EDF / 2018 Reference document

2.

RISK FACTORS AND CONTROL FRAMEWORK Insurance

2.5.3

CIVIL LIABILITY INSURANCE (NOT INCLUDING NUCLEAR CIVIL LIABILITY)

With a term of five years and total cover of €275 million, this innovative insurance contract triggers, in the event of a claim, parametric compensation based on a composite index for wind speeds recorded by Météo-France stations weighted by the vulnerability of the distribution network in each region of the Enedis concession area. Cyber risk cover 2.5.5.4 Since 1 July 2017, cyber risk cover has been put in place. The €100 million coverage policy underwritten for two years covers all EDF SA entities and the subsidiaries of the Group. Its purpose is to cover the expenses incurred to handle major disruptions caused by a cyber-attack against the Group's information systems.

EDF holds general civil liability insurance covering EDF, Enedis and their controlled subsidiaries against the financial consequences of civil liability (not including nuclear damage) that they may incur in doing business as a result of damage caused to third parties. In particular, this programme covers the risks of civil liability associated with the operation of structures (hydroelectric dams, fossil fuel-fired power plants, substations and other network facilities), risks associated with development of the Group’s renewable energy activities (wind, solar, etc.), as well as risks associated with environmental damage (emissions of solid, liquid or gaseous substances). This cover is purchased to the extent of available capacity under acceptable financial terms on the insurance and reinsurance markets. Maximum cover is €1 billion. Under this programme, the share of risk retained by the Group with regard to an insurable accident (“retention”), including the share of Wagram Insurance company DAC and Océane Re, does not exceed €10 million per insurable accident. Subsidiaries generally opt for lower deductibles that are more consistent with their financial capacity.

2.5.6

SPECIFIC INSURANCE

FOR NUCLEAR FACILITY OPERATIONS Civil liability of nuclear facility 2.5.6.1 operators

2.5.4

CIVIL LIABILITY INSURANCE FOR CORPORATE OFFICERS AND DIRECTORS

In France, EDF’s current insurance policies are in compliance with French Act no. 68-943 of 30 October 1968, Act no. 90-488 of 16 June 1990, and Act no. 2006-686 of 13 June 2006 (known as the “TSN” Act), now codified in the French Environmental Code and which codified the civil liability obligations imposed on nuclear facility operators by the Paris Convention (see section 1.5.6.2.2 “Specific regulations applicable to basic nuclear facilities”). The French Law on Energy Transition for Green Growth enacted on 17 August 2015 subsequently amended the provisions of Articles L. 597-28 and L. 597-32 of the French Environmental Code and, in particular, the limits on the civil liability of nuclear operators which, since 18 February 2016, were brought to €700 million for nuclear installations (€70 million for low-risk installations) and €80 million for risks during transport. In order to comply with the new statutory ceilings, EDF issued a tender notice on 10 August 2015 entitled “EDF SA Nuclear Liability Insurance Programme” to obtain and set up appropriate insurance coverage for nuclear civil liability and related claims management. The insurance coverage obtained following this invitation to tender allows the Group to meet the new obligations while controlling their financial impact. The insurance is shared between the nuclear insurance market (AXA, reinsured by the French nuclear pool Assuratome), the Group’s captive insurance companies, and the nuclear mutual insurance company ELINI. This cover took effect on 18 February 2016 for a three-year term. In view of the likely evolution of the obligations imposed on the operator during the period (notably the entry into force of the Protocols amending the Paris and Brussels Conventions) (see section 1.5.6.2.2 “Specific regulations applicable to basic nuclear facilities”), clauses allowing an exit from the contract have been included. Claims management has been entrusted to the mutual insurance company ELINI, for its computerised claims processing system, and to the company EQUAD which has the necessary human and network resources. In the United Kingdom, where EDF Energy operates nuclear power plants, the nuclear operator’s civil liability rules are similar to French rules. The UK Parliament approved on 4 May 2016 the “Nuclear Installations Order” (order transposing the above-mentioned amending Protocols of February 2004), which makes substantially the same changes as the French TSN Act in 2006 but which, for the most part, shall enter into force only in conjunction with the Protocols This Order will raise the British operators’ obligations from the current limit of £140 million to the equivalent of €700 million, and they will be progressively increased over a five-year period to reach a cap of €1.2 billion.

EDF holds civil liability insurance covering corporate officers and directors of EDF, Enedis and their controlled subsidiaries against the financial consequences of their civil liability incurred in performing their management functions.

2.5.5

DAMAGE INSURANCE

(EXCLUDING NUCLEAR ASSETS) Conventional damage programme 2.5.5.1 The scope of the conventional damage programme includes almost all subsidiaries of EDF, notably Enedis, EDF Energy, Edison and Dalkia. Wagram Insurance Company DAC, the Group’s captive insurance company, together with other insurers and reinsurers, provide extensions of cover (property damage and business interruption) in addition to the covers provided by OIL, bringing the maximum up to €1 billion. Under this conventional damage programme, the Group’s retention per claim, including the deductible (which varies by subsidiary) and the share of the risk retained by Wagram Insurance Company DAC and by Océane Re, does not exceed €15 million. This programme provides cover for business interruption for most subsidiaries in the event of property damage, but not for EDF, which does not benefit from this cover. The actions implemented and measures taken to prevent industrial and environmental risks and limit their impact are described in section 2.2.2 “Implementation of systems for the control of risks and activities”. Cover for “construction” risks 2.5.5.2 EDF has taken out insurance policies covering specific construction risks (construction all-risk and erection/testing all-risk policies). These policies are not included in any Group programme but are purchased on an ad hoc basis for major construction projects such as the EPRS of Flamanville and Hinkley Point C, the construction of combined cycle power plants, dams, etc. These covers are specifically monitored and are renegotiated if unforeseen events occur during the construction projects. Storm cover 2.5.5.3 In connection with the renewal of the storm insurance coverage, Enedis signed with Swiss Re on 27 June 2016 a parametric insurance contract covering the aerial transmission network against the consequences of exceptional storms.

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EDF I Reference Document 2018