ASA KINDLUSTUSE AS

ANNOUNCEMENT

07.04.99

 

 

AB KINDLUSTUSE GRUPP CHANGES THE ALLOCATION STRATEGIES OF ASA 

KINDLUSTUS AND AB ELUKINDLUSTUS RESERVES 

 

AB Kindlustuse Grupp has decided to change the investment strategies 

of ASA Kindlustus and AB Elukindlustus insurance-technical reserves 

to meet the requirements set by the amendments to the law on 

insurance, which will become effective as of 01.06.99, announced the 

Chairman of the Supervisory Board of AB Kindlustuse Grupp, Leonid 

Apananski. 

 

According to Apananski, the respective amendments will set 

significant restrictions on the investment activities of the 

Estonian-capital based local insurance companies compared to earlier. 

 

To follow the new legal requirements, ASA and AB Elukindlustus must 

first and foremost make changes in the reserves invested in bonds of 

AS Maakri Ehitus. Maakri Ehitus is the company which ordered the 

office building, in Tallinn, Maakri street 23 (currently under 

construction), initially projected as the new headquarter of AB 

Kindlustuse Grupp, to the benefit of which the owner of the estate, 

AB Kindlustuse Grupp, has registered the building rights for 50 

years.   

 

As of today, AB Elukindlustuse AS has invested 9.25 million EEK in 

bonds of AS Maakri Ehitus, which accounts for nearly 24% of the 

company’s total reserves. The total amount of the respective 

investments of ASA Kindlustuse AS is 8.8 million EEK, which accounts 

for approximately 18% of the company’s reserves (48 million EEK). 

 

The aforementioned voluminous mortgage allocations were conducted in 

the conditions of unstable banking system and securities market, and 

due to the lack of alternative financial instruments. One other 

significant factor was also the Insurance Inspectorate’s requirement 

to return the assets invested by AB Elukindlustus and ASA Kindlustus 

from the Israel bank deposits, and not to reinvest them in technical 

reserves of companies, e.g. in bonds of Swedbank, rated at AA+. 

 

Both ASA Kindlustus and AB Elukindlustus have started to restructure 

their investment portfolios to ensure the allocation of the 

insurance-technical reserves by 01.06.99 in the amount required by 

the amendments in the law on insurance. In course of the 

restructuring, both companies will realize a share of current 

investments, and allocate the proceeds from the sale in accordance 

with the requirements of the amended law on insurance.  

 

AS Maakri Ehitus and AB Kindlustuse Grupp will also continue the 

negotiations to with the investors interested in the building of 

Maakri street to finish the project in the current form, or redesign 

it for different purposes. The negotiations are speedier due to the 

EEK 16.3 million claim of SRV Drasser (main contractor for the 

construction works on the Maakri street building) against AS Maakri 

Ehitus for the construction works concluded on the object. The 

receivables of ASA Kindlustus and AB Elukindlustus from AS Maakri 

Ehitus amount to 18.05 million EEK, which are backed with mortgage 

and ownership right on the estate. 

 

 

Additional information: 

Leonid Apananski, AB Kindlustuse Grupp, Chairman of the Supervisory 

Board, tel. (372) 631 3849

Sergei Netšajev, ASA Kindlustuse AS, Chairman of the Management 

Board, tel. (372) 644 3250

Mati Vihul, AB Elukindlustuse AS, member of the Management Board, 

tel. (372) 644 1406

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