Milli Re 2025 Annual Report

On November 23, 2023, the Public Oversight, Accounting and Auditing Standards Authority (KGK) announced that businesses applying the Turkish Financial Reporting Standards (TFRS) must present their financial statements for annual reporting periods ending on or after December 31, 2023, adjusted for inflation in accordance with TMS 29. It also stated that institutions or organizations authorized to regulate and supervise in their respective fields may designate different transition dates for the implementation of the provisions of TMS 29. In response to this announcement, the Insurance and Private Pension Regulation and Supervision Agency (SEDDK) issued a circular on December 6, 2023, numbered 2023/30, stating that the financial statements of insurance, reinsurance, and pension companies as of December 31, 2023, would not be subject to the required inflation adjustment under TMS 29. Subsequently, with the circular numbered 2024/10 issued on March 11, 2024, SEDDK specified that the transition date for insurance, reinsurance, and pension companies to implement inflation accounting would be January 1, 2025. However, with the circular numbered 2024/32 issued on December 6, 2024, the circular numbered 2024/10 was abolished, and it was decided that inflation accounting would not be applied by insurance, reinsurance, and pension companies in 2025. Additionally, the Circular No. 2025/33, “On the Application of Inflation Accounting in the Insurance Sector,” published by the Insurance and Private Pension Regulation and Supervision Agency (SEDDK) on December 25, 2025, has determined that insurance, reinsurance, and pension companies will not apply inflation accounting. Accordingly, TMS 29 has not been applied in the Group’s consolidated financial statements as of December 31, 2025 and 2024. 2.1.2 Other related accounting policies appropriate for the understanding of the financial statements Other accounting policies The Group records premium, commission and compensation accruals based on notifications made to it by insurance and reinsurance companies, and since these notifications are received with a delay due to the closing of their own accounts by the ceding companies in question; written premiums, compensation and commission accruals are recognized in the Company’s financial statements with a 3-month delay. The unearned premium amounts allocated for these proportional transactions are calculated as deferred amounts as of the balance sheet date, based on the record date when account summary notifications from ceding companies are recognized by the Group, as explained in footnote 2.24. Accordingly, the amounts presented in the financial statements for the income statement items prepared as of December 31, 2025, consist of the totals for the three-month period from October 1 to December 31, 2024, and the nine-month period from January 1 to September 30, 2025, representing the totals for the last year. The same delay effect is also reflected in the Group’s balance sheet prepared as of December 31, 2025. However, in its letter addressed to the Company dated 31 August 2010 and numbered B.02.1.HZN.0.10.03.01/42139, the Ministry of Treasury and Finance of the Republic of Turkey stated that there may be some delays in the sending of account statements of ceding companies to reinsurance companies and that the issues regarding reinsurance companies in the regulations previously published by the Ministry of Treasury and Finance of the Republic of Turkey were determined by taking this situation into consideration. Information regarding other accounting polices is disclosed above in “ Note 2.1.1 - Information about the principles and the specific accounting policies used in the preparation of the financial statements” and each under its own caption in the following sections of this report. 2.1.3 Valid and presentation currency The accompanying consolidated financial statements are presented in TRY, which is the Group’s valid reporting currency 2.1.4 Rounding scale of the amounts presented in the financial statements Financial information presented in TRY, has been rounded to the nearest TRY values. 228 MİLLÎ REASÜRANS 2025 Annual Report Notes to the Consolidated Financial Statements As of December 31, 2025 Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TRY)) (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish)