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Notes

Participation policy

Information pursuant to Art. 367h and Art. 367i PGR

Liechtenstein Life Assurance AG (hereinafter referred to as Liechtenstein Life) is a company that conducts life insurance business and is therefore considered an institutional investor pursuant to Art. 367a of the Liechtenstein Persons and Companies Act (PGR). 

Information pursuant to Art. 367h PGR 

(exept for unit-linked life insurance) 

Liechtenstein Life does not invest in listed or traded shares via asset managers. Furthermore, Liechtenstein Life has no direct participation in listed companies. For this reason, Liechtenstein Life has not adopted and does not exercise a participation policy within the meaning of Art. 367h PGR. Corresponding disclosures in accordance with Art. 367h PGR are therefore not applicable.

Disclosures pursuant to Art. 367i PGR 

(exept for unit-linked life insurance) 

The aim of Liechtenstein Life's investment strategy is to ensure the sustainable and long-term solvency of Liechtenstein Life while generating distributable income and fulfilling all obligations to policyholders at all times. Liechtenstein Life has established an asset-liability management process that provides support for the management of investment decisions. In accordance with the maturity structure of the liabilities and the liquidity and security requirements, investments are predominantly made in fixed-interest securities with different maturities. The investment strategy is regularly reviewed and adjusted if necessary. Liechtenstein Life does not invest in shares of listed companies via asset managers. Corresponding disclosures in accordance with Art. 367i PGR are therefore not applicable. 

The following applies to unit-linked life insurance 

Liechtenstein Life invests for the account and risk of its policyholders primarily in mutual funds, but not directly in equities. Insofar as the funds in turn invest in shares, the duty to cooperate provided for in the Shareholder Rights Directive can be exercised by the investment company (in the interests of the funds under management) of the respective fund, among others, but not by Liechtenstein Life. The way in which the duties are fulfilled by the individual investment companies can be found on their respective websites.

Sustainability

Disclosure Regulation (SFDR)

In March 2018, the EU Commission published an action plan for the establishment of a sustainable financial system (‘Action Plan on Financing Sustainable Growth’) based on the goals of the Paris Climate Agreement and the United Nations 2030 Agenda for Sustainable Development. One of the regulations implemented within this framework is Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures (hereinafter ‘Disclosure Regulation’ or ‘SFDR’) in the financial services sector, which regulates the disclosure obligations of financial market participants with regard to the consideration of sustainability issues in their strategies, processes and products. It aims to take more decisive action against climate change by aligning financial flows with lower-emission development that is resilient to climate change. The aim is to provide standardised information on sustainability risks and disclose these in future when making investment decisions. In the interests of sustainable finance, the introduction of this disclosure system is intended to counteract the risk of ‘green washing’.

Essentially, this involves information on

  • the strategies for incorporating sustainability risks into investment decision-making processes
  • adverse effects of sustainability on investment decisions at company level
  • pre-contractual transparency (how sustainability risks are taken into account)
  • and, subsequently, adverse effects on sustainability factors at the level of the financial product.

As part of our advisory activities for our insurance investment products, we also take into account in our advisory process

  • our strategies for the integration of sustainability risks (Article 3 SFDR)
  • the main adverse sustainability impacts of investment decisions (Article 4 SFDR)
  • our remuneration policy (Article 5 SFDR)

Further information on these points can be found below:

(the status of the following information is 30/06/2023)

Information at company level

**Statement on the principal adverse impacts of investment decisions on sustainability factors (Art. 4 SFDR). ** The current Principal Adverse Impact Statement of Liechtenstein Life can be found at https://liechtensteinlife.com/en-DE/markets/de/downloads?type=publication.

Strategies for integrating sustainability risks into the investment decision-making process (Art. 3 SFDR)

The consideration of environmental, social and labour concerns, respect for human rights and the fight against corruption and bribery are issues that play a central role in sustainable investment. Actual or potential negative impacts from the areas of environment, social and governance (ESG) on the value and/or return of investments are referred to as sustainability risks. In particular, this term includes environmental risks and the consequences of climate change (e.g. environmental pollution, destruction of biodiversity and species diversity, natural disasters), social issues (e.g. poor working conditions, child and forced labour) and corporate governance issues (e.g. corruption, tax honesty). Sustainability is very important to Liechtenstein Life Assurance AG (hereinafter ‘Liechtenstein Life’, ‘we’, or ‘us’) and we take it into account in all relevant investment decisions. In addition to the Head of Investments, Liechtenstein Life's internal Investment Committee, the Executive Board and the Investment Committee as a committee of the Board of Directors are responsible for implementation. Two types of investment decisions (a) and (b) and the subsequent sustainability impact on the investment decision-making process (c) are distinguished here: (a) Firstly, investment decisions in which we invest our assets at our own risk. In these cases, the Head of Investments considers the sustainability of the investments, depending on the term and amount of the investment, and explains any concerns in a statement. The members of the above-mentioned committees also inform themselves about the sustainability of the individual investment options independently of this.

