Ámbitos específicos

a.s.r. has a risk governance framework which comprises the duties and the responsibilities of the risk management organization and the risk committee structure. The independent role of risk management and its responsibility as an assurance function are anchored throughout the organization. The objective of the risk committees is to manage the risk profile for a.s.r. group and its business lines.

2014 annual report 2014 consolidated financial statements ASR Nederland N.V.

Three lines of defence

The risk governance structure is based on the ‘three lines of defence’ model. The ‘three lines of defence’ model consists of three defence lines with different responsibilities with respect to the ownership of controlling risks.

• The first line is responsible for the identification and management of risk in daily business. The first line has day-to-day responsibility for operations (sales, pricing, underwriting, claims handling, etc.) and is primarily responsible for risk management. The first line is formed by the Executive Board, the management teams of the business lines and their employees.

• The second line challenges the first line and supports the first line to achieve its business objectives in accordance with the risk appetite. The second line has sufficient countervailing power to prevent risk concentrations and other forms of excessive risk taking. It is responsible for developing risk policies and for monitoring the compliance with these policies and the broader risk management framework in the first line. The second line of defence is formed at group level and includes both Group Risk Management and the Integrity department.

• The third line is responsible for providing independent assurance and oversees and assesses the functioning and the effectiveness of the first two lines of defence. The third line is formed by a.s.r.’s Internal Audit department.

The risk management organization and the risk committee structure, which are part of the risk governance, are described in more detail in the next section.

Group Risk Management Organization

Group Risk Management

The risk management organization is independently positioned within a.s.r. The Chief Risk Officer (CRO) is responsible for all risk management related activities and reports directly to the CFO. The CRO can report matters directly to the CEO at his own discretion and has a direct and independent reporting line to the Audit and Risk Committee, a sub-committee of the Supervisory Board.

Group Risk Management consists of the following sub-departments: • Enterprise Risk Management

• Financial Risk Management

Enterprise Risk Management

Enterprise Risk Management is responsible for the strategic risk and operational (including IT) risk management at a.s.r. The responsibilities with regard to strategic risk management include the development of risk policies, the annual update of the risk strategy (risk appetite), the monitoring of the non-financial risk profile and risk priorities of a.s.r., the execution of ORSA process, the validation

Enterprise Risk Management Financial Risk Management CFO CEO Group Risk Management

Audit & Risk Committee

2014 annual report 2014 consolidated financial statements ASR Nederland N.V.

of models and the update of our recovery plan. For the management of operational risks, a.s.r has a sound Management in Control system in place that contributes to long-term solidity of a.s.r. The quality of our Management in Control Framework is further enhanced by the analysis of operational losses. Enterprise Risk Management also monitors a.s.r.’s compliance with Solvency II requirements.

Financial Risk Management

Financial Risk Management (FRM) is responsible for the group actuarial function and the financial risk management function. FRM is responsible for the development of financial risk policies and the implementation of these policies at group and legal entity level. The department is also responsible for the methodology and the development of models used for calculating economic capital. FRM reports economic capital both at group and at legal entity level. FRM tests the reported market value and market risk and compares these against a.s.r.’s risk limits and risk budget.

As part of the actuarial function, FRM reviews the technical provisions, monitors the methodologies, assumptions and models used in these calculations and assesses the adequacy and quality of data used in the calculations. FRM regularly reports to the Financial Risk Committee, the Executive Board and the Audit and Risk Committee on the reliability and adequacy of the calculation of the technical provisions.

Moreover, the actuarial function monitors the profitability of new business and determines if risks related to the profitability of new products are sufficiently addressed in the product development process.

Risk committee structure

The objective of the risk committees is to manage the risk profile for a.s.r. group, its legal entities and its business lines in order to ensure that the risk profile remains within the risk appetite and the underlying risk tolerances and risk limits. When triggers are hit, a.s.r.’s risk committees can decide to increase the frequency of their meetings.

