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Realized gains and losses from transactions within the private placements and bond portfolios valued at amortized cost are, unless the loss is considered a default loss, deferred and released to the income statements in annual installments over the estimated average remaining term to maturity of the investments sold. 

In the United States a reduction in the carrying value is made for loans which are in default or have experienced a significant downgrade in their credit rating. Such reductions are charged against the loans default provision. In the other countries the provision is accrued until the receivable has legally ceased to exist. 

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The carrying value and market value of private placements are as follows: 

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The carrying value and market value of private placements by contractual maturity at December 31, 2003 are as follows: 

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As no market exists for these investments, market value is calculated based on current interest rates, term to maturity and risk assumptions. Asset-backed loan agreements are priced by outside brokers and corporate private placements are matrix priced primarily with spreads and interest rates from outside sources. In isolated instances, spreads or prices are adjusted for credit specific issues. These assets are valued similarly to a forced sale, therefore large discounts are included for liquidity premiums and the uniqueness of each deal. 

For a proper understanding it should be noted that the market value is not part of the matching of these investments with the related insurance liabilities, which are not stated at market value either. 

The provision for doubtful debts for not yet written-down private placements was nil (2002: EUR 32 million). 

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This item relates to amounts that can be called up after a minimum period of one year. Market value of the deposits is equated with book value. 

