4.4 Legal risk - Scor

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4.1 Risk related to the business environment 21 4.2 Market risk 33 4.3 Liquidity risk 36 4.4 Legal risk 37 4.5 Other risks 40 4.6 Insurance of specific operational risks (excluding reinsurance activity) 40 4.7 Risk and litigation: Reserving methods 40 18
4 RISK FACTORS The risk factors described below must be considered together with the other information contained in the Registration Document, and specifically with: • Appendix B – Report from the Chairman of the Board of Directors on the terms and conditions for preparing and organizing the work of the Board of Directors and on internal control and risk management procedures in accordance with article L.225-37 of the French Commercial Code - Part II, which describes the internal control and risk management procedures set up by the Group to address the risks to which the Group is exposed; • The consolidated financial statements of the Group that appear in Section 20.1 – Historical financial information: consolidated financial statements and in particular Note 26 – Insurance and financial risk; • Section 6 – Business Overview. These sections describe the risk management measures, processes and hedging positions planned or implemented by the Group in order to identify, assess and mitigate the risks. The Group conducted a review of the risks that could have a negative impact on its activity, its financial situation or its results (or capacity to reach objectives), and considers that no other significant risk than those disclosed exists. Introduction All risks described in Section 4 are managed through a variety of mechanisms in SCOR’s ERM Framework. Difficult conditions in the global capital markets and the economy generally may materially adversely affect SCOR’s business and results of operations The Group’s results of operations could be materially affected by the global capital markets conditions and the economy generally, in France, other countries in continental Europe, the United Kingdom (“the U.K.”), the United States of America (“the U.S.”) and elsewhere around the world. Many economies around the world are experiencing negative macroeconomic trends, including widespread job losses, higher unemployment, lower consumer spending, lower credit availability, the failure of a number of companies and the growing threat of sovereign default. Any continued deterioration in macroeconomic trends could have an adverse effect on SCOR’s business and results of operations. Since the second half of 2007, the global capital markets have been marked by extreme volatility in some securities prices, and by a very low interest rate level for the best rated sovereign debts, while other sovereign debt issuers, notably in the Eurozone, have been subject to high risk premiums. Although pressure on the most fragile sovereign issuers in Europe seems to have decreased since summer 2012, notably due to announcements from the European Central Bank, the financial situation in many countries of the Eurozone remains unstable and new downgrades of some states' financial rating have occurred (including downgrade to AA+ from AAA of France’s government debt rating by Standard & Poor's in January 2012 and by Moody's in November 2012). While SCOR does not currently own any securities issued by the governments of Greece, Italy, Spain, Ireland or Portugal, it cannot predict whether any of the other government securities that it holds in its investment portfolio will be adversely affected in the future by ratings downgrades, the continuing debt crisis or other developments. For further information on investments, refer to “Section 6 – Business Overview – 6.1.5 Investments” and “Section 20.1.6 – Notes to the financial statements, Note 6 – Insurance Business Investments” In addition, the fixed-income markets can experience a period of extreme volatility that has negatively impacted market liquidity conditions. These volatile conditions have affected a broad range of mortgage and asset-backed and other fixed-income securities, including those rated investment grade, the U.S. and international credit and interbank money markets generally, and a wide range of financial institutions and markets, asset classes and sectors. As a result, the market for fixed-income securities has experienced decreased liquidity, increased price volatility, credit downgrade events, increased probability of default and lower than expected recovery rates. Securities that are less liquid are more difficult to value and may be hard to dispose of. These events and the continuing market upheavals may have an adverse effect on SCOR, in part because it has a large investment portfolio and also because it is dependent upon customer behaviour. The Group’s premiums are likely to decline in such circumstances and its profit margins could erode. In addition, in the event of extreme prolonged market events, such as the global credit crisis, SCOR could incur significant losses in its investment portfolio. Refer to Section 20.1.6 – Notes to the financial statements, Note 6 – Insurance Business Investments”, which includes analyses of unrealized and realized investment losses. See also “Section 4.2.2 –SCOR faces risks related to its equity-based portfolio.” Even in the absence of a market downturn, SCOR is exposed to a substantial risk of loss due to market volatility. See “Section 4.2.3 – SCOR is exposed to other risks arising from the investments it owns.” Factors such as consumer spending, business investment, government spending, the volatility and strength of both debt and equity markets, and inflation all affect the business and economic environment and ultimately, the amount and profitability of SCOR’s business. In an economic downturn characterized by higher unemployment, lower household income, lower corporate earnings, lower business investment and lower consumer spending, the demand for SCOR’s and its clients’ products could be adversely affected. In addition, the Group may experience an elevated incidence of 19
Page 2 and 3: NOTICE Certain statements contained
Page 4 and 5: 1 Person responsible 8 1.1 Name and
Page 6 and 7: 13 Profit forecasts or estimates 11
Page 8 and 9: 8 PERSON RESPONSIBLE
Page 10 and 11: 1 PERSON RESPONSIBLE 1.1 Name and t
Page 12 and 13: 2.1 Auditors 13 2.2 Resignation or
Page 14 and 15: 14 SELECTED FINANCIAL INFORMATION
Page 16 and 17: 3 GROUP KEY FIGURES (UNDER CURRENT
Page 20 and 21: claims or surrenders of policies th
Page 22 and 23: B. Life reinsurance The main catego
Page 24 and 25: statutory reserve requirements or h
Page 26 and 27: B. SCOR is exposed to Guaranteed Mi
Page 28 and 29: 4.1.9 FINANCIAL RATINGS PLAY AN IMP
Page 30 and 31: and amortization expenses related t
Page 32 and 33: F. Deposits with custodians As part
Page 34 and 35: 4.2.2 SCOR FACES RISKS RELATED TO I
Page 36 and 37: Details of intangible assets, relat
Page 38 and 39: 4.4.2 INCONSISTENT APPLICATION OF E
Page 40 and 41: See “Appendix B - II. Internal co
Page 42 and 43: 5.1 History and development of the
Page 44 and 45: proportion of the voting rights hel
Page 46 and 47: Gerling Global Re Group, which deve
Page 48 and 49: 5.2 Investments 5.2.1 PRINCIPAL INV
Page 50 and 51: 6.1 Primary activities 53 6.2 Princ
Page 52 and 53: The targets of the strategic plan a
Page 54 and 55: B. Proportional and non-proportiona
Page 56 and 57: payment of commercial debts. Surety
Page 58 and 59: Long-Term Care Long-Term Care (“L
Page 60 and 61: with local lines of business and po
Page 62 and 63: transfer solutions (e.g., catastrop
Page 64 and 65: Retrocession procedures are central
Page 66 and 67: The portion invested in fixed incom
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6.2 Principal markets SCOR is chara
