Corporate Governance Statement pursuant to section 289a HGB (German Commercial Code)

Version as at annual report 2009

Generali Deutschland Holding is committed to a good and responsible Corporate Governance. The essential elements of the German Corporate Governance Code are implemented by Generali Deutschland Holding. Generali Deutschland Holding complies with the rules of the Ethical Code of the international Generali Group referring to correctness, honesty, impartiality and professionalism.

I. Declaration in compliance with section 161 AktG (German Companies Act)

In line with their statutory obligation defined in section 161 AktG, the Board of Management and the Supervisory Board publish an annual declaration stating to what extent Generali Deutschland complies with the recommendations of the German Corporate Governance Code. That declaration of compliance was last renewed on November 24, 2009. The Declaration reads as follows:

Generali Deutschland Holding AG is the management holding company of the Generali Deutschland Group. The Board of Management and the Supervisory Board – in performing the tasks attributed to them by law, the Articles of Association and the internal rules of the corporate body concerned – act in the awareness of their responsibility for the employees of the Generali Deutschland Group, for the good of the company and its Group companies and in the interest of the shareholders.

Since the issue of last year's declaration according to section 161 of the German Companies Act (AktG) and until August 5, 2009, Generali Deutschland Holding AG complied with the recommendations of the "Government Commission German Corporate Governance Code" (as amended on June 6, 2008), published in the electronic version of the German Gazette on August 8, 2008, with the exception of the deviations then reported. In the future the company will comply with the recommendations (as amended on June 18, 2009), published in the electronic version of the German Gazette on August 5, 2009, with the following exceptions:

The D&O insurance taken out by the company for the Supervisory Board does not have a deductible (section 3.8 para. 2 of the Code).

Grounds:
Generali Deutschland Holding AG is of the opinion that considering the responsibility and motivation of the members of the Supervisory Board in performing their tasks a deductible is not necessary.

Generali Deutschland Holding AG does not have a stock option plan of its own (sections 4.2.3, 7.1.3 of the Code).

Grounds:
The members of the Board of Management of Generali Deutschland Holding AG are included in the stock option plan of Assicurazioni Generali S.p.A. For the granting of the options, the achievement of a target exclusively referring to the German Group is mandatory in addition to the achievement of the targets of the Italian plan.

The notification documents convening the General Meeting are not sent by electronic means (section 2.3.2 of the Code).

Grounds:
Generali Deutschland Holding AG regularly publishes the documents convening a General Meeting on its website and makes them available to shareholders and other interested persons for download. Considering the consequences of not duly convening a General Meeting, however, the Board of Management and the Supervisory Board are of the opinion that the risks involved in generally sending these documents by electronic means are too big.

As resolved by the shareholders at the General Meeting of May 18, 2006, the Corporate Governance Report included in the Annual Financial Statements does not indicate the remuneration of the members of the Board of Management on an individualized basis (sections 4.2.4, 4.2.5 of the Code).

Grounds:
On May 18, 2006 the General Meeting of Generali Deutschland Holding AG resolved not to disclose the remuneration of the members of the Board of Management on an individualized basis in the Financial Statements of the Company and of the Group in order to protect the privacy of the members of the Board of Management.

Generali Deutschland Holding AG does not have a nomination committee of the Supervisory Board as defined by section 5.3.3 of the Code.

Grounds:
Since the shareholder representatives in the Supervisory Board of Generali Deutschland closely communicate with each other in any case, establishing such committee appears to be unnecessary.

There is no age limit for members of the Supervisory Board (section 5.4.1 of the Code).

Grounds:
The quality of the work of the members of the Supervisory Board is not determined by their age but by their individual knowledge and experience. The company wants highly qualified and experienced persons to be appointed to the Supervisory Board, regardless of age limits.

There is no limitation, beyond the limitation provided for by law, of the number of mandates held in the Supervisory Boards of listed non-Group companies (section 5.4.5 of the Code).

