SUPERVISORY*BOARD* BOARD*OF*EXECUTIVES ACCOUNTANT* LABELS/ACTIVITIES

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2 PERSONALIA** SUPERVISORY*BOARD* Mr.*A.*Engelsman*(voorzitter)*LLM# Mr.*G.*X.*Hollaar*LLM * BOARD*OF*EXECUTIVES Mr.*B.J.*Posthumus** Mr.*S.*Zijlstra*LLM * ACCOUNTANT* Deloitte*Accountants*B.V.,** Mr.*C.J.*de*Witt*CPA* * LABELS/ACTIVITIES Anker*Crew*Insurance** ZeeNRisico*1996** Anker*Rechtsbijstand** Anker*Verzuim* * Paterswoldseweg*812** 9728*BM** * P.O.*BOX*8002* 9702*KA** * +31*(0)50*520*99*99** info@anker.nl**

3 Anker Verzekeringen n.v. Annual Report 2013

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5 Content Annual Report 5 Anker Verzekeringen n.v. 7 Supervisory Board s Report 8 Management s Report 11 General Explanation 25 Licensing 26 Results 27 Financial Position 28 Fiscal Position 29 Financial Statement Balance per December 31, Profit- and Loss Account Cash Flow statement Foundations for Valuation 35 Explanation of Financial Statement 41 Explanation of Profit- and Loss Additional Information 56 Allocation Result 57 Auditor Declaration 59

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7 Annual Report 2013 Page 5

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9 Anker Verzekeringen n.v. FOREWORD Anker looks back on 2013 positively. Under challenging circumstances we have successfully strengthened our foundation and realized growth. CHALLENGING CIRCUMSTANCES The financial world is at the height of a transition process. Insurers are searching for and working on a new balance; a balance in which customer interest, economic interest, entrepreneurship and oversight support and strengthen each other; a balance that for the time being has a forced and controlled foundation but that will be increasingly based on mutual trust and bonds. Despite the cautious economic recovery our clients still suffer from the poor economic climate. There is less cargo between continents than expected. The crisis means less money for the business and private end-client and thus puts pressure on the profitability and continuity of the intermediary company. ESTABLISH AND GROW Anker has put an intensive year behind them. (Changing) laws and regulations demand much attention, but also implementation and improvement require the highest priority. In addition and simultaneously, Anker remains strongly committed to the growth of clients and partners. These efforts have lead to building an increasingly stronger foundation forming a stable base on which Anker can grow. By becoming stronger and growing as an organization, the financial basis is secure and controlled growth scenarios are realized. We thank our clients and partners for their trust in Anker. We would also like to thank our colleagues in and Amsterdam, the Works Board and the Supervisory Board for their dedication and the pleasurable and constructive cooperation. Bert Posthumus and Sjoerd Zijlstra Page 7

10 Report from the Supervisory Board Anker puts much importance on a dedicated, active and diversified Supervisory Board. The current construction was chosen for the combination of entrepreneurship, market and insurance expertise, measured drive for innovation, and future-oriented thinking and acting. With this, Anker guides towards a strong supervisory framework with space for reflection, knowledge and sparring. GENERAL Looking back at 2013 the Supervisory Board has determined that a strong positive result was achieved and the solvability position was increased. The solvability of Anker meets its own demands and the demands of the supervisory body, De Nederlandsche Bank. ANNUAL FINANCIAL STATEMENT The 2013 Financial Statement was prepared under the responsibility of the management of Anker Verzekeringen n.v. Deloitte Accountants audited the 2013 Financial Statement and verified it in the Auditor s Report. The financial statements, the Auditor's Report and the Actuarial Report were discussed in the Supervisory Board meeting on May 8, 2014 with the management, the auditor and the actuary. The Supervisory Board recommends that the General Meeting for the financial statements of 2013 be adopted without change. MEETINGS In 2013, the Supervisory Board met three times with the management in consultation, of which two times regular. Additionally, the management has regular periodic consultation with the Chairman of the Board. In addition to these meetings, there has been frequent contact during 2013 with the full board and its individual members, and between the individual auditors. The regular meetings are held according to a fixed schedule. Recurring topics include but are not limited to (market) developments, collaboration, governance, risk policy, supervision issues, the results of internal risk management, control and monitoring systems, and of course, solvency and liquidity, financial reporting, and premium and claims developments. Specific attention is paid to the Insurance Code, Solvency II and the remuneration and capital policies. During the meetings, the Board is regularly consulted by the compliance officer, the risk manager, and the manager of Finance & Control: among others about changes in regulatory requirements, risk related issues, and financial and economic developments. The Board has no formal individual committees, such as an audit or risk committee. This means that the Board as a whole fulfills these tasks. ACTUARY APPOINTMENT The Supervisory Board appointed Actwell BV in Amersfoort as the actuary for the year Actwell BV carries out actuarial studies for the technical planning for WGA-Eigen Risicodragerschap (WGA ER) insurance and provides an actuarial statement. Page 8

