2018 Registration document and annual fi nancial report - BNP PARIBAS 275
4CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018
4
Statutory Auditors report on the consolidated fi nancial statements
Technical reserves of insurance companies (See Notes 1.f.3 and 5.j to the consolidated fi nancial statements)
Description of risk How our audit addressed this risk
At the year-end, a liability adequacy test is performed for BNP Paribas insurance activities.
This test consists in comparing insurance liabilities (or technical reserves) recognised in the balance sheet with projected net future cash fl ows. In the hypothetical event that the carrying amount of the insurance liabilities were not suffi cient, an additional liability would have to be recognised.
At 31 December 2018, total technical insurance reserves amounted to EUR 213.7 billion.
The end-2018 test confi rmed that the carrying amount of the reserves was suffi cient.
We deemed the implementation of the liability adequacy test for the Savings business to be a key audit matter because it involves using actuarial models as well as modelling options and guarantees which are specifi c to BNP Paribas and requires management to exercise judgement to determine certain key assumptions (e.g., return on assets, surrender rate and fees).
Based on a sample, we assessed the amount of net future cash fl ows used in the calculation, in particular by:
■ assessing the validity of the data on asset portfolios and contracts used as a starting point for the modelling exercise;
■ identifying the main changes made to the actuarial models, assessing the relevance of said changes and obtaining an understanding of their impact on the result of the test;
■ analysing differences in the model results between 2017 and 2018 using analyses prepared by BNP Paribas. We verifi ed that the most material differences were justifi ed by changes in the portfolio, the assumptions or the models.
We also examined the disclosures in the notes to the consolidated fi nancial statements with respect to insurance liabilities.
Specifi c verifi cations
As required by legal and regulatory provisions and in accordance with professional standards applicable in France, we have also verifi ed the information pertaining to the Group presented in the Board of Directors management report.
We have no matters to report as to its fair presentation and its consistency with the consolidated fi nancial statements.
We attest that the Group management report includes the consolidated non-fi nancial information statement required under article L.225-102-1 of the French Commercial Code. However, in accordance with article L.823-10 of the French Commercial Code, we have not verifi ed the fair presentation and consistency with the consolidated fi nancial statements of the information given in that statement, which will be the subject of a report by an independent third party.
Report on other legal and regulatory requirements
Appointment of the Statutory Auditors
We were appointed Statutory Auditors of BNP Paribas SA by the Annual General Meetings held on 23 May 2006 for Deloitte & Associés, 26 May 1994 for PricewaterhouseCoopers Audit and 23 May 2000 for Mazars.
At 31 December 2018, Deloitte & Associés, PricewaterhouseCoopers Audit and Mazars were in the thirteenth, the twenty-fi fth and the nineteenth consecutive year of their uninterrupted engagement, respectively.
Responsibilities of management and those charged with governance for the consolidated fi nancial statements
Management is responsible for preparing consolidated fi nancial statements giving a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and for implementing the internal control procedures it deems necessary for the preparation of consolidated fi nancial statements that are free of material misstatement, whether due to fraud or error.
In preparing the consolidated fi nancial statements, management is responsible for assessing the Company s ability to continue as a going concern, disclosing, as applicable, matters related to going concern, and using the going concern basis of accounting, unless it expects to liquidate the Company or to cease operations.
