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Allianz Annual Report 2012

Risk capital controls Wehavearobustandcomprehensiveriskgovernancestruc- ture that is supported by audit, compliance and indepen- dent review functions similar to our financial reporting governance. However, since our internal risk capital calcu- lations incorporate economic factors not fully reflected in accountingresults,wehaveputinplaceadditionalcontrols within our management reporting processes to ensure that these additional estimates are adequately controlled. Thesecontrolsincludethevalidationofmodelsandassump­ tionsbyindependentexternalreviewsandcontinuousbench­ ­marking to market and/or peer assumptions and practices. We benchmark and explain our non-market assumptions against practices in the industry, actuarial associations and guidance from supervisory authorities. During 2012, we worked on further improving the internal control environment around the computation of our inter- nal risk capital in anticipation of the future Solvency II ­regime. We will continue to make refinements as the ­Solvency II requirements evolve. Overall, as with estimates and assumptions involving ­financial reporting, the management reporting processes that underpin our risk capital framework are well controlled, consistently applied and prudent. Governance Responsibility for ensuring the completeness, accuracy and reliability of our consolidated financial statements rests with the Chairman of the Board of Management and the board member responsible for Finance, Controlling and Risk of ­Allianz SE, supported by Group Center functions, the Group Disclosure Committee and operating entities. The Group Disclosure Committee ensures that these board members are made aware of all material information that could affect our disclosures and determines the complete- ness and accuracy of the information provided in the quar- terly and annual financial reports. The committee meets on a quarterly basis before the financial reports are issued. Subsidiaries within the scope of our control system are in- dividually responsible for adhering to the Group’s internal controlpolicyandforcreatinglocalDisclosureCommittees that are similar to the Group-level committee. The entities’ CEOs and CFOs provide periodic sign-offs to the manage- ment of ­Allianz SE, certifying the effectiveness of their local system of internal controls as well as the completeness, ­accuracy and reliability of financial data reported to the Group. Further control mechanisms In our opinion, a strong internal control environment as critical to managing our company successfully and rein- forcing trust with our stakeholders. For example, we have therefore implemented an enhanced internal control envi- ronment similar to the one we currently have for financial reporting across our largest Life insurance operating enti- ties for the Market Consistent Embedded Value (MCEV) re- porting ­process. C Group Management Report Risk Report and Financial Control 184 Risk Report 214 Controls and Procedures Annual Report 2012    Allianz Group 215