GROUPAMA / 2019 Universal Registration Document

7 FINANCIAL STATEMENTS Consolidated financial statements and notes

Agreements between Groupama Assurances Mutuelles and its subsidiaries and the regional mutuals The reinsurance agreement 2.1 The need for reinsurance has been behind the ties forged among the Groupama mutuals since they were founded more than a century ago. The geographical district covered by the mutuals, which at the time was limited to one or two French departments, led them to seek compensationfor the risks taken at the national level in order to expand, following the example of the growth achieved by the large rival insurance companies. Thus, as time went on, an Internal Reinsurance system grew up amongst the Regional Insurance Mutuals and a Central Mutual, whose reinsurance role is now assumed by Groupama Assurances Mutuelles. The reinsuranceof the regional mutuals by GroupamaAssurances Mutuelles is intended, through an internal pooling of risks, to give each mutual, within its district, underwriting capabilities equivalent to those enjoyedby a single companycoveringthe entire territory.It also limits the use of outside reinsuranceto what would be needed by such a company. In order to achievethis objective,the regionalmutualsare reinsured within a common frameworkset by general regulationsand not by individual reinsurance treaties. This agreement, which was designeda long time ago, is basedon a certainnumberof founding principles that have outlasted the adjustments made to it over time. 2 reinsuranceexclusivelywith Groupama Assurances Mutuelles; ● the reinsurance conditions laid down by the agreement are ● developed by consultative bodies whose members are from Groupama Assurances Mutuelles and all the mutuals. These conditions apply to all the regionalmutuals; shared future among the mutuals and their internal reinsurer: all ● risks without exception are subject to outward reinsurance particularly as quota share outward reinsurance, which enables Groupama Assurances Mutuelles to participate in the business growth of the mutuals, including in those divisions where reinsuranceis not technicallyindispensable(health insurance,for example); in consideration, Groupama Assurances Mutuelles automatically provides the mutuals with reinsurance when they embark on new, less well-known ventures (multi-risk crop insurance, long-term care insurance, etc.) by calculating the insurance terms andconditions regardless; retrocession to the regional mutuals by Groupama Assurances ● Mutuelles of a portion of the general profit/loss from its inward reinsurance business, which reduces the need for reinsurance outside the Group and involves all the mutuals in balancing the outward reinsurance business with Groupama Assurances Mutuelles. Permanent principles and amendments (a) to the reinsurance agreement The permanent principles are:

1.3 The Groupama brand (a)

Security systems

The Groupama brand is solely owned by Groupama Assurances Mutuelles, which grants user licences to its regional mutuals and subsidiaries. Groupama Assurances Mutuelles can therefore guarantee that the brand is properly managed and provide protection forone of the Group’s critical assets. Agreement for a security and solidarity system (b) On 17 December2003, Groupama AssurancesMutuelles and the regional mutuals signed an agreement, amended by various additional clauses, for a security and solidarity system, aimed at guaranteeing the security and the financial equilibrium of all the regional mutuals and Groupama Assurances Mutuelles and to arrangefor solidarity. By virtue of its new role as central body of the network of agricultural mutual insurance and reinsurance companies or mutuals, Groupama Assurances Mutuelles has the legal responsibilityof ensuring the cohesion and smooth running of the network. It has administrative,technical and financial control over the organisation and management of the organisationswithin the network. It determines its strategic policies, issues any relevant instructions to this effect and oversees their successful implementation.It also takes any requisite measures to guarantee the solvencyof not only each organisationwithin the networkbut of the Group as a whole, and to ensure they comply with all their respective obligations. The agreement has been adapted to reflect these new circumstances. It is fundamentallya three-part agreement: INSTRUCTIONS FROM THE CENTRAL BODY The agreement defines the scope and system for issuing instructions,these being one of the methodsavailableto the central body for performing its role. AUDITS The agreementallows GroupamaAssurancesMutuellesto conduct audits to verify the current and future economic and financial balances of each regional mutual, compliance with regulatory requirements and with the reinsurance agreement. It may also, in certain conditions, conduct an audit following a loss or non-compliance withan instruction. Solvency 2 and the Group prudential notion ensuring the fungibility of equity within the Group, the agreement was adjusted by replacing the previously planned solidarity fund with a new solidarity mechanism better meeting the constraints set by Solvency 2. The new mechanismthus institutes a monthly guarantee between Groupama Insurance and the regional mutuals aiming to allow Groupama Insurance or the regional mutuals to respect their coverage ratio at alltimes and to cover any insufficiencyof cover. In addition, the duration of the agreement has been revised to better meet the objectives of long-term relationships between GroupamaAssurancesMutuellesand the regional mutuals through this agreement. FINANCIAL SOLIDARITY PLAN As part of the entry into force on 1 January 2016 of

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Universal Registration Document 2019 - GROUPAMA ASSURANCES MUTUELLES