Grounds:
Until today there has been no practical need in the Supervisory Board of Generali Deutschland to establish a limitation of the mandates held in the Supervisory Boards of listed non-Group companies. It often is useful when members of the Supervisory Board can contribute their experience from non-Group companies.

The Corporate Governance Report does not disclose the remuneration of the members of the Supervisory Board on an individualized basis nor the payments made to them on the basis of other business relationships with the company or with Group companies (section 5.4.6 para. 3 of the Code).

Grounds:
The structure of the remuneration of the Supervisory Board is disclosed in the Articles of Association and in the Financial Report. Disclosing the remuneration on an individualized basis would not provide any additional information of relevance to the capital market.

Furthermore, for considerations of business policy, no information should be disclosed which could allow conclusions with regard to the arrangements of the relationships with important business partners of the Group. For reasons of equal treatment, the remuneration of the members of the Supervisory Board is disclosed as a total amount, as required by law.

The Report of the Supervisory Board does not include information in line with section 5.4.7 of the Code (frequency of attendance at Supervisory Board meetings).

Grounds:
Until today the efficiency of the Supervisory Board's activities has not been affected by the non-attendance of members. Therefore such controlling information has not been included in the Report of the Supervisory Board.

II. Relevant information on corporate government practice

1. Internal controlling systems

The internal controlling system of the Generali Deutschland Group is based on the two fundamental controlling dimensions of capital management and performance management. Capital management aims to sustainably ensure the risk-bearing capacity and financial strength of the Group. The target of performance management, on the other hand, is to persistently increase the corporate value of the Generali Deutschland Group.

a) Basic concept

Internal corporate controlling in the Generali Deutschland Group is organized on the basis of a standardized planning and controlling process across the Group. Uniform planning and simulation models as well as regular reporting are applied for the monitoring and controlling of the parameters derived from strategic planning. Apart from the classical accounting-based target parameters – such as net profit and combined ratio – the system also covers economic risk-based controlling parameters which are described and presented below in more detail. In this context, the two major controlling dimensions of capital management and performance management are combined with one another.

Capital management focuses on sustainably ensuring the risk-bearing capacity and financial strength of the Group. For that purpose the economic capital, which is tied under risk aspects and on the basis of solvency and regulatory rules, is calculated at different company and controlling levels and compared to the actual capital available for bearing risks. Capital management is thus an integrated part of internal risk management.

Performance management, on the other hand, represents the value-based perspective and measures the value increase of the Group over time. For that purpose, the economic results of our business activities are derived and then related to the previously determined available capital and tied capital amounts. By linking these dimensions, key return figures are identified which can be used to assess risk-based profitability.

b) Capital-management approach

Within the scope of capital management, the capital of the Generali Deutschland Group which is tied under risk aspects as well as solvency and other regulatory rules is calculated and compared to the available capital. In our external communication we use the term economic capital (EC) for the tied capital. The available capital is composed of the embedded value (EV) and the hybrid capital, with the embedded value corresponding to the actual capital attributable to the shareholders.

The economic capital is calculated on the basis of consistent risk models for all segments of the Generali Deutschland Group. It describes the economic capital required for compensating possible losses that may arise due to uncertainties involved in future developments and, in addition, takes into account further solvency and regulatory requirements. The economic capital required comprises market risks (equity and interest-rate risks as well as risks from the change of assumed volatilities, risks involved in property prices and foreign currency risks), credit risks, concentration risks and operational risks as well as underwriting risks and building-society risks specific to the segments. In order to quantify the economic capital, the internal risk model of the international Generali Group is used which, on the basis of detailed corporate information, determines the value at risk, i.e. the maximum loss which, according to a predetermined probability, will not be exceeded. In this context we proceed from the reference period of one year, which is common practice under solvency II, and a confidence level of 99.5 percent.

In addition to the Group's equity capital, the embedded value comprises above all the value in force in life and health insurance and it is calculated taking into account the particularities specific to the segments on the basis of actuarial and accounting data.

