GROUPAMA / 2019 Universal Registration Document

3 CORPORATE GOVERNANCE AND INTERNAL CONTROL Internal control procedures

The internal control proceduresfor financial reporting are specified in chapter 6 of this UniversalRegistration Document. 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 Assurances Mutuelles. These exchanges ensure, in particular, that the Company’s strategicguidelines conform to 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 central body, Groupama Assurances Mutuelles is responsible for defining the Group’s investment strategy. The structuring framework of the management measures related to Asset/Liability Management and investment operations (general organisationand risk managementmeasures) is formalisedas part of the policy of the Group and GroupamaAssurancesMutuellesfor Asset/LiabilityManagement and investment risk, approved by the Groupama Assurances Mutuelles Board of Directors on 27 May 2015. The Group Investment Department, within the Group Financial Department,is in charge of defining the Group investmentstrategy and relies on, where appropriate,the expertiseof the variousGroup entities or Groupama Assurances Mutuelles departments: Groupama Asset Management, Groupama Immobilier and ● outside Managersfor marketanalyses; the financial and actuarial Departmentsof the various entities for ● information aboutthe liabilities of each entity. The major steps of the Group processfor analysingassets/liabilities and definingthe investmentstrategyspecifiedbeloware adaptedto the level of each entity on the basis of their objectivesand their own governance. The investment strategy is thus based on asset/liability analyses performedaccordingto the issuesof each companyor portfolioand on expert analyses,taking into account the margins of prudencein view of the ALM conclusions (1) . These analysesmake it possible to determine: the major arbitrage transactions to be considered in the ● portfolios; the investmentguidelines bymajor asset class; ● the coveragerequirements; ● the recommendations on the liability policies of the entities ● (underwriting policy in particular). On the basis of this work, the Group InvestmentDepartmentthen formalises the Group investment strategy defining the following elements: the strategic allocation at the Group level and on the main ● portfolios(stock); cash flow projectionsand areas of allocationon these flows; ● changes in strategies byasset class; ●

policies specific to derivatives; ● investments on new asset 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 complieswith the Group risk limits. After this complianceverification is performed, the Group investment strategy isvalidatedby: the Group Executive Committee; ● the Group Audit andRisk Management Committee; ● the Groupama Assurances Mutuelles Boardof Directors. ● After the Group investment strategy is validated, the Investment Department deploys this strategy operationally at the level of: each French subsidiary; ● each internationalsubsidiary; ● certain contractual or regulatory administrative districts (for ● French subsidiaries). In the GroupamaAssurancesMutuellessubsidiaries,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 investmentstrategy. 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 3.4.3.1 Committee (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, particularlyby setting the limits of major risks and determiningthe methodsto be usedto managerisks, to review and monitor the managementof major Group risks and to examine the work of the Group Insurance, Financial and Operational Risk Committees. These specialist committeescover all risks with a systematicfocus on major Group risks. They ensure continuity of action from the Group Risk ManagementCommitteeto which they report up 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 tothese committees. RISK GOVERNANCE 3.4.3

Asset and Liability Management. (1)

62 Universal Registration Document 2019 - GROUPAMA ASSURANCES MUTUELLES