clients  Active involvement i.r.o. workers’ compensation reforms/systems discussions (Brazil, China, Estonia, UK, Denmark, Colombia, Norway, Germany, etc.) Main activities – Research and consultancy Our Unit 2. Centre of Competence Workers‘ Compensation

3. OVERVIEW WORKERS‘ COMPENSATION INSURANCE 12

13  Workers‘ compensation systems provide coverage to help the insured and the families to overcome the burden of an occupational injury or an occupational disease  Provide benefits in cash (temporary incapacity, invalidity, pensions, lump sums) and benefits in kind (prevention, health care, rehabilitation)  Major characteristics: no fault system, compulsory, highly regulated, employer is responsible for taking/paying this insurance  Within social security regulations or strongly linked to them Overview 3. Overview Workers‘ Compensation Insurance

In terms of the International Labour Organisation ILO:  Workers suffer over 250 million accidents every year and 160 million occupational diseases  Almost die each year from their jobs (5,500/day)  The economic losses are equivalent to 4 per cent of the world's gross national product  Social consequence for families and communities are incalculable Workers’ Compensation Insurance 14 Overview 3. Overview Workers‘ Compensation Insurance

4. ROMANIAN WORKERS‘ COMPENSATION SYSTEM

Country profile: Romania Law 346 of 5 June 2002* Scope of cover (public risk carrier- CNPAS)  Occupational accidents  Occupational diseases  Commuting accidents  Occupational accidents  Occupational diseases  Commuting accidents Tariff  Pay-as-you-go basis  CNAPS (National House of Pensions and other Social Insurance Rights) generally calculates the tariff on a pay-as-you-go basis. 0,5%-4,0% of the payroll  Pay-as-you-go basis  CNAPS (National House of Pensions and other Social Insurance Rights) generally calculates the tariff on a pay-as-you-go basis. 0,5%-4,0% of the payroll Benefits Benefits in kind:  Medical costs until recovery and recuperation of work ability  Costs of professional rehabilitation and reconversion  Aids and appliances Benefits in cash :  Temporary work disability o Indemnification of 80% - 100% of average salary o Indemnification for temporary change of work place  Permanent work disability o Compensation for injuries of the bodily integrity o Lumpsum and/ or pension payments for lost income  Death Survivors‘ pension, Funeral expenses Benefits in kind:  Medical costs until recovery and recuperation of work ability  Costs of professional rehabilitation and reconversion  Aids and appliances Benefits in cash :  Temporary work disability o Indemnification of 80% - 100% of average salary o Indemnification for temporary change of work place  Permanent work disability o Compensation for injuries of the bodily integrity o Lumpsum and/ or pension payments for lost income  Death Survivors‘ pension, Funeral expenses 16 * 4. Romanian Workers‘ Compensation System

5. TOP UP COVERAGE

Workers‘ Comp. (part of social security) Other general Social Security Schemes Disability level: Between 20-50%: Proportional lump sum max.12 times National average monthly salary Disability level More than 50%: Pension until old age (plus lump sum max. 12 monthly salaries) Statutory Workers‘ Compensation - Benefits covered Statutory Coverage 80%-100% average salary of the last 6 months after the 3rd day Temporary Disability Permanent Disability Old age pension 5. Top Up Coverage 18 Max. 180 days

Workers‘ Compensation Top-Up-Product Benefits covered Top-Up Product Temporary Disability Permanent Disability Old age pension 5. Top Up Coverage 19 Max. 180 days Private Disability Cover: More than 50% disability: Guarantee of 90% - 100% monthly salary: (a) until pension age (b) for life

Workers‘ Comp (part of social security) Other general Social Security Schemes Disability level: Between 20-50%: Proportional lump sum max.12 times National average monthly salary Disability level: More than 50%: Pension until old age (plus lump sum max. 12 monthly salaries) Statutory Workers‘ Compensation vs. Top-Up-Product Benefits covered Top-Up Product Statutory Coverage 80%-100% average salary of the last 6 months after the 3rd day Temporary Disability Permanent Disability Old age pension 5. Top Up Coverage 20 Max. 180 days Private Disability Cover: More than 50% disability: Guarantee of 90% - 100% monthly salary: (a) until pension age (b) for life

Example 1: Monthly salary RON / 800 €; 20 y of contributions, 12 y before full pension age; 100% disability (2nd degree) Disability Pension: RON / 250 € Salary: RON / 800 € Gap: RON / 550 € to be covered by Top-Up-Policy Top-Up-Product: Private Disability Cover

Example 2: Monthly salary RON / €; 10 y of contributions, 22 y before full pension age; 100% disability (2nd degree) Gap: RON / 964 € Salary: RON / € Disability Pension: 996 RON / 236 € to be covered by Top-Up-Policy Top-Up-Product: Private Disability Cover

THANK YOU VERY MUCH FOR YOUR ATTENTION! LIFE/WORKERS_COMPENSATION/DEFAULT.ASPX LIFE/WORKERS_COMPENSATION/DEFAULT.ASPX 23 Victor Schultheiss Head of CoC Workers' Compensation Tel.: +49 (89) Dr. Thomas Rothärmel Senior Underwriter Tel.: +49 (89)