Annual Letter of Public Policies and Corporate Governance 2018

Transcription

1 Annual Letter of Public Policies and Corporate Governance 2018 Base year 2017

2 Summary General Identification... 2 Public Policies and Corporate Governance... 3 Board of Directors Statement:

3 General Identification In compliance with article 8, subsections I and VIII of Law , from June 30, 2016, the Board of Directors subscribes this Annual Letter of Public Policies and Corporate Governance ( Annual Letter ), regarding the fiscal year of CNPJ/MF No NIRE Headquarters: Setor de Autarquias Norte, Quadra 5, Bloco B, 3º andar, Brasília (DF) Type of Government Company: Subsidiary of mixed capital company Controlling Shareholder: Banco do Brasil S.A. Corporate Type: Joint-Stock Company Type of Capital: Open Capital Scope of Operation: National Operation Industry: Holding Company Director of Corporate Management and Investor Relations: Werner Romera Süffert Telephone: (11) ri@bbseg.com.br Independent Auditors: KPMG Auditores Independentes Responsible: Fernando Antonio Rodrigues Alfredo. Telephone: (11) falfredo@kpmg.com.br Administration Advisors subscribers of the Annual Letter Marcelo Augusto Dutra Labuto Chairman. CPF: Carlos Hamilton Vasconcelos Araújo Vice-Chairman. CPF: Jose Mauricio Pereira Coelho. CPF: Isabel da Silva Ramos. CPF: Adalberto Santos de Vasconcelos. CPF: Nerylson Lima da Silva. CPF: Arnaldo José Vollet. CPF: Directors Jose Mauricio Pereira Coelho CEO of BB Seguridade. CPF: Werner Romera Süffert Director of Corporate Management and Investor Relations of BB Seguridade. CPF: Antonio Rugero Guibo Director of Governance, Risks and Controls of BB Seguridade. CPF: Sérgio Augusto Kurovski Commercial and Products Director of BB Seguridade. CPF: Date of Disclosure: Wednesday, May 30,

4 Public Policies and Corporate Governance The aim of this Annual Letter is to explicit the liabilities of the attainment of public policies by BB Seguridade Participações S.A., with a clear definition of the assets to be used for this end, as well as the disclosure of relevant information, in particular the ones concerning developed activities, control structure, risk factors, economic and financial data, notes of the directors on performance, policies and practices of corporate governance and the description of the composition of the administration s pay, in accordance with subsections I, III and VIII of article 8 of Law No /2016. The aforementioned information is detailed as follows. 1 - Corporate Structure The Corporate structure of BB Seguridade Participações S.A., on , is represented as follows: 2 - Public Policies and the public interest underlying entrepreneurial activities The activity of BB Seguridade enables the practices of the functions of relevant collective interest set forth on article 2 of the By-Laws of Banco do Brasil S.A. BB Seguridade holding, Banco do Brasil, is an important agent of the economic and social development for Brazil, which seeks, through its corporate purpose, to boost the economy and growth of the country, acting in support to the public administration in the promotion of improvement in several sectors. BB businesses may be grouped in six segments: (i) Bank; (ii) Investments; (iii) Resources Management; (iv) Pension Insurances and Capitalization; (v) Payment Methods; and (vi) Other Segments. In this context, the public interest underlying the activities of BB Seguridade, in compliance with the permission contained in Art. 1 of Law No /2009, is to enable to BB an organization as efficient as possible regarding its interests in companies in the branches of Insurance, Pension Fund, Capitalization, Reinsurance, Dental Plans and Brokerage, from which a diversity of security products is offered to the Brazilian population, as well as BB materially relies to achieve its results. Thereby, the constitutional principle of Efficiency remains complied with (CF/88, Art. 37, caput). 3