The consideration of sustainability is considered independently by the individual committees of Liechtenstein Life. If, after the conclusion of the discussion, existing concerns regarding their consideration cannot be ruled out, no capital investment may be made regardless of the term, expected return and investment amount.

In this respect, Liechtenstein Life will not invest in companies that

  • manufacture or distribute weapons for military or private use,,
  • generate more than 5 per cent of their annual turnover from the extraction and conversion of coal into electricity, 
  • make their earnings dependent on the price development of agricultural commodities,
  • manufacture tobacco products, and 
  • are involved in the development and operation of gambling or the production and distribution of pornographic content.
  • We also exclude investments in companies that violate the UN Global Compact. 

This list is not exhaustive. Investments that do not violate the aforementioned requirements may also be rejected. The above rules apply to all investment decisions and share classes over which we have a direct influence as an investor. We obtain the information on sustainability required for our decisions from various providers of sustainability data. Among other things, we use the services of the external data provider Morningstar Sustainalytics, which provides comprehensive sustainability data.

(b) We also consider investment decisions in which weinvest assets at the risk of our clients. Here, sustainability is relevant for the management of fund selection in the individual investment-based insurance policies of Liechtenstein Life. When updating and expanding the fund range for our clients, wecheck which funds and to what extent these funds fulfil the internationally recognised rules on sustainability. Where possible, we endeavour to ensure that we offer at least one fund that fulfils the ESG criteria in each risk class and relevant asset class that it covers. 

We regularly check compliance with ESG criteria for all internal special funds, baskets and other investment opportunities that we manage ourselves and offer our clients. For such investment opportunities that do not fulfil these at the time of the review, an adjustment to the investment strategy is reviewed and implemented where possible. In these cases too, the Head ofInvestments considers the sustainability of the funds and explains any concerns in a statement. The members of the above-mentioned committees also inform themselves independently about the sustainability of the individual funds.

Although Liechtenstein Life endeavours to ensure that as many of our clients as possibleinvest in sustainable funds, we will continue to offer and include funds that do not formally fulfil the sustainability criteria. In this way, weensure the greatest possible choice and diversityin the interests of our clients. However, if the Head of Investments or the responsible actuary has concerns regarding the investment policy of individual funds, these can no longer be offered. On the basis of the established measures, Liechtenstein Life ensures that sustainability is comprehensively taken into account in investment decisions within the company. All measures taken are regularly reviewed, adapted and expanded in order to continue to optimally take sustainability into account in the context of capital investment in the future. 

(c) In addition, Liechtenstein Life applies positive selection criteria before every investment decision in the alternative investments and real estate asset classes. In doing so, we examine and evaluate the individual investments specifically with regard to the pursuit of certain sustainability goals (so-called Sustainable Development Goals, ‘SDG’). 

We incorporate the aforementioned ESG criteria into our investment decisions and thus invest specifically in companies with a long-term, value-orientated corporate model. This enables us to reduce sustainability risks. We exclude companies that are particularly affected by the potential impact of sustainability risks right from the start of the investment decision-making process. This includes companies whose business model will become less important from a sustainability perspective (e.g. coal mining) as well as companies whose business model could be significantly negatively impacted by political decisions (e.g. CO2 pricing). We use the IT application of a leading global provider of company-related sustainability analyses and ESG ratings to ensure that the aforementioned ESG criteria are adhered to in the wealth of investment opportunities. After an investment has been made and throughout the term of our investments, compliance with the aforementioned ESG criteria - including subsequent updates - is assessed and monitored through regular screening. Investment decisions can have a negative impact on CO2 pollution, the climate, the animal and plant world, social concerns of employees or corruption and fraudulent behaviour. Along with improving the measurability of individual sustainability indicators and a broader data basis, we plan to weight sustainability indicators (e.g. CO2 emissions, social and corporate governance indicators) accordingly in future and publish them where appropriate. The standard- and business area-based exclusion criteria described above and the consideration of sustainability impacts in the investment decision-making process serve to further minimise negative impacts. Companies that violate our exclusion criteria after an investment has been made are completely excluded from new investments.

Remuneration policy in connection with the consideration of sustainability risks (Article 5 SFDR)

Sustainability is an important concern for Liechtenstein Life and we take this into account in the remuneration of our employees and intermediaries. Our remuneration policy is designed to avoid negative incentives, conflicts of interest and the taking of disproportionately high risks and to work towards the sustainable development of the company. The overarching goal is to ensure long-term, sustainable and profitable growth in all target markets. The remuneration policy is intended to support Liechtenstein Life in achieving this goal. Our corporate mission statement also provides for job security, performance-related remuneration and above-average social benefits for employees. If the strategic goals are achieved, the existence of the company and thus that of the employees' jobs is secured. Corresponding requirements are set out in a corresponding guideline.