11 AUDITORS APPOINTMENT In 2012 the Supervisory Board discussed and evaluated the role of the external auditor. It was at that time decided to appoint Deloitte Accountants BV for the year 2013 as external auditor of Anker Verzekeringen N.V. COMPLIANCE The Compliance Report 2012 as well as the Incident Report of 2012 has been discussed with the Supervisory Board. The members of the Board and Management have both participated in the Continuing Education program by the Association of Insurers. They are participating in a follow-up program for Continuing Education at Nyenrode Business University for the period Mr. Hollaar was tested by the De Nederlandsche Bank and was given subsequent approval by the Board. COMPOSITION OF THE SUPERVISORY BOARD By the end of 2013, the Supervisory Board of Anker Verzekeringen n.v. consisted of Mr. A. Engelsman (Chairman) and Mr. G.X. Hollaar (Secretary). Mr. Hollaar succeeded Mr. T.C.R. Tammes on March 15, As of September 11, 2013 Drs. R.P.A. Leander RA is no longer a part of the Council. The procedure to fill the vacancy has been put in motion. It is expected that it will be filled by Spring The positions and composition of the Board are described in the Supervisory Board regulations. COMPOSITION EXECUTIVE BOARD In 2013, the Executive Board of Anker Verzekeringen n.v. consists of Mr B. J. Posthumus and Mr. S. Zijlstra. REMUNERATION POLICY Within the framework of business integrity, the remuneration policy is periodically reviewed. In 2013 the remuneration policy was reviewed and revised where appropriate. In December, the Supervisory Board was in agreement with the remuneration policy proposal and this was submitted to the Employee Council. The most important change in the policy is the complete abolition of variable pay. Periodically (parts of) the pay structure is compared to other financial companies of similar size and complexity. In December a benchmark study was conducted over the remuneration for the members of the Board. The results of this study will be discussed in the first regular meeting of DISCHARGE The Supervisory Board proposed during the Annual General Meeting that Management grant discharge to the Supervisory Board in respect of its policy. Page 9

12 FINAL WORD Anker Verzekeringen n.v. had strong positive financial results in This result is added to its net equity through which its solvency position is brought to a higher level. This stable starting position is a precondition for the continuity and the further development of the company. The Supervisory Board expresses its gratitude and appreciation to the management and the employees of Anker Verzekeringen n.v. for the implemented policies, the efforts made and the results achieved in 2013, as well as for the activities aimed at the further development of Anker Verzekeringen n.v. Finally the Board thanks Mr. Leander for his commitment and contribution., May 16, 8, The Supervisory Board Albert Engelsman and Guido Hollaar Page 10

13 Management Report GENERAL The premiums in 2013 remained virtually the same as The net equity strongly increased compared to The capital also increased compared to 2012, as well as the solvency position. For Anker Verzekeringen n.v. the financial result after tax increased from EUR in 2013 to EUR in This increase is due to more efficient operations, a greater focus on the crew insurance, and a solid reinsurance policy. The investments have decreased from EUR shares in 2012 to EUR shares in The investments are almost completely placed in short-term deposits. The revenue from investments decreased from EUR in 2012 to EUR in The lower investment return is mainly caused by the low interest rates shares amounted to the legally required solvency EUR The solvency of Anker Verzekeringen n.v shares amount to 217% of the required solvency. In this way Anker Verzekeringen n.v. meets the requirements of the supervisory body, De Nederlandsche Bank. PREMIUM AND DAMAGE DEVELOPMENTS Under the trade names Anker Crew Insurance and Zee-Risico 1996, Anker Verzekeringen n.v. insures crews on board seagoing vessels against the risks related to medical costs, illness, accident and death. In 2013, the premium within this portfolio of EUR increased to a total premium of EUR The paid commission EUR in 2013 increased to a total of EUR The relatively low dollar and the fluctuations in the euro/dollar ratio in 2013 had a burdensome effect on the result within the portfolio of Anker Crew Insurance. The injury benefits in relation to 2012 have increased by EUR In total, in the year 2013 EUR was paid out to damages. Anker Verzekeringen n.v. draws to a modest extent on Sickness and Absence Insurance that by proxy its sister company Anker Verzuim Volmacht b.v. is signed. The premium income from this activity amounts to EUR in This amount is accounted for in the total premium income of the label Anker Crew Insurance. Under the trade name Anker Rechtsbijstand, Anker Verzekeringen n.v. insures legal aid in disputes, mainly for individuals but also for small and medium-sized enterprises. Anker Verzekeringen n.v. outsources administration of legal aid to Anker Rechtshelp b.v. In relation to 2012 the booked premium decreased by EUR from EUR to EUR This decrease at the end of 2012 was due to the termination of a number of collective contracts in the inland waterway sector. The number of legal opinions being provided and the number of reported cases continue to increase as a result of further juridicisation of Dutch society in combination with the continuing crisis. However, an increasing number of cases are handled internally, and the complexity of outsourced affairs is greatly decreased with the disappearance of the collective inland waterway transport contracts. Through these developments the external cost of claims in the legal aid portfolio, expressed as a percentage of the premium income, fell from EUR (39%) in 2012 to EUR (19%) in Page 11