The embedded value and the value in force in the life and health segment are determined by means of market consistent measurement procedures, the so-called MCEV (market consistent embedded value) methodology.

The internal risk models are being continuously enhanced with a view to the requirements of Solvency II, which is expected to come into force for the year 2012. This may lead to changes in the methodology over time. In order to illustrate the impact of such change, the previous year's results have been recalculated in line with the current methodology and are also shown for comparison.

c) Performance-management approach

The derivation of economic results is strongly influenced by the business models used. In property and casualty insurance, the economic result is mainly determined by the combined ratio of the business year; in the financial services segment the key element are the interest margin and the earnings from portfolio management. Due to the long duration of contracts, present-value models are used in life and health insurance taking into account the present value of all future profits from the business in force. An important key figure in this context is the new business value indicating the present value of all future profits expected from the insurance contracts newly concluded in the business year.

In addition, performance management also takes into account extraordinary items due to investment income or tax impacts. Since these items may have a significant influence on results but are not attributable to operating business, they are excluded when measuring operating profitability and are shown separately.

On the basis of these results it is possible to calculate the key figures of return on economic capital (RoEC) and return on embedded value (RoEV). The RoEC puts the economic result, adjusted for extraordinary items, in proportion to the tied capital. This figure measures our operating profitability. On the other hand, the RoEV indicates the total economic result as a percentage of the total available capital. The RoEV is thus an indicator of our profitability taking into account extraordinary items.

d) Integration of internal management tools into the preparations for Solvency II

The Solvency II project initiated by the European Commission aims at a revision of the regulatory requirements for insurance companies in Europe. In particular the level of capital requirements under the future solvency system are to be more closely linked to the specific business structure of an insurance company's risks. Since for regulatory purposes there is also the option of applying internal approaches, the Generali Deutschland Group has started at an early stage to prepare for the future requirements. Within the scope of these preparations, the internal models are continuously enhanced and internal risk-management processes are verified with a view to future requirements. In particular, for instance, the requirements changed or specified in more detail in the wake of the financial and economic crisis are also being taken into consideration on a continuous basis.

2. Compliance system

The companies of the Generali Deutschland Group conduct their business activities in a responsible manner and in compliance with legal provisions. A sustainable compliance in the Generali Deutschland Group creates trust on the part of the capital market and customers. Therefore the Board of Management of Generali Deutschland maintains binding compliance programmes for all companies of the Generali Deutschland Group. These guidelines support employees in their task of fulfilling increasingly demanding legal requirements.

For that purpose, the Generali Deutschland Group has adopted the Ethical Code of the international Generali Group. With the Ethical Code, the Generali Deutschland Group gives itself a general guideline for its relationships with customers, shareholders, employees, contractual partners as well as public institutions and the press. In this context, the Ethical Code is committed to essential principles such as correctness, honesty, impartiality and professionalism.

The framework provided by the Ethical Code is defined in more detail by the Code of Conduct of Generali Deutschland. The Code of Conduct comprises specific rules of conduct for the employees, in particular with regard to issues such as confidentiality, accepting and giving gifts or other grants, contract assignment, business transactions with employees, the four-eye principle and conflicts of interest. This strengthens the trust of customers, partners, employees and the general public in a fair and ethical conduct of the company and of all employees.

To implement these rules of conduct, regular training is provided across the Group. In addition, so-called compliance officers have been appointed in all major Group companies. They are the contacts in all compliance issues and report regularly to the responsible management bodies. Beyond this, the Group companies have appointed two external lawyers as ombudspersons, which the employees can contact regarding suspected infringements of compliance rules and who will keep the identity of the persons providing the information as strictly confidential.

