UNIVERSAL REGISTRATION DOCUMENT 2023

8 ADDITIONAL INFORMATION Regulatory environment

The obligations incumbent on distributors, including insurance companies, relate to the following aspects: all types of products (non ‑ life and life) excluding those covering major risks, with provisions common to non ‑ life and life insurance and provisions specific to life insurance (insurance investment products); ❯ all types of customers (individuals, professionals, companies, and local authorities, excluding major risks); ❯ all marketing methods (face ‑ to ‑ face, home, and distance selling, including Internet and comparison tools). ❯ implementation of the duty to advise and pre ‑ contractual information to be provided to the customer; ❯ product governance and monitoring; ❯ the compensation of distribution networks, as the network compensation policy must not run counter to their obligation to act in the best interests of customers and to make a recommendation appropriate for the needs and expectations of customers; ❯ training of insurance distributors; ❯ prevention and management of conflicts of interest, for insurance investment products only, which consists in taking all reasonable measures to detect and prevent conflict of interest situations from adversely affecting the interests of customers. ❯ The IDD review, which has been delayed, has been announced for 2024 or even 2025. The EU authorities are already paying particular attention to certain issues, such as the digitalisation of sales processes, product governance and certain network remuneration practices. In May 2023, the European Commission released its retail investment strategy (RIS), aimed at strengthening the protection of savers and preserving the objective nature of advice for savings products (insurance and financial). This proposal for a cross ‑ sector directive is currently being debated in the European Parliament and is the subject of lobbying given the sensitivity of certain topics addressed (distributors’ commission, benchmark, value for money, etc.).

8.3.2 Pillar 2 defines qualitative risk management objectives and supplements Pillar 1. It enables the supervisory authority to assess the Company’s governance system. If there are proven deficiencies in this area, or if certain risks are improperly taken into account or not at all, the supervisor has the option of requiring add ‑ on capital relative to the SCR. Pillar 2 leads companies to implement more efficient risk management through, in particular, the definition of a risk policy, mapping of processes, risks, and controls, a permanent control plan, and specific governance with effective management, composed of at least two effective Managers, and a Manager for each of the four key functions (risk management, compliance verification, internal audit, and actuarial). the SCR (Solvency Capital Requirement), which represents the capital requirement. Determination of the SCR requires calculating the impact on own funds at the end of the year of a market, subscription, counterparty default, or operational event occurring once every 200 years. All potentially significant and reasonably quantifiable risks must be taken into account in the capital requirement since all are likely to affect the solvency of the organisation. The SCR can be calculated using a standard formula calibrated uniformly across the European market. The standard formula can be adjusted using undertaking ‑ specific parameters (USP) with the authorisation of the supervisor. Lastly, the SCR can also be calculated using an internal model developed by the insurer with the authorisation of the supervisor. ❯ All countries in which the Group carries out insurance businesses have regulations in place to protect policyholders, as insurance is a complex service to understand. At the EU level, the distribution of insurance policies is now regulated by the Insurance Distribution Directive (IDD) of 20 January 2016, transposed in France by way of order and decree in Book V of its Insurance Code, and supplemented by level 2 implementing texts (Commission Implementing Regulation on the duty to advise in life insurance, the standardised insurance product information document (IPID), conflicts of interest, and product governance) and level 3 implementing texts (FAQ of the EIOPA and the European Commission) as well as the recommendations of the ACPR. The aim of these texts is to strengthen the protection of insurance consumers and to standardise the rules applicable to all insurance distributors (insurance intermediaries and salespeople of insurance companies). Their scope concerns: all insurance networks (brokers, general agents, insurance agents, agents of insurance intermediaries, and sales staff of insurance companies); ❯ DISTRIBUTION OF INSURANCE

8.3.3

REGULATORY FRAMEWORK FOR PERSONAL DATA PROTECTION

The General Data Protection Regulation (GDPR) was transposed in France by law 2018 ‑ 493 on personal data protection, which entered into force on 25 May 2018, and by various implementing measures. It provides a regulatory framework for the protection of the personal data of individuals established in the territory of the European Union. It therefore applies to any organisation, whether established in EU territory or not, that accesses, uses, or transfers personal data of EU nationals. This applies to all insurance and service companies of the Group directly dealing with EU nationals.

378

Universal Registration Document 2023 GROUPAMA ASSURANCES MUTUELLES