14 RISK MANAGEMENT PROCESS MANAGEMENT Since day one, the Process Management System formed the foundation of risk management within Anker. By managing, securing and (continuously) developing the business processes Anker created a clear and guiding framework with integrity and controlled business of operation. The process management system offers support of the: focus on clients interests;; improve customer centricity; work on continuous improvement; meet the requirements of duty of care; work on transparency; guarantee of expertise and reliability. Internally Anker works with underwriting and claims directives, which are examined in reality and actuality. The staff in the underwriting and claims department has frequent contact with customers and partners and is trained to identify risks. The risk management function is placed with the risk manager. The risk manager monitors together with the product and process manager and compliance officer risks within the insurer. In cooperation and consultation with Management and the Risk Committee, the risk manager prepares, evaluates, and (further) develops risk policies. At the moment a risk issue arises, whether or not as a result of formulated triggers, the risk manager discusses this issue with the Risk Committee. After analysis of the issue, the committee makes a proposal, which then goes to Management. In consultation with the Board, they then make a decision. The risk manager informs the Supervisory Board periodically about developments in the field of risk management. Not only risk policy and the risk appetite of the company are addressed, but also current risk issues, immersive developments and the recurring annual risk analysis according to the FIRMmodel. The internal auditor, together with the compliance officer, monitors the functioning of the process management system in general and the risk management system in particular. UNDERWRITING RISK The portfolios of Anker Verzekeringen n.v. consist mainly of crew insurance and legal aid insurance. These products are under their own management and are primarily focused on the maritime sector (crew insurance) or in regional oriented areas (legal aid). Distribution takes place via the private distribution channel or via a select network of collaborating partners. The underwriting risk is limited by strict and clear guidelines and procedures in the area of acceptance and claims reservation. A leading reinsurer with good credit and strong rating handles reinsurance. In principle, a long-term relationship with the reinsurer is maintained. REINSURANCE AND CATASTROPHE RISKS Anker has for its maritime activities stop-loss reinsurance. With this all claims to Anker Crew Insurance and Sea Risk 1996 are for medical costs, absenteeism, permanent incapacity and death above EUR reinsurance in which the catastrophe risks are covered. A leading reinsurer with good credit and a strong rating arranges the reinsurance. The reinsurance program is periodically examined to see if is in line with the underwriting risks. Page 12

15 INVESTMENT RISK Anker themselves allows an external consultant to supervise its investments. Monthly the developments within the investment portfolio are closely followed, reviewed and evaluated by the investment committee. There are agreements made in respect to the strategic and tactical allocation of the portfolio with the aim to achieve optimal results from the investments. There is a conservative investment policy. In last few years there was investment in virtually only short-term deposits. COUNTERPARTY RISK Anker puts its liquid funds only in national systemic banks and employs the widest possible distribution of these resources. CREDIT RISK Credit risk is reported when losses have been suffered that are caused by insolvency of borrowers or other third parties. With an adequate debtor policy and an active monitoring of the current account relationship with authorized agents and intermediaries, the risk of a rise in accounts receivable balance are minimized. The credit risk that is linked to activities such as investment and reinsurance is monitored on the basis of general and specific risk limits. FOREIGN-EXCHANGE RISK Exchange rate fluctuations can (negatively) influence Anker s result. Given the international nature of Anker Crew Insurance there is currency risk on a portion of the portfolios and the invested capital. Therefore the securities committee periodically discusses the position of foreign currency, and decisions are made about the sale of foreign currency when there are no insurance liabilities in return. INFORMATION AND DATA Anker features a comprehensive back-up system. The back-up is both internal as well as saved in an alternate location. Periodically 'backup and restore' tests take place to test the security and continuity measures. In addition the above Anker works with a 'Business Continuity Plan' in which the most common risks are identified. Also the corresponding continuity measures are described here. This concerns both the measures taken in ICT as well as the facilities. Anker has been working since 2012 on the implementation of a program for structural and systematic improvement of data. In the coming years Anker wants to broaden this approach and upgrade during the next planned cleanup and further enrich the data tools to develop more focused, deeper and more efficient access to this data. PRODUCT DEVELOPMENT In line with the Code of Conduct for Insurers and the Governance Principles (Insurers Code) Anker designed the Product Approval Process in To summarize: it is explained here how you as an insurer can make certain that your current and new products (continue to) meet the wishes of customers. In 2013 the 'PAP' was extended and brought to the attention and (re)introduced to the various parties concerned among. The identified triggers and attention moments use a process that increases the 'awareness' and thus increases the rate of application. Page 13