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On 6 March 2010, STOXX announced SC
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The premiums up for renewal, which
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75 ORGANIZATIONAL STRUCTURE
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E U R O P E 7 ORGANIZATIONAL STRUCT
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7.1.1.2 Project "New SCOR" In conne
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7.2 List of issuer’s significant
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8.1 Major existing or planned prope
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86 OPERATING AND FINANCIAL REVIEW
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9 OPERATING AND FINANCIAL REVIEW Th
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year ended 31 December 2012 down fr
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In 2011, SCOR was affected by the f
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31 March 2014. This transaction suc
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Net investment income and investmen
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IFRS classification In EUR million
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Combined ratio For detailed calcula
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10.1 Capital 103 10.2 Cash flow 103
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FINANCIAL LEVERAGE As at 31 Decembe
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11.1 Research and development activ
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studies and publications produced o
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12.1 Most significant trends in pro
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SCOR Global Life expects business o
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114 PROFIT FORECASTS OR ESTIMATES
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116 ADMINISTRATIVE AND MANAGEMENT B
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14 ADMINISTRATIVE AND MANAGEMENT BO
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Name Date of Birth Other principal
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Clariden Leu and from 10 January 20
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Name Age Current Position Executive
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of Alea Europe from 1999 to 2006, w
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134 REMUNERATION AND BENEFITS
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15 REMUNERATION AND BENEFITS 15.1 A
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and analysts; deepening of the empl
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Subscription and share purchase opt
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Year 2011 Year 2010 Premium/ Gross
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144 BOARD PRATICES
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16 BOARD PRATICES 16.1 Date of expi
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148 EMPLOYEES
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17 EMPLOYEES 17.1 Number of employe
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17.2.2 STOCK OPTIONS HELD BY THE ME
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Options exercised Number of stock o
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Plan Share award rights Price per s
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180 of the Commercial Code, options
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(5) Absolute appliance of Group’s
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The following table shows the free
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Shareholders meeting and Company's
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and, for the not tax resident of Fr
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17.4.2 DEFINED BENEFITS PENSION SCH
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18.1 Significant shareholders known
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Distribution of capital (number of
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On 4 July 2012, Alecta Pensionsför
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19.1 Related party transactions 177
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Amendment #7 to the retrocession ag
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The Board of Directors of SCOR SE,
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absorption of its wholly owned subs
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to the Facility Agreement granted/w
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adjusted on the date of departure b
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188 FINANCIAL INFORMATION CONCERNIN
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20 FINANCIAL INFORMATION CONCERNING
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LIABILITIES AS AT 31 DECEMBER In EU
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20.1.3 CONSOLIDATED STATEMENTS OF C
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20.1.5 CONSOLIDATED STATEMENTS OF C
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20.1.6 NOTES TO THE CONSOLIDATED FI
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• Amendments to IAS 19 - Employee
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Intangible assets The cost of intan
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(e) Cash and cash equivalents Cash
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Impairment of financial assets At e
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available and the reserves are adju
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Shadow accounting For the measureme
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together with actuarial assumptions
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The following table sets forth the
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CASH FLOWS BY SEGMENT The cash flow
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SCOR recognised the redemption rece
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PRO FORMA STATEMENT OF INCOME 2011
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2009 In EUR million (1) Provisional
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The Group conducted its annual asse
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20.1.6.6 NOTE 6 - INSURANCE BUSINES
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(B) MOVEMENTS IN LEVEL 3 FINANCIAL
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Financial lease contracts The Group
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At 31 December 2012 and 2011, the u
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MORTALITY SWAPS On 1 January 2008,
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20.1.6.10 NOTE 10 - ASSUMED AND CED
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Issued share capital The number of
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CAPITAL MANAGEMENT POLICY, OBJECTIV
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Share-based payments The caption
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SCOR has entered into a cross-curre
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SCOR Global P&C The table below sho
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The table below is a reconciliation
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(C) SHARE OF RETROCESSIONAIRES IN C
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(c) Defined benefits pension cost 2
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The following table summarizes the