5 3 - Goals related to the development of activities that meet the objectives of the public policies BB Seguridade, aligned with the public interest of Banco do Brasil, enforcer of governmental public policies, supports the achievement of credit, foreign trade policies, as well as the promotion of agribusiness, offering security products suitable for these purposes. The development of the insurance, pension and capitalization market, with the expansion of savings instruments at the disposal of the society and of the economic agents, as well as the spread of the financial culture and education are perennial purposes of the Company. Once BB Seguridade business strictly follows the market rules, upon the service of the needs of the clients and with the appropriate return to its shareholders, including minority, there is no receipt of public money nor financial impact of the public interest in the Company's business. With regard to the indication of pricing process and the rules applicable to rate fixing, BB Seguridade advises its holding BB Corretora and its affiliates Grupo Segurador BB Mapfre, Brasilprev, Brasilcap, IRB and Brasildental, to take into consideration the income and costs structure of each product, aiming at the balance between value generation for the clients and for the companies, offering products in competitive conditions and according to the best market practices. 4 - Funds for costing of public policies The operation of BB Seguridade Participações S.A. is funded entirely by the cash generated by its operating revenue, which include revenue from partnerships and commission revenue. 5 - Internal Control Structures and Risk Management The company has a set of risk management policies that cover the Policy of Risk Management, Internal Control and Compliance, the Policy on Prevention and Fighting of Money Laundering and Financing of Terrorism and Corruption and Information Security Policy, approved by the Board of Directors and published on the website The specific parameters of market, credit and liquidity risk management are addressed in the Policy of Financial Investments. The Risk Management Model of BB Seguridade proposes the alignment of the risk management structure to the internal control system, and uses as theoretical reference the The Three Lines of Defense published by the Institute of Internal Auditors (IIA) in 2013, which defines the management control as the first line of defense, the risk management and compliance supervision as the second line of defense and the independent evaluation as the third. Each of these three lines performs a distinct role within the organization s broadest governance structure. The first line of defense is comprised by the managers and process executors, also named risk owners, responsible for the identification, analysis, evaluation, treatment and monitoring of the risks to which the Company is subject, as well as by the maintenance of efficient controls that mitigate such risks and assure the performance of the established objectives. 4

6 In the second line of defense, the risk management and control areas help and monitor the risk owner in the management of risks, intern controls and compliance, in order to adequate them to the Company s risk appetite, being able to recommend enhancements. In a third line of defense, the Internal Audit, with a high level of independence, provides the governance bodies with evaluations concerning the effectiveness of risk management and internal controls. This line is hierarchically subordinated to the Board of Directors 1 and its activities are supervised by the Audit Committee (Coaud) of the Company. It is worth emphasizing the performance of the governance bodies, Board of Directors, Collegiate Board of Directors, Finance Committee and Audit Committee, which assure the effective application of the Three Lines of Defense model in the management of risks and controls. To assist the administration, the Company has: i) Finance and Investments Committee that, although it is not a statutory body, assists the Collegiate Board of Directors in concerns related to management and to the risk controls of the Company s portfolio holdings and of its subsidiaries; ii) Reputation Risk Committee that, although not a statutory body, assists the Collegiate Board of Directors in concerns related to reputation risks. The following best risk and control management practices also stand out: Code of Ethics and Conduct applicable to every employee and member of Governance bodies, Integrity Program, Channel (named Ethics and Integrity Channel) for the reception of non-ethical behaviors reports and detrimental acts described in Law No /13, definition of corporate authorities, lines of subordination and responsibility, function segregation and collegiate decision flow. As second line of defense, the Superintendency of Risks and Controls acts in the management of relevant corporate risks, compliance monitoring, internal controls certification and dissemination of risk, internal controls and compliance culture. The activities developed regarding risk management cover internal procedures for risk identification, occurrence and impact probability analysis, priority risks evaluation, treatment, monitoring and results report through regular reports submitted to the Executive Board, the Audit Committee and the Board of Directors. Regarding the management of internal controls and compliance, the Superintendency of Risks and Controls is responsible for the systematic monitoring of the activities developed by the risk owners, as to evaluate the compliance with the regulations and established limits and the effectiveness of internal controls. It is also responsible for the timely reporting and monitoring necessary for the correction of eventual deviations, as well as the dissemination of the control culture. For further information concerning the internal control structures and risk management, please access section 5 of the Reference Form and the Company Integrity Program, available on the website 1 By-Laws BB Seguridade Participações S.A (Articles 11 and 35) 5