In order to avoid false incentives, e.g. to build up a large volume of business instead of a solid and sustainable portfolio, the salary components of the remuneration systems for employees are largely limited to a fixed salary, against the background of which employees do not benefit from entering into business with particular risks when making decisions from an economic perspective. The fixed salary is paid out in twelve, thirteen or fourteen monthly instalments. In addition, a voluntary bonus is currently paid depending on the company's success, which is determined annually by the Board of Directors at the suggestion of the Executive Board.

As satisfied and healthy employees are essential for the long-term sustainable success of Liechtenstein Life, we promote health-conscious and ecological behaviour and want to proactively support the compatibility of family and career. Liechtenstein Life therefore grants its employees subsidies for sporting activities, meals, health insurance and childcare. Organically produced fruit, coffee and drinks are made available to employees free of charge. We are also committed to providing ergonomic workstations, comfortable break rooms and mobile computer equipment for employees, which can also be used when working from home.

In our employee remuneration policy, we emphasise long-term employment and aim to create incentives in the interests of the company. The primary aim of this policy is to ensure the long-term development of the company. However, conflicts of interest that may arise in the course of various activities should be minimised. A conflict of interest exists, for example, whenever employees play a significant role in defining a key figure that influences their own remuneration.

In principle, all employees must fulfil fit and proper criteria according to their status and the functions and tasks they perform. These are set out in a corresponding guideline and are reviewed on an ongoing basis.

The remuneration policy of the intermediaries working for us must alsobe taken into account. It is important to us to apply remuneration systems thatguaranteeprofessional advice in the interests of the client. In addition to the individual contract brokerage, the entire brokered portfolio is also relevant. In the event of early cancellation or other anti-selective behaviour on the part of the client, it is therefore also possible to reclaim remuneration that has already been paid out. Inaddition, brokers receivetrailer fees for long-term business relationships with the end client. Liechtenstein Life isexpresslyin favour of sustainable fund selection by the end client. However, in order torule outconflicts of interest in advising the client, no additional commission is paid to the intermediary. Liechtenstein Life provides all the information required to guarantee professional, independent advice. In addition, we also offer so-called net tariffs without acquisition costs, where the remuneration is agreed betweentheintermediaryand the client. Liechtenstein Life acts as the product provider here.

Liechtenstein Life also has a comprehensive electronic control, reporting and notification system that enables the company to be managed effectively and to recognise at an early stage any developments that could jeopardise the company. There is also an internal electronic and anonymous whistleblower system, which serves to minimise liability risks and make a sustainable contribution to the company's success.

Central risk management summarises the risks identified as part of the risk inventory and assesses the probability of occurrence and the extent of damage, and coordinates measures to deal with these risks where necessary. If any (sustainability) risks arise in the area of remuneration systems, the same procedure is followed. The aforementioned principles prevent the creation of any false incentives in connection with the remuneration systems that could stand in the way of the sustainable development of Liechtenstein Life. They ensure that the remuneration policy is in line with the inclusion of sustainability risks.

Overall, the remuneration policy fulfils all the requirements of the company's sustainability-oriented business and risk strategy. It takes into account the value-based objectives of Liechtenstein Life and our long-term interests.

Sustainability-related disclosures (Article 10 SFDR)

For our unit-linked and unit-linked insurance investment products, funds can also be selected to fulfil any sustainability preferences in the context of fund investment.

According to the categorisation of the Disclosure Regulation, these funds can

  • advertise environmental or social characteristics but do not aim for sustainable investment (so-called light green funds according to Article 8 SFDR), and/or
  • pursue a sustainable investment objective (so-called dark green funds in accordance with Article 9 SFDR).
  • In addition, some of the funds offered may take into account negative impacts on sustainability factors (PAIs) and/or environmentally sustainable criteria in accordance with Taxonomy Regulation (EU) 2020/852.

In order to achieve sustainable characteristics, an investment in at least one fund labelled as an Article 8 or Article 9 SFDR fund (according to the fund list of the respective product) is required for the entire term of the insurance contract.

However, the selection of such light green funds (Article 8 SFDR) and/or dark green funds (Article 9 SFDR) and/or the consideration of adverse sustainability impacts (PAIs) and/or environmental sustainability criteria in accordance with the Taxonomy Regulation does not turn the insurance investment product itself into a sustainable financial product that pursues a sustainable investment objective. The categorisation of the underlying investment options/investment funds is carried out by the respective investment company and may differ from the classification of the insurance investment product. Investment options/investment funds or insurance-based investment products may also be assigned to a different category at a later date.

The information pursuant to Article 10 of the Disclosure Regulation on the sustainable investment funds on which you can base your unit-linked or unit-linked life insurance can be found on the homepage of the respective investment company. The link to the homepage of the respective investment company can be found on the respective ESG factsheets at https://liechtensteinlife.com/fonds. On this page, you will also find further information on the sustainability-related characteristics of the funds we offer in the ESG factsheets.