In addition to these general rules of conduct, a Group-wide programme has been established to provide for the observance of anti-trust rules by indicating precise guidelines for all employees of the Generali Deutschland Group. On the basis of a Group-wide network of compliance officers and by regular training courses for employees in sensitive areas it is ensured that the guidelines are implemented equally across the Group and that infringements of anti-trust law are avoided. Furthermore the Board of Management of Generali Deutschland, in cooperation with the compliance officer, makes certain that the rules of the Securities Trading Act are observed in the Generali Deutschland Group by distributing state-of-the-art guidelines for security compliance across the Group.

3. Availability of the rules indicated above

The Ethical Code of the international Generali Group is available at the following link: Link

The Code of Conduct of the Generali Deutschland Group is available at the following link: Link

The Security Compliance Guidelines of the Generali Deutschland Group are available at the link: Link

The Handbook for the Compliance with Anti-Trust Legislation is available at the following link: Link

For more detailed information, the following link leads to the latest Company Report of Generali Deutschland Holding AG and the latest Group Report of the Generali Deutschland Group.

III. Description of the functioning of the Board of Management and the Supervisory Board, their composition and the functioning of their committees

1. Composition of the Board of Management: Link

2. Functioning of the Board of Management:

The Board of Management manages the company in its own responsibility pursuant to legal rules, the Articles of Association and the Internal Rules for the Board of Management. It cooperates trustfully with the other corporate bodies of the company and the bodies of employee representation to the benefit of the company.

The Board of Management develops the strategic orientation of the company, agrees this orientation with the Supervisory Board, ensures the implementation of the strategy and regularly discusses the implementation status with the Supervisory Board. The Board of Management ensures adequate risk management and risk controlling in the company. The Board of Management determines the business policy of the Generali Deutschland Group. The tasks and authorities of the Board of Management are based on the company's function as a reinsurer and a holding company.

The members of the Board of Management are jointly responsible for the entire management activities. Notwithstanding this joint responsibility, each member of the Board of Management is in charge of the business division assigned to him. The assignment of tasks to the three members of the Board of Management is based on a business assignment plan fixed in writing.

The Board of Management as a full body takes decisions in all matters of fundamental importance. The Internal Rules of the Board of Management define a catalogue of measures to be handled and resolved by the full Board of Management.

Furthermore the Internal Rules of the Board of Management include a catalogue of management measures requiring the approval of the Supervisory Board which in these cases takes decisions in its "General Committee".

As a rule, the Board of Management meets twice a month. The meetings are convened by the Chief Executive (Vorstandsvorsitzender or Vorstandssprecher). Furthermore each member of the Board of Management can demand that a meeting be convened. Unless otherwise provided for by law, the Board of Management takes its decisions with the simple majority of votes cast. If a member of the Board of Management has been appointed as "Vorsitzender des Vorstands", the "Vorsitzender" has the casting vote in the case of a tie.

In line with the Internal Rules of the Board of Management, the Chief Executive is in charge of coordinating the work of the members of the Board of Management and of taking the lead in communication and in the cooperation with the Supervisory Board. Beyond this, Dietmar Meister as the Chief Executive (Vorstandssprecher) is in particular in charge of the areas of Group development, controlling/risk management, finance/accounting, legal matters, corporate communication, distribution and the building society. The two other members of the Board of Management have also been assigned specific divisions and responsibilities in the business assignment plan. Mr. Christoph Schmallenbach is responsible for information technology, corporate operations, process optimization and internal audit. Mr. Winfried Spies is the Director of Labour Relations and, in addition, he is in charge of the technical insurance areas (life, health, property/casualty, legal expenses and reinsurance).

Because of the small number of members of the Board of Management and due to the company's function as holding company and reinsurer, the Board of Management has established no committees.

