F.30. Offsetting of financial instruments
The following tables provide details relating to the effect or potential effect of netting arrangements, including rights of set-off associated with the entity’s recognised financial assets and recognised financial liabilities.
As at 31 December 2016, financial assets were as follows:
| As at 31 December 2016 | Related amounts not set off in the balance sheet | |||||
|---|---|---|---|---|---|---|
| 31.12.2016 (CZK million) | Gross amounts of recognised financial assets | Gross amounts of recognised financial liabilites set off in the balance sheet | Net amounts of financial assets presented in the balance sheet | Financial instruments | Cash collateral received | Net amount |
| Derivative financial assets | 287 | – | 287 | (205) | – | 82 |
| Receivable from derivative collateral paid | 1,634 | – | 1,634 | (1,634) | – | – |
| Reinsurance receivables | 2,206 | – | 2,206 | – | – | 2,206 |
| Total | 4,127 | – | 4,127 | (1,839) | – | 2,288 |
As at 31 December 2016, financial liabilities were as follows:
| As at 31 December 2016 | Related amounts not set off in the balance sheet | |||||
|---|---|---|---|---|---|---|
| 31.12.2016 (CZK million) | Gross amounts of recognised financial assets | Gross amounts of recognised financial liabilites set off in the balance sheet | Net amounts of financial assets presented in the balance sheet | Financial instruments | Cash collateral paid / Reinsurance receivables | Net amount |
| Derivative financial liabilities | (2,563) | — | (2,563) | 205 | 1,634 | (724) |
| Liability from deposit received from reinsurers | (1,401) | — | (1,401) | — | — | (1,401) |
| Celkem | (3,964) | — | (3,964) | 205 | 1,634 | (2,125) |
As at 31 December 2015, financial assets were as follows:
| As at 31 December 2015 | Related amounts not set off in the balance sheet | |||||
|---|---|---|---|---|---|---|
| 31.12.2015 (CZK million) | Gross amounts of recognised financial assets | Gross amounts of recognised financial liabilites set off in the balance sheet | Net amounts of financial assets presented in the balance sheet | Financial instruments | Cash collateral paid / Reinsurance receivables | Net amount |
| Derivative financial assets | 434 | – | 434 | (196) | – | 238 |
| Receivable from derivative collateral paid | 950 | – | 950 | (950) | – | – |
| Reinsurance receivables | 2,191 | – | 2,191 | (642) | – | 1,549 |
| Celkem | 3,574 | – | 3,574 | (1,787) | – | 1,787 |
As at 31 December 2015, financial liabilities were as follows:
| As at 31 December 2015 | Related amounts not set off in the balance sheet | |||||
|---|---|---|---|---|---|---|
| (CZK million) | Gross amounts of recognised financial assets | Gross amounts of recognised financial liabilites set off in the balance sheet | Net amounts of financial assets presented in the balance sheet | Financial instruments | Cash collateral paid / Reinsurance receivables | Net amount |
| Derivative financial assets | (2,066) | – | (2,066) | 196 | 950 | (921) |
| Liability from deposit received from reinsurers | (1,402) | – | (1,402) | – | 642 | (760) |
| Reinsurance receivables | (3,468) | – | (3,468) | 196 | 1,592 | (1,681) |
Financial assets and liabilities are offset in the statement of financial position when the Group has a legally enforceable right to offset and has the intention to settle the asset and liability on a net basis, or to realise the asset and settle the liability simultaneously. There are no instruments that are offset directly in the balance sheets as at 31 December 2015 and 2016.
The Group is subject to an enforceable master netting arrangement in the form of an ISDA agreement with a derivative counterparty. Under the terms of this agreement, offsetting of derivative contracts is permitted only in the event of bankruptcy or default of either party to the agreement. In order to manage the counterparty credit risk associated with derivative trades, the parties have executed a collateral support agreement.
The reinsurer left with the Group a certain part of the ceded premium as a security of its ability to fulfill its future obligation, without any undue delay.