16 SOLVENCY II The directives such as shaped from Solvency II shall be applied to the fullest extent possible to the Management of Anker. The year 2013 was marked by further operationalization of the Solvency II foundation. Further details will be given in 2014 to the reporting requirements of 'Pilar 3 '. (GOOD) GOVERNANCE Anker has a visible societal function, in particular within the maritime sector. The importance of customers and cooperating partners in combination with continuity driven thinking from both the history and from the widespread internal culture have always prevailed over the short term (profit driven) thinking. Board members, Works council members and managers are convinced that a wellfunctioning governance structure is necessary for an ethical and economically viable operation of an insurance company. GOVERNANCE PRINCIPLES 'Good Governance' i.e. good board of governors and monitoring is an important theme in the insurance industry. In short, the responsibility for Good Governance deals with integrity, professionalism and transparent governance in which continuity and balanced evaluation of interest takes a central place. In addition to the Code of Conduct of Insurers, the Union of Insurers in the context of Good Governance has drafted the Governance Principles (Code of Insurers). This self-regulation includes principles in respect of the composition, the relationships, and the functions of the Board of Directors and the Supervisory Board, risk management and remuneration. The Governance principles apply to all insurance businesses of Anker. Application The principles of the Code of Insurers are equal for all insurers, but in the application shall take into account the nature and size of the enterprise and the so-called 'apply or explain' principle. Below and on the website of Anker ( is a current view of the way in which Anker complies and applies the recommendations of the Code Insurers. The explanation made use of the term Executive Board in place of the Board of Directors. 1. Supervisory Board 1.1 Composition and Expertise The Supervisory Board is designed so that it fulfills its task. Complementarity, collegial governance, independence and diversity are a precondition for a good functioning Supervisory Board. Anker applies this principle. The Supervisory Board is composed of independent members who in the fulfillment of their tasks are guided by the interests of the company as a whole. The members of the Supervisory Board shall be selected and nominated on the basis of an established profile with required background, knowledge and experience, skills, diversity and independence that are priority. The principle has been further developed in the Rules of Procedure of the Supervisory Board The Supervisory Board has a sufficient number of members in which to function, in the committees of the board, well able to exercise. The appropriate number of members is dependent on the nature, scale and complexity of the insurer. Anker applies this principle. The Supervisory Board currently has three members. Because of the current nature, scale and complexity of the organization this is considered as an appropriate number of members. Page 14

17 Note: at the time of writing of this report there is a vacancy within the Board. This vacancy is expected to be filled by Spring Members of the Supervisory Board have thorough knowledge of the societal functions of the insurer and of the interests of all parties concerned with the insurer. The Supervisory Board makes a balanced consideration of the interests of the insurer and all involved parties such as its customers, shareholders and employees. Anker applies this principle. The Board not only has broad market and/or insurance knowledge but also extensive and relevant societal experience. They have a thorough knowledge of the societal function of Anker and of the interests of the parties concerned to Anker. These requirements are also expressly taken into account in the selection of the Board Each member of the Supervisory Board is in a position to evaluate the main features of the overall policy of the insurer and form a balanced and independent appraisal of the basic risks which are incurred. Furthermore, each member of the Supervisory Board has specific expertise that is necessary for the function of his/her role within the Supervisory Board. To that end, as soon as a vacancy arises in the Supervisory Board, an individual profile is written for the new member of the Supervisory Board that fits within the profile of the entire council. Anker applies this principle. Anker has a Supervisory Board (member) profile. This profile of the Supervisory Board is used to fill vacancies, where a match with the individual profile of the candidate is searched. Reference is hereby made to the Rules of the Supervisory Board In filling the vacancy of Chairman of the Supervisory Board attention is given by the insurer to matching the desired expertise and experience with the financial sector and knowledge of the socioeconomic and political culture and the social environment of the main markets in which the insurer operates. Anker applies this principle. At the time that the office of Chairman is vacant, an individual profile is drawn up on the basis of the Supervisory Board. In this profile expertise, experience will be grounded in the financial sector, familiarity with the socio-economic and political culture, and the social environment of the main markets in which the insurer operates Each member of the Supervisory Board, the Chairman in particular, is sufficiently available and accessible in their role within the Supervisory Board and the committees of the Board in which they fulfill. Anker applies this principle. The members and, in particular, the chairman of the Supervisory Board are easily accessible and available when/if necessary. The availability of the adequate task fulfillment of the president and the members of the Supervisory Board is reflected in practice by, among other things, their attendance of all Board members at the periodic regular meetings and ad hoc meetings Each member of the Supervisory Board will receive appropriate compensation in relation to the time consumption of the work. This fee is not dependent on the results of the insurer. Anker applies this principle. The members of the Supervisory Board receive only a fixed fee that is independent of the results of Anker. The remuneration for the Supervisory Board members also conforms to the market for an insurer comparable to Anker except in relation to the time taken The Chairman of the Supervisory Board shall ensure that there is a continuing education program for the members of the Supervisory Board, the aim of which is to enhance the expertise of the Board and where necessary to broaden. The education refers to relevant developments within the insurer and the financial sector, on corporate governance in general and that of the financial sector in particular, the duty to have regard for the customer, integrity, risk management, financial reporting and auditing. Every member of the Supervisory Board shall take part in the program and shall meet the requirements of continuing education. Anker applies this principle. In 2013 the members of the Supervisory Board have participated in a program of continuing education for the Union of Insurers. Page 15