7 6 - Risk Factors For information concerning the risk factors, please access section 4 of the Company s Reference Form, available on the website Economic and financial data and notes on performance We, members of BB Seguridade's Board of Executive Officers, pursuant to CVM 480/09 instruction, discuss, in section 10 of the Reference Form, the main aspects related to the Company. We declare that the information is true, complete and consistent. Initially, in section 10.1, we position ourselves on the financial and equity conditions of BB Seguridade, its capital structure, funding sources and levels of indebtedness. We also present the composition of the Balance Sheet - BP. The commented performance is based on the consolidated financial statements according to the IFRS (International Financial Reporting Standards), unless otherwise specified. In section 10.2, we comment on the main variations and impacts on operating and financial income, including a summary analysis of the consolidated financial statements of the holding BB Seguridade. In view of section 10.3, we describe the Company's introduction in the private dental care business through Brasildental; the corporate reorganization of the BB E MAPFRE Insurance Group; the merger of BB Capitalização S.A.; the corporate reorganization of IRB Brasil-Re; and the merger of BB Cor Participações S.A. Then, in section 10.4, we comment on whether there are any exceptions or emphases in the independent auditors' report on the financial statements. In relation to critical accounting policies, we highlight, in section 10.5, the fair value of financial instruments, impairment of available-for-sale financial assets, impairment of nonfinancial assets, taxes on profits, recognition and assessment of deferred taxes, provisions and contingent liabilities. In section 10.6 and 10.7, we discuss the off-balance sheet items, as well as their natures and values. In section 10.8, in relation to the business plan, we comment on the investment plan provided for by BB Seguridade. Section 10.9, we discuss other factors that significantly influenced the Company's operating performance. Detailed notes of the Officers on performance, as well as further information concerning economic and financial data of BB Seguridade are available at sections 3 and 10 of the Reference Form. 8 - Policies and practices of corporate governance BB Seguridade has the following policies and programs that enable good Corporate Governance practices: I- Governance Police; II- Risk Management Policy; III- Policy of Disclosure of Relevant Act or Fact; IV- Prevention and Fighting Policy to Money Laundering, Financing of Terrorism and Corruption; V- Related Parties Transaction Policy; VI- Dividends Policy; VII- Securities Trading Policy; VIII- Integrity Program; IX- Code of Ethics and Conduct. 6

8 All these documents are available on the website Further information is available at section 12 of the Reference Form of BB Seguridade Participações S.A. 9 - Description of the structure and of the administration s remuneration As set forth on the By-Laws of BB Seguridade, in its article 10, the remuneration and further benefits of members of the Administration bodies is annually fixed by the Annual General Meeting - AGM, subject to the legal provisions. The values are defined based on market research, internal balance, responsibility, the Company s and Individuals performance, among other factors. The total remuneration covers the fixed remuneration, variable remuneration and benefits. BB Seguridade has a Variable Remuneration Program (RVA), regulated by Law No /76 and by the Company s By-Laws. Further information concerning the remuneration of the administrators of BB Seguridade can be consulted at section 13 of the Reference Form. 7

9 Board of Directors Statement: The Board of Directors of BB Seguridade Participações S.A. declares that it has approved, on this date, the Annual Letter of Public Policies and Corporate Governance, relative to the fiscal year of 2017, in compliance with article 8 of Law No from and with article 13 of Decree No from On May 30, Marcelo Augusto Dutra Labuto Carlos Hamilton Vasconcelos Araújo Nerylson Lima da Silva Isabel da Silva Ramos José Maurício Pereira Coelho Adalberto Santos de Vasconcelos Arnaldo José Vollet 8