8.2 Organizational structure

The organizational structure of risk management system is consistent in PZU Group's individual insurance companies and includes four competence levels:

The first three are:

  • Supervisory Board, which supervises the risk management process and assesses its adequacy and effectiveness as part of its decision-making powers defined in the given company’s Articles of Association and the Supervisory Board rules and regulations;
  • Management Board, which organizes the risk management system and ensures its functionality through approving the strategy and policies and defining the risk appetite, the risk profile and tolerance for individual categories of risk;
  • Committees, which make decisions on reducing individual risks to a level determined by the risk appetite. The Committees implement the procedures and methodologies for mitigating the individual risks and accept individual risk limits. Risk Committee of PZU Group, established in 2016, provides support (of both supervisory boards and management boards of its subsidiaries) in the implementation of effective system of risk management, coherent to the entire PZU Group. The aim of the activity of PZU Group’s Risk Committee is to coordinate operations and supervise systems and processes of risk management which occur in PZU Group.

The fourth competence level relates to operational actions and is divided between the three lines of defense:

  • first line of defense – ongoing risk management at the business unit and organizational unit level and decision-making as part of the risk management process;
  • second line of defense – denotes risk management by specialized units responsible for risk identification, monitoring and reporting, as well as controlling limits;
  • third line of defense – comprises internal audit, which conducts independent audits of the elements of the risk management system, as well as control activities embedded in the activity.

In the risk management process at Alior Bank, Management Board and Supervisory Board of Alior Bank, as well as Assets and Liabilities Management Committee play an active role.

The Supervisory Board of Alior Bank supervises the risk management process and establishes an appropriate strategy each year. The Supervisory Board of Alior Bank is responsible for accepting policy and guidelines related to risk management and determining detailed limits for reduction of Alior Bank risk, as well as providing a proper mechanism for their control.

The Assets and Liabilities Management Committee exercises daily control over market risk management, including liquidity risk, accepts limits of operations on money and capital markets. It makes all decisions provided that they have not been previously qualified as exclusive competence of Alior Bank Management Board or Supervisory Board.

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