18 In addition, in the regular meetings extensive attention is paid to include relevant market developments, developments within the financial sector, corporate governance, compliance, risk management, financial reporting and audit The assessment of the effectiveness of continuing education is part of the annual evaluation of the Supervisory Board. Anker applies this principle. The effectiveness of continuing education has been a part of the annual evaluation carried out in December 2013 of the Supervisory Board. The Board has found that the continuing education program is an effective experience and has increased and broadened the expertise of the Board on a variety themes In addition to the annual evaluation of their own functioning on the Supervisory Board, they are evaluated every three years by independent external counsel as well as the involvement of each member of the Supervisory Board, the culture within the Supervisory Board and the Board of Directors are part of the assessment. Anker applies this principle. They are outlined in the Rules of the Supervisory Board. The next evaluation by independent external counsel will be conducted in December Task and procedure In its supervisory role, the Supervisory Board pays special attention to the risk management of the insurer. A Risk Committee or similar committee that is appointed by the Supervisory Board from its ranks conducts any discussion about the risk management process. Anker applies this principle proportionally. In view of its size, the Supervisory Board has no individual Risk Committee but acts as a whole. Risk Management (financial and non-financial risks) is a regular agenda item in the regular meetings of the Council For the Risk Committee, as well as for the Audit Committee, specific competency and experience requirements are applied. For example, a number of members of the Risk Committee must have thorough knowledge of the financial and technical aspects of risk management or have the necessary experience for a thorough assessment of risks. A number of members of the audit committee must have thorough knowledge of financial reporting, internal control and auditing or have the necessary experience for a thorough monitoring of these subjects. Anker applies this principle. The relevant requirements are generally guaranteed in the profile of the members of the Supervisory Board and in the Rules of the Supervisory Board. In the Board, the specific skills and experience are available. In addition, the Council has the ability to turn to an external expert regarding specific topics. 2. Executive Board 2.1 Composition and Expertise The Executive Board is composed so that it can fully carry out its task. Complementarity, collegial governance and diversity are a precondition for optimal performance by the Executive Board. Anker applies this principle. The Board of Directors of Anker is designed so that it can carry out its task. The principle is, among other things, in particular guaranteed in the Board of Directors regulations Each member of the Executive Board has thorough knowledge of the financial sector in general and the insurance industry in particular. Each member has a sound knowledge of the societal functions of the insurer and of the interests of all parties concerned. In addition, each member of the Executive Board must have thorough knowledge of the main services of the overall policy of the insurer to assess and determine a balanced and independent assessment of risks that are incurred. Page 16

