GROUPAMA / 2018 Registration document

3 CORPORATE GOVERNANCE AND INTERNAL CONTROL INTERNAL CONTROL PROCEDURES

In addition to this monitoring process, business reviews are conducted twice a year for Group subsidiaries in France and internationally with the Executive Management of Groupama AssurancesMutuelles. These exchanges ensure, in particular, that the Company’s strategicguidelinesconformto the Group framework. These business reviews have included a specific “risk” section presenting,by entity, the level of deploymentof the internal control system and the main activities under way in the area of risk management. Asset/Liability Management and investment strategy As the centralbody, GroupamaAssurancesMutuellesis responsible for defining the Group’s investment strategy. The structuring framework of the managementmeasures related to Asset/Liability Managementand investment operations (general organisationand risk managementmeasures)is formalisedas part of the policy of the Group and Groupama Assurances Mutuelles for Asset/Liability Management and investment risk, approved by the Groupama Assurances MutuellesBoardof Directorson 27 May2015. The Group Investment Department, within the Group Financial Department,is in charge of defining the Group investmentstrategy and relies on, where appropriate, the expertise of the various Group entities or Groupama AssurancesMutuelles departments: Groupama Asset Management, Groupama Immobilier and ❯ outsideManagersfor market analyses; the Financial and Actuarial Departments of the various entities ❯ for informationabout the liabilities of each entity. The major steps of the Group process for analysing assets/liabilities and defining the investment strategy specified below are adapted to the level of each entity on the basis of their objectives andtheir own governance. The investment strategy is thus based on asset/liability analyses performed according to the issues of each company or portfolio and on expert analyses, taking into account the margins of prudence in view of the ALM conclusions (1) . These analyses make it possible to determine: the major arbitrage transactions to be considered in the ❯ portfolios; the investment guidelines bymajor asset class; ❯ the coveragerequirements; ❯ the recommendations on the liability policies of the entities ❯ (underwriting policyin particular). On the basis of this work, the Group Investment Department then formalises the Group investment strategy defining the following elements: the strategic allocation at the Group level and on the main ❯ portfolios (stock); cash flow projections andareas of allocationon these flows; ❯ changes in strategiesby assetclass; ❯ policies specificto derivatives; ❯

investmentson newasset classes; ❯ the risk budgets (budget of capital losses, coverage budget, ❯ IFRS result budget, capitalisation reserve allowance and writeback policy). The Group Investment Department verifies that this strategy complies with the Group risk limits. After this compliance verification is performed, the Group investment strategy is validated by: the Group ExecutiveCommittee; ❯ the Group Audit andRisk Management Committee; ❯ the Groupama AssurancesMutuelles Boardof Directors. ❯ After the Group investment strategy is validated, the Investment Department deploys this strategy operationallyat the level of: each French subsidiary; ❯ each international subsidiary; ❯ certain contractual or regulatory administrative districts (for ❯ French subsidiaries). In the Groupama Assurances Mutuelles subsidiaries, the investment strategies are validated during financial committee or Asset Allocation Committee meetings, depending on their organisation. In the regional mutuals, investment strategies are validated during their financial committee meeting, in keeping with the Group’s investment strategy. The bodies dedicatedto risk managementenabling the Groupama AssurancesMutuelles Executive Managementto carry out regular monitoringof the main risks incurred at Group level are the Group Risk ManagementCommitteeand the specialistGroup committees for the various risk categories(FinancialRisks, InsuranceRisks and Operational Risks) and the capitalManagement Committee. Group Risk Management Committee 3.4.3.1 (CRG) Its membership is the same as that of the Group Executive Committee. Its tasks are to approve the risk management policy and the policies by risk area, particularly by setting the limits of major risks and determining the methods to be used to manage risks, to review and monitor the management of major Group risks and to examine the work of the Group Insurance, Financial and OperationalRisk Committees. These specialist committeescover all risks with a systematicfocus on major Group risks. They ensure continuity of action from the Group RiskManagementCommittee towhich they reportup to the working groups and committees in charge of activities incurring risks. The specialist committees are chaired by a member of the Group Executive Committee. The Group Risk Management and Compliance Department provides coordination and secretarial support to these committees. RISK GOVERNANCE 3.4.3

Asset and Liability Management. (1)

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REGISTRATION DOCUMENT 2018 - GROUPAMA ASSURANCES MUTUELLES

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