2016 Annual report

Audit Committee

Composition

The Committee is composed of independent directors. It must comprise at least three members, the majority of whom do not sit on another Committee of the Board of Directors. Each Committee member must have appropriate proficiency of financial principles and concepts and at least one must have accounting or financial management expertise.

Members

Johanne Cassis, Chairwoman
Louise Pellerin-Lacasse
Claude Robitaille

Mandate

The Audit Committee is responsible for overseeing the financial reporting process and ensuring that the financial statements are reported in accordance with the International Financial Reporting Standards (IFRS). Furthermore, the committee ensures that a suitable internal control system is in place, monitors risk management processes, recommends the company’s risk profile and corresponding action plan to the Board of Directors. The Committee also supervises the audit process as well as procedures implemented by the company to ensure compliance with accounting and finance legislation and regulations.

Activity Report

Further to the replacement of Daniel McMahon and René Delsanne, the Board of Directors named two new members in 2016, Louise Pellerin-Lacasse and Claude Robitaille.

With respect to financial information, the Committee primarily reviewed the independent auditor’s report for the financial year ending December 31, 2015, and received the Dynamic Capital Adequacy Testing (DCAT) report from the appointed actuary as well as her assessment of actuarial liabilities.

The Committee recommended to the Board of Directors that the audited financial statements be approved and that the proposed 2016 audit plan be adopted. The Committee received statements from management concerning the company’s compliance with statutory requirements and policies relating to investment management and IT security.

Committee members also examined existing internal control procedures and studied the submitted reports which dealt with the internal audit activities carried out by the finance team and audits conducted by the company’s external partners, such as reinsurers and specialized firms. In addition, Committee members continue to work with management to monitor the progress and impact of certain changes to IFRS standards and capital adequacy requirements for life and health insurance companies slated for June 2018.

In accordance with the mandate conferred by the Board of Directors, the Committee studied the process leading to the preparation and monitoring of the company’s risk profile, including related action plans, and recommended its adoption to the Board of Directors. The Committee also studied the crisis simulation report prepared by the actuarial team, and proposed a target ratio and the level of risk appetite for the company to the Board of Directors. Similarly, the Committee reviewed the actuarial assessment of the company’s supplemental pension plan and submitted appropriate recommendations to the Board of Directors, with consideration for the impacts of the entry into force of Bill 29 regarding pension plan funding.

With regard to computer security, the Committee reviewed the company’s audits and action plans to ensure the security of its systems and the protection of its data.

Lastly, it recommended to the Board of Directors that certain policies be updated and adopted.

To fulfil its mandate, the Committee worked closely with management and held private meetings with the independent auditor and the appointed actuary.