19 Anker applies this principle. Both executives have the knowledge required and have extensive experience in the financial and business services The Chairman of the Executive Board shall ensure the presence of a program of continuing education for the members of the Executive Board, the purpose of which is to maintain and where necessary to broaden the competencies of the members of the Executive Board. The continuing education in any case refers to relevant developments within the insurer and the financial sector, on corporate governance in general and that of the financial sector in particular, and their duty in regard to the customer, integrity, risk management, financial reporting and auditing. Anker applies this principle. The executives have in the period participated in a program of continuing education at the Union of Insurers. This program is specifically designed for the above purpose, which was developed by the Union of Insurers in cooperation with Nyenrode Business University Each member of the Executive Board shall take part in the program as provided for in and meets the requirements of continuing education. This is provided for the operation as a member of the Executive Board. The members of the Supervisory Board shall ensure that the members of the Executive Board may continue to meet the competence constitutes of the Nederlandsche insurer. Anker applies this principle. Refer to The executives have in the period participated in a program of continuing education at the Union of Insurers The insurer shall indicate each year in its annual report how to consolidate the principles and Anker applies this principle The Executive Board shall, in accordance with the Supervisory Board approve risk appetite, ensure a balance between the commercial interests of the insurer and risk taking. Anker applies this principle. The starting point for risk management is the extent with which Anker is prepared to accept risks within its daily operations is (see also and 4) Within the Executive Board the task is entrusted to one of the members of the Executive Board to prepare the terms of risk management decisions of the Executive Board. This member of the Executive Board is involved in the timely preparation of decisions for the insurer of material significance for the risk profile, especially where these decisions may result in a deviation from the approved risk appetite by the Supervisory Board. In the exercise of the risk management function the importance of financial stability and the impact that systemic risk may have on the risk profile of the institution is also paid attention to. Anker applies this principle proportionally. The nature and extent of Anker as an organization requires that the members of the Board of Directors are involved with all decision-making about assets results. In the implementation, the risk manager and Risk Committee support the Board of Directors. Within Anker a recurring annual risk analysis is used, which identifies the main risks, and is analyzed and reported on according to the risk analysis model of the Nederlandsche Bank (the FIRM-model) The member of the Executive Board to whom this task is appointed to prepare the decisionmaking policy within the Executive Board may combine his risk management function with focus on other areas, on the condition that he not perform individual commercial responsibilities and functions independent of commercial domain. Anker applies this principle proportionally. The nature and extent of Anker as an organization carries within it that the members of the Board of Directors are involved with all decision-making about asset results. Page 17

20 2.2 Task and Procedures Executive Board The Executive Board of the insurer shall contribute to ensure a balanced consideration of all interests of the parties involved to the insurer as its customers, shareholders and employees. This takes into account the continuity of the insurer, the social environment in which the insurer operates and laws and regulations and codes of the insurer. Anker applies this principle. In the overall operations and decision-making Anker acts in accordance with the interests of customers, employees, partners and other interested parties. There are regular formal and informal discussions held with the various stakeholders of Anker. Anker acts in accordance with the social environment in which it operates and of its applicable laws and regulations and codes The central partnerships with the customer is a core value for the continuity of the insurer. Referring principle 3.2.1, the Board shall ensure that the insurer treats its customers carefully at all times. The Executive Board shall ensure that its duty of care to its customers is embedded in the culture of the insurer. Anker applies this principle. The duty of care regarding the customer is anchored in the culture and is stated in the general code of conduct, which is applicable to all employees of Anker. During staff meetings, functions, and performance reviews this principle is a recurring subject The members of the Executive Board shall exercise their function carefully, expertly and with integrity in accordance with the applicable laws and regulations, codes and rules. Each member of the Executive Board draws a moral-ethical statement. In the explanatory memorandum to this Code an example statement is included. This statement is customized to each insurer within their own understanding. Anker applies this principle. The Board of Directors has signed the moral and ethical declaration and this statement is published on the website of Anker The Executive Board shall ensure that the declaration referred to in principle is translated into principles that are applied as a guideline to the entire staff of the insurer. Every new employee of the insurer when hired is specifically informed about the contents of these principles by referring to these principles in the employment contract and is required that these principles are adhered to. Anker applies this principle. These principles are included in the code of conduct and are further elaborated in the moral and ethical declaration. This code of conduct is in the employment contract of new hires and it is given when appointed. 3. Risk Management 3.1 The Executive Board, and within the Executive Board, primarily the Chairman of the Executive Board, is responsible for the establishment, implementation, monitoring, and where necessary, updating the overall risk management of the insurer. The risk is included in the proposal of the Executive Board at least annually for approval by the Supervisory Board. Any material changes to risk appetite will also be submitted for approval to the Supervisory Board. Anker applies this principle. The risk manager monitors together with the product and process manager and with the compliance officer risks within the insurer. In cooperation and agreement with the Board of Directors and the Risk Committee the risk manager bears responsibility for the preparation, evaluation, and (further) development of the risk policy. At the time a risk issue arises, whether or not in response to the formulated triggers, the risk manager explains this matter in the Risk Committee. After analysis of the issue, the Risk Committee sends a proposal to the Board of Directors in a follow-up meeting. In consultation with the Risk Committee, Management will make a subsequent decision. Page 18

