MILLI RE 2023 ANNUAL REPORT

Notes to the Consolidated Financial Statements As of December 31, 2023 Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TL)) (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish) In order to ensure that the calculation of the outstanding claims reserve (“URR”) is free from the misleading effect of the changed outstanding claims reserve calculation method, the outstanding claims provision of the previous period is calculated with the new method and the amount calculated according to the new method as the outstanding claims reserve is calculated in the ongoing risks reserve account is used. 2.28 Equalization reserves In accordance with the Turkish Insurance and Private Pension Regulation and Supervision Authority ‘s Regulation on Technical Provisions, which effective on November 10, 2021, in order to balance the fluctuations in the compensation rates that may occur in the following accounting periods and to cover the catastrophic risks, companies are required to allocate a balancing provision for earthquake guarantees issued in all branches, including additional guarantees issued in the credit and surety branches. In accordance with the Communiqué on Technical Reserves put into effect starting from January 1, 2008, the companies should provide equalization reserve in credit insurance and earthquake branches to equalize the fluctuations in future possible claims and for catastrophic risks. Equalization reserve, started to be provided in 2008, is calculated as 12% of net premiums written in credit insurance and earthquake branches. In the calculation of net premiums, fees paid for non-proportional reinsurance agreements are considered as premiums ceded to the reinsurance firms. The companies should provide equalization reserve up to reaching 150% of the highest premium amount written in a year within the last five years. In case where claims incurred, the amounts below exemption limits as stated in the contracts and the share of the reinsurance firms cannot be deducted from equalization reserves. Claims payments are deducted from first year’s equalization reserves by first in first out method. With the Communiqué released on July 28, 2010 and numbered 27655 “Communiqué on Amendments to Communiqué on Technical Reserves for Insurance, Reinsurance and Pension Companies and the Related Assets That Should Be Invested Against Those Technical Reserves”, ceded premiums of earthquake and credit for non-proportional reinsurance contracts covered multiple branches should be calculated according to percentage of premiums of those branches within the total premiums unless the Company is determined any other methods. Share of earthquake and credit premium of written premiums for non-proportional reinsurance contracts is based on share of earthquake and credit premiums of proportional reinsurance contracts. In accordance with the Communiqué on Technical Reserves, the Company considers 11% of net death premium (including damage payments) as earthquake premium and 12% of that amount is calculated as equalization reserve since the Company not having sufficient data for calculation. After five financial years, in case that provision amount is less than previous year amount depending on written premiums, the difference is recognized in other profit reserves under equity. This amount recorded in equity can either be kept under reserves or can also be used in capital increase or paying claims. Equalization reserves are presented under “other technical reserves” within long term liabilities in the accompanying consolidated financial statements. As at the reporting date, the Group has recognized equalization provision amounting to TL 863.671.777 (December 31, 2022: TL 918.336.138). As of December 31, 2023, Milli Reasürans has deducted TL 404.801.290 (December 31, 2022: TL 6.872.441) from equalization reserve in consequence of realized earthquake losses. At Anadolu Sigorta, the loss effect of the earthquake, which was centered in Kahramanmaraş and affected 11 provinces on February 6, 2023, reflected in our financial statements, was compensated by the equalization reserve and TL 258.889.026 was used from the equalization reserve as of December 31, 2023 (31 December 2022: Unused). 2.29 Related parties Parties are considered related to the Group if; (a) Directly, or indirectly through one or more intermediaries, the party: - Controls, is controlled by, or is under common control with the Group (this includes parent, subsidiaries and fellow subsidiaries); - Has an interest in the Group that gives it significant influence over the Group; or - Has joint control over the Group; (b) The party is an associate of the Group; (c) The party is a joint venture in which the Group is a venturer; (d) The party is member of the key management personnel of the Group; (e) The party is a close member of the family of any individual referred to in (a) or (d); (f) The party is an entity that is controlled or significantly influenced by, or for which significant voting power in such entity resides with directly or indirectly, any individual referred to in (d) or (g) The party is a post-employment benefit plan for the benefit of employees of the Group, or of any entity that is a related party of the Group. A related party transaction is a transfer of resources, services or obligations between related parties, regardless of whether a price is charged. A number of transactions are entered into with related parties in the normal course of business. 207 2023 Annual Report GENERAL INFORMATION FINANCIAL RIGHTS PROVIDEDTOTHE MEMBERS OF THE GOVERNING BODY AND SENIOR EXECUTIVES RISKS AND ASSESSMENT OF THE GOVERNING BODY ACTIVITIES AND MAJOR DEVELOPMENTS RELATED TO ACTIVITIES RESEARCH & DEVELOPMENT ACTIVITIES FINANCIAL STATUS FINANCIAL INFORMATION