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The table below presents the change
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The performance conditions will be
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In 2010 the tax rate change impact
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Applying the deferred tax netting m
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These expenses are further allocate
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In the event of termination of the
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SIGNIFICANT SUBSIDIARIES, INVESTMEN
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20.1.6.25 NOTE 25 - COMMITMENTS REC
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and documented before the pricing i
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(iv) Pandemic In Life reinsurance,
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Different types of GMDBs are covere
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(b) Receivables from retrocessionai
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(i) Default of pool members SCOR pa
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Additional information on the timin
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On the other hand, an increase in i
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The market sensitivities of the Gro
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20.2 Auditing of historical consoli
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Other information audited by the le
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21.1 Share capital 293 21.2 Charter
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Directors of SCOR SE decided on 28
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Number initially authorized (date o
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Objective 1. Stimulation of the sec
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21.1.7 HISTORY OF THE COMPANY’S S
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Board of Directors’ borrowing pow
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maintained by BNP on our behalf. Ea
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Proxies may be granted by a shareho
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Shareholders’ Meeting that may ta
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22 MATERIAL CONTRACTS None. 310
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23.1 Expert’s report 313 23.2 Inf
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314 DOCUMENTS ON DISPLAY
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316 INFORMATION ON HOLDINGS
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318 NON FINANCIAL INFORMATION
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320 FEES PAID BY THE GROUP TO THE A
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322 PUBLISHED INFORMATION
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28 PUBLISHED INFORMATION 28.1 Infor
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Date Subject Marchés Financiers 27
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328
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1.1 Significant events of the year
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1.2 Balance sheet 1.2.1 BALANCE SHE
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1.3 Income statement In EUR million
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In EUR million NON-UNDERWRITING ACC
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1.5 NOTES TO THE CORPORATE FINANCIA
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1.7 RECORDING OF REINSURANCE TRANSA
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1.12 FINANCIAL INSTRUMENTS RECEIVED
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Name Original currency Share capita
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NOTE 4 - TRANSACTIONS WITH SUBSIDIA
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(b) Financial liabilities • Initi
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• EUR 44 million in reserves for
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NOTE 10 - ANALYSIS OF GENERAL EXPEN
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Number of which to Group directors
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NOTE 15 - ANALYSIS OF COMMITMENTS G
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Appeal of Versailles. On the basis
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aforementioned notes is appropriate
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362 APPENDIX B: REPORT OF THE CHAIR
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APPENDIX B: REPORT OF THE CHAIRMAN
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Pursuant to the Internal Charter, t
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Lastly, Directors are required to i
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The Audit Committee is composed of
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Every year, the conditions of remun
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Moreover, the Chairman and Chief Ex
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The Group SCOR consists of the pare
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Within this environment, control re
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organization, training sessions tar
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For SCOR Global Life: - an internal
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(D) INFORMATION AND COMMUNICATION
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• enhanced audit trail. The initi
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Other information We confirm that t
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APPENDIX C: GLOSSARY* *This glossar
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D DECENNIAL INSURANCE Decennial ins
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M MARINE AND AVIATION INSURANCE ALS
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RETROCESSION Transaction in which t
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elevant at the date of acquisition.
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1 Operating and financial review of
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1.2 Operating results of SCOR SE du
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3.2 Group social indicators 3.2.1 D
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As a global company organised into
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3.2.10 Distribution by age Indicato
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in cooperation with the company doc
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- The items pertain to the entire G
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• Two approaches have been develo
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POLLUTION AND WASTE MANAGEMENT Info
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BIODIVERSITY PROTECTION formation r
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The Group’s French subsidiaries a
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5.5 OTHER ACTIONS TAKEN IN SUPPORT
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7 STATUTORY AUDITORS’REPORT ON TH
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426 APPENDIX E: CROSS REFERENCE TAB
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European Company With a share capit
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4.4 Legal risk - Scor

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