21 The risk manager informs the Supervisory Board periodically about developments in the area of risk management. The risk management and the risk appetite of the company are then added to the agenda, and also current risk issues, immersive developments and the recurring annual risk analysis according to the FIRM-model. 3.2 The Supervisory Board supervises the risk policy pursued by the Executive Board. To this end, the Supervisory Board discusses the risk profile of the insurer and assesses at strategic level capital allocation and liquidity in line with the approved risk appetite. In exercising this supervisory role, the Supervisory Board is advised by the Risk Committee, which has been formed by the Supervisory Board. Anker administers this principle proportionally. Given its size, the Supervisory Board does not have a separate Risk Committee, but the entire Board serves as Risk Committee. The Supervisory Board is informed during the regular meetings about the developments in the field of risk management. Also refer to 4.1. With particular regard to subjects such as the solvency, liquidity, immersive developments and the recurring annual risk analysis conforming to the FIRM-model. 3.3 The Supervisory Board shall periodically assess at the strategic level of business activities in general within the risk appetite of the insurer. For this assessment the Executive Board shall provide relevant information to the Supervisory Board so that the latter is able to form a sound opinion. Anker applies this principle. Also refer to 4.2 and 4.3. The Supervisory Board is informed during the regular meetings about the developments in the area of risk management. In these discussions business activities are discussed and also the question of whether this is (still) connected to the risk appetite of Anker. 3.4 The Executive Board shall ensure that the risk is adequately arranged so that it is made aware in a timely manner of material risks so that the insurer can control these risks. Decisions that will be taken by the Board that are of significance in regard to assets are the risk profile, capital allocation and the liquidity requirement. Anker applies this principle. Anker has a practical and insightful risk management process in which tasks and responsibilities are clearly defined. Also refer to 4.1 and 5. The nature and extent of Anker as an organization requires that the members of the Board of Directors are concerned with all decision-making regarding assets consequences. 3.5 Each insurer has a Product Approval Process. The Executive Board shall be responsible for the establishment of the Product Approval Process and is responsible for its proper functioning. Products that go through the Product Approval Process within the insurer shall not be placed on the market, or distributed without careful assessment of the risks by the risk management function within the insurer and careful review of other relevant aspects, including the duty of care for the customer. The internal audit function checks, based on an annual risk analysis or plan, that the existence and operation of the processes are effective, and informs the Executive Board and the relevant (risk) committee of the Supervisory Board of the results. Anker applies this principle. Anker designed and established the Product Approval Process in In 2013 the 'PAP' was extended, brought to the attention of, and (re)introduced, to the various parties concerned. The annual report of the Product Approval Process is included in the audit planning. Page 19

22 4. Audit 4.1 The Executive Board shall be responsible for the systematic control of the management of the risks associated with the (company) activities of the insurer. Anker applies this principle. Anker has its risk management process set-up in the following way. Internally Anker works with underwriting and claims directives that are constantly reviewed for the reality and the actuality. The staff in the underwriting and claims department has frequent contact with customers, colleagues, and contracting parties and is trained to identify risks. The risk management function is placed with the risk manager. The risk manager monitors together with the product and process manager and compliance officer risks within the insurer. In cooperation and consultation with management and the risk committee, the risk manager prepares, evaluates, and (further) develops risk policies. At the moment a risk issue arises, whether or not as a result of formulated triggers, the risk manager should discuss this issue with the risk committee. After analysis of the issue, the committee makes a proposal, which then goes to management. In consultation with the Board, they then make a decision. Anker Verzekeringen n.v. uses a recurring annual risk analysis, where the main risks are identified, analyzed and reported according to the risk analysis model of DNB (the FIRM-model). On the basis of this analysis, if necessary, successive management measures can be taken. The risk manager informs the Supervisory Board periodically about developments in the field of risk management. Not only risk policy and the risk appetite of the company are addressed, but also current risk issues, immersive developments and the recurring annual risk analysis according to the FIRMmodel. The internal auditor, together with the compliance officer, monitors the functioning of the process management system in general and the risk management system in particular. The risk manager, actuary, and controller also have a vigilant roll. The external auditor and the Supervisory Board make the cornerstone of the risk management process. 4.2 Within the insurer is an internal audit function that is independently positioned. The head internal auditor reports to the Chairman of the Executive Board and has a reporting line to the Chairman of the Audit Committee. Anker applies this principle. Anker has drawn up a charter on key posts in which this principle is established. In view of the size of Anker this function is assigned to one employee. 4.3 The internal audit function has the task to assess whether the internal management measures in design, existence and in operation are effective. This assessment shall include the quality and effectiveness of the functioning of the governance, risk management and management processes within the insurer. The internal audit function reports the findings to the Executive Board and Audit Committee. Anker applies this principle proportionally. Regarding the size of company the Supervisory Board has no separate Audit Committee but the entire Board functions as audit committee. The annual audits are made available to the Board of Directors and the Supervisory Council. 4.4 The internal audit function, the external accountant, and the Risk or Audit Committee of the Supervisory Board periodically exchange information. In the context of this exchange of information the risk assessment and audit plan of the internal audit function and the external accountant is also subject to consultation. Anker applies this principle. There is regular consultation between the auditor and the accountant and the between the auditor and the Chairman of the Supervisory Board. Both the auditor and the external Page 20