Product Approval & Review Committee a.s.r. Financial Risk Committee a.s.r. Risk Committee Central Investment Committee Business Risk Committees Executive Board a.s.r. Non- Financial Risk Committee Capital Liquidity and Funding Committee Model Validation Committee

a.s.r. Risk Committee

The a.s.r. Risk Committee is a sub-committee of the Executive Board and monitors a.s.r.’s overall risk profile on a quarterly basis. Every year, the Risk Committee approves the risk appetite statements, limits and targets for a.s.r. The a.s.r. Risk Committee also monitors the management of a.s.r.’s risk priorities’. a.s.r.’s Executive Board members all participate in the a.s.r. Risk Committee which is chaired by the CEO. The involvement of the Executive Board ensures that risk decisions are being addressed at the appropriate level within the organization. In addition to the Executive Board, the Chief Risk Officer, Director of Audit, Director of Integrity and Director Financial Markets are members of the Committee.

2014 annual report 2014 consolidated financial statements ASR Nederland N.V.

The a.s.r. Risk Committee receives information about risk exposures or other risk-related issues from the Financial Risk Committee and the Non-Financial Risk Committee. These committees have mandates to manage and control a.s.r.’s risk profile in line with the risk appetite statements, limits and targets.

Non-Financial Risk Committee

The Non-Financial Risk Committee (NFRC) is mandated by the Executive Board to approve upon non- financial risk policies. The NFRC monitors that non-financial risks are adequately managed, determines non-financial risk limits at group level and monitors that the risk profile stays within the agreed risk limits. If the risk profile exceeds the limits, the NFRC takes mitigating actions. The NFRC reports to the a.s.r. Risk Committee. The Chairman of the NFRC is the COO of the SME insurance market (who is also a member of the Executive Board) and members of the Committee include Managing Directors of P&C, Health, Disability, Travel, Pensions, ICT and Directors of Audit and Integrity and the Head of Enterprise Risk Management.

Financial Risk Committee

The Financial Risk Committee (FRC) has a mandate from the Executive Board to decide on financial risk policies. The FRC manages and controls financial risks (market, insurance (life and non-life) and counterparty default risk) and defines financial risk limits at group level. The FRC also monitors whether the risk profile stays within the risk limits. If the risk profile exceeds these limits, the FRC takes mitigating actions. The FRC reports to the a.s.r. Risk Committee. The Chairman of the FRC is the CFO. Members of the Committee include the Chief Risk Officer, Directors of Financial Markets, Audit, Integrity, Finance and Real Estate. The FRC is supported by the Capital, Liquidity & Funding Committee (CLFC).

Capital, Liquidity & Funding Committee

The Capital, Liquidity and Funding Committee (CLFC) is a subcommittee of the FRC. As such, the CLFC prepares and assesses the technical analysis of capital, liquidity and funding positions, rating policy, rating model reporting, and treasury activities. The Chairman of the CLFC is the Director of Financial Markets; other members of this sub-committee are representatives of various key financial and risk departments.

Business Risk Committees

The business lines manage and control their risk profile through the Business Risk Committees (BRC). The BRC’s monitor that the risk profile of the business line stays within the risk appetite, limits and targets, as formulated by the Executive Board. The BRC reports to the FRC and the NFRC. The Chairman of the BRC is the Managing Director of the business line and its members include key officers of the business line, Compliance and Audit.

Central Investment Committee

In addition to the risk committee structure, the Central Investment Committee (CIC) monitors tactical decisions and the execution of the investment policy. It takes investment decisions within the boundaries of the strategic asset allocation as agreed upon in the FRC. The CIC bears particular responsibility for investment decisions exceeding the mandate of the investment department. The CIC is chaired by the COO of the Retail insurance market (member of the Executive Board).

Model Validation Committee

The model validation committee (MVC) is responsible for the execution and update of our model validation policy and for the approval of existing or new validated models before taken into use. The model validation committee receives all required information for the validation of models (for instance model documentation and validation reports), which information is being prepared by the validation board that assures the quality of the validation process. The chairman of the MVC is the Chief Risk Officer. Members of the MVC are the Director Financial Markets, the Director Finance, the head of Financial Risk Management, the head of Investor Relations & Rating, the head of Fixed Income & Treasury, the Manager Treasury and representatives of the actuarial function.

Product Approval Committtee

The Product Approval Committee (PARP) is responsible for the decision-making process around the introduction of new products and adjustments in existing products.

The Director Marketing is the chairman of the PARP. Other members of the PARP Board are the Directors of all business lines, the Chief Risk Officer and the Director Integrity. Group Risk Management and the Compliance function have the right of veto in the PARP.

2014 annual report 2014 consolidated financial statements ASR Nederland N.V.