3. Composition of the Supervisory Board and the Committees of the Supervisory Board:

4. Functioning of the Supervisory Board:

The Supervisory Board of Generali Deutschland Holding AG has to continuously monitor the conduct of business of the Board of Management and to accompany management with its advice. For fulfilling the tasks assigned to the Supervisory Board by law, the Articles of Association and the Internal Rules, the Supervisory Board regularly obtains detailed information from the Board of Management about the business development, the situation and business policy of Generali Deutschland and its major subsidiaries. In addition, the Board of Management provides comprehensive information to the Supervisory Board on corporate planning, the risk situation and risk management as well as on the status of the major activities in the Generali Deutschland Group with a view to increasing earnings by projects across the Group and by measures taken at the level of the individual companies. The reports are given both in writing and verbally and are subsequently discussed with the Board of Management. Furthermore, the Chairman of the Supervisory Board is continuously in close contact with the Chief Executive, who regularly informs him on the decisions of the management.

More details regarding the composition of the Supervisory Board, the term of office, secrecy, tasks, resolutions, declarations of intent and the remuneration of the members of the Supervisory Board are indicated in the Articles of Association (articles 8-10) of Generali Deutschland Holding AG, available at the following link: Link

5. Composition and functioning of the Committees of the Supervisory Board:

a) Committee to be established pursuant to the provisions of section 27 para. 3 Co-Determination Act:

The Conciliation Committee to be established pursuant to section 27 para. 3 of the Co-Determination Act has the tasks defined in section 31 para. 1 of the Co-Determination Act in those cases where an appointment of members of the Board of Management cannot be achieved as provided for by section 31 para. 2 of the Co-Determination Act: As a matter of principle, the members of the Board of Management have to be elected with a majority representing at least two thirds of the votes of the Supervisory Board (section 31 para. 2 Co-Determination Act). If such appointment is not achieved, the Committee established pursuant to section 27 para. 3 Co-Determination Act, within a period of one month after the vote in which the required majority of at least two thirds had not been reached, has to submit a proposal to the Supervisory Board regarding the appointment of the member of the Board of Management.

The Committee pursuant to section 27 para. 3 Co-Determination Act is composed of:

the Chairman of the Supervisory Board
the Deputy Chairman of the Supervisory Board as well as
one representative each of the shareholders and of the employees in the Supervisory Board to be elected by the Supervisory Board.

b) General Committee:

According to the Internal Rules of the Supervisory Board specific types of transactions are only allowed to be made with the approval of the General Committee. (link)

The General Committee is composed of:

the Chairman of the Supervisory Board,
the Deputy Chairman of the Supervisory Board as well as
three additional members of the Supervisory Board representing the shareholders and to be elected by the Supervisory Board and
one additional member of the Supervisory Board representing the employees and to be elected by the Supervisory Board upon proposal of the employees.

c) Committee for Matters of the Managing Board:

The Committee for Matters of the Managing Board has the task of preparing the following resolutions to be taken by the Supervisory Board:

resolution on the contents of employment contracts with members of the Board of Management and on giving declarations of intent regarding such contracts;
approval of the appointment of members of the company's Board of Management to supervisory boards
resolution on granting loans pursuant to sections 89 and 115 AktG and on agreements as defined by section 114 AktG

The Committee for Matters of the Managing Board is composed of:

the Chairman of the Supervisory Board,
the Deputy Chairman of the Supervisory Board as well as
three additional members of the Supervisory Board representing the shareholders and to be elected by the Supervisory Board and
one additional member of the Supervisory Board representing the employees and to be elected by the Supervisory Board upon proposal of the employees.

d) Audit Committee

The Audit Committee has been assigned the following tasks:

issues of accounting, risk management and compliance;
verification of the required independence the auditor;
giving the auditing assignment to the auditor, determining focus areas of auditing and agreeing the auditing fee;
discussion of the half-year and quarterly financial reports with the Board of Management before publication.

The Audit Committee is composed of:

three members of the Supervisory Board representing the shareholders and to be elected by the Supervisory Board and
two members of the Supervisory Board representing the employees and to be elected by the Supervisory Board.

With regard to the composition of the Audit Committee care is taken to ensure that at least one independent member of the Committee has expertise in the fields of accounting or auditing (section 100 para. 5 AktG).