23 accountant create an annual audit plan. The audit plan shall be discussed and adopted by the Board of Directors. 4.5 As part of the general audit of the financial statements, the external accountant details in his report to the Executive Board and the Supervisory Board their findings concerning the quality and effectiveness of the functioning of governance, risk management and management processes of the insurer. Anker applies this principle. Evaluation of risk management and governance is part of its mission. 4.6 The internal auditor takes the initiative with The Nederlandsche Bank and the external accountant at least annually at an early stage to discuss each other's risk analysis, findings and audit plan. Anker applies this principle proportionally. Anker has because of changing regulatory policy no fixed contact or periodic supervisory talks anymore with The Nederlandsche Bank since Risk assessment from The Nederlandsche Bank takes place via the compulsory and noncompulsory regular reporting. With regard to consultation with the external accountant, reference is made to principle 5.4. There is periodic discussion between the auditor and the external accountant. 5. Remuneration policy 5.1 Guiding principles The insurer performs a careful, controlled and sustainable remuneration policy that is in line with its strategy and risk appetite, objectives and values and taking into account the long-term interests of the insurer, the relevant international context, and the social support. The Supervisory Board and the Executive Board will observe this guiding principle in the performance of their duties with regard to the remuneration policy. Anker applies this principle. The vision and principles are clarified in writing in the remuneration policy of Anker. This remuneration was reviewed at the end of The main amendment was the abolition of the possibility of granting variable pay. 5.2 Governance The Supervisory Board is responsible for the implementation and evaluation of the remuneration in respect to the members of the Executive Board. In addition, the Supervisory Board approves the remuneration policy for senior management and oversees the implementation by the Executive. The Supervisory Board also approves the principles of the remuneration policy for other employees of the insurer. The remuneration policy of the insurer shall include the policy regarding the granting of retention, exit and welcome packages. Anker applies this principle. For example, in 2013 the Supervisory Board discussed the remuneration policy for the Board of Directors members. It was then decided in December 2013 to abolish variable pay to the Board of Directors retroactively applied to the whole of In addition, the Supervisory Board discussed in broader terms the principles of the remuneration policy of Anker. The Employee Council of Anker is now discussing the final remuneration policy draft of 2014 and following years The Supervisory Board annually discusses the highest variable incomes. The Supervisory Board shall oversee that the Executive Board ensures that the variable rewards within the insurer applies to the remuneration policy of the insurer and, in particular, whether it meets the principles mentioned in this paragraph. It also discusses the Supervisory Board material retention-, exit, and welcome packages and will ensure that they fit within the fixed remuneration of the insurer and are not excessive. Anker applies this principle to the extent applicable. Within Anker there is not a question of variable pay. Anker has no material retention, exit and welcome packages. Page 21

24 5.3 Director s Remuneration The total income of a member of the Executive Board is in reasonable proportion to the remuneration policy adopted by the insurer that the total income determined at the time is slightly below the median for comparable positions within and outside the financial sector, and where relevant international context is taken into account. Anker applies this principle. To determine the remuneration of the Board of Directors members is related to the compensation in comparable functions The compensation for dismissal of a member of the Executive Board shall be a maximum of one year of the fixed annual salary. If the maximum of one year's salary for a member of the Executive Board who is dismissed in the first term is manifestly unreasonable, then this member of the Executive Board will be eligible for severance pay not exceeding twice the annual salary. Anker applies this principle. It is outlined in the contract et al When awarding variable pay to a member of the Executive Board the long-term component shall be taken into account. The variable pay is partly dependent on profitability and/or continuity. The variable remuneration is partially and conditionally granted in shares and paid no earlier than three years. Anker applies this principle to the extent applicable. There is no variable remuneration granted to the Board of Directors Shares without financial compensation to a member of the Executive Board shall be granted and be maintained for periods of at least five years or until the end of the employment relationship if this period is shorter. If options are granted, they are not to be allocated at least the first three years after granted. Anker applies this principle. Anker knows from her remuneration policy no shares or share options will be granted to members of management or other employees. 5.4 Variable pay The granting of a variable pay is partly related to the long-term objectives of the insurer. Anker applies this principle to the extent applicable. Anker does not recognize variable pay Each insurer determines an appropriate ceiling with the insurer for the ratio of variable remuneration to fixed salary. For a member of the Executive Board, the variable pay per year up to 100% of the fixed income. Anker applies this principle. There is no variable remuneration granted to the Board of Directors Variable pay is based on the performance of the individual, business and that of the insurer as a whole on the basis of predefined assessable performance criteria. In addition to the financial performance criteria there are also non-financial performance criteria that are an important part of the individual assessment. In the remuneration policy of the insurer, the performance criteria will be fully externalized. Anker applies this principle in so far as applicable. Anker does not recognize variable pay. However there is work being done on an assessment system which among other things is based on performance criteria. Page 22