CNP Assurances — Annual Report 2010

Mar 18, 2011

CNP ASSURANCES CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2010

	Consolidated balance sheet4
	Consolidated income statement 4
	Consolidated statement of income and expense recognised directly in equity4
	Consolidated statement of changes in equity 4
	Consolidated statement of cash flows4 Notes to the consolidated financial statements 4
Note 1.	Significant events of the year4
1.1	Finalisation of the sale of the stake in Global Seguros 4
1.2	Recognition of the acquisition of Barclays Vida y Pensiones4
1.3	Issue of subordinated debt 4
1.4	Tax reform concerning the capitalisation reserve 4
1.5	Consequences of the legislation to reform the French pension system4
1.6 1.7	Structural partnership with MFPrévoyance SA 4 CNP Assurances Annual General Meeting4
Note 2.	Subsequent events4
Note 3.	Summary of significant accounting policies 4
3.1	Statement of compliance4
3.2	Basis of preparation of the consolidated financial statements4
3.3	Basis of consolidation4
3.4	Intragroup transactions 4
3.5	Deferred participation asset/reserve4
3.5.1 3.5.2	Unconditional participation 4 Conditional participation 4
3.6	Foreign currency translation 4
3.7	Foreign currency transactions4
3.8	Business combinations and other changes in scope of consolidation 4
3.9	Intangible assets4
3.9.1	Goodwill4
3.9.2	Life insurance portfolios4
3.9.3	Distribution agreements4
3.9.4 3.9.5	Intangible asset related to the reform the French pension system4 Software4
3.10	Investments4
3.10.1	Property company4
3.10.2	Financial assets4
3.10.3	Derivative instruments4
3.10.4	Measurement of financial assets at fair value 4
3.11	Equity 4
3.11.1	Components of equity4
3.11.2 3.12	Capital management 4 Treasury shares4
3.13	Insurance and financial liabilities 4
3.13.1	Contract classification 4
3.13.2	Insurance contracts and financial instruments with DPF 4
3.13.3	Financial instruments without DPF (IAS 39)4
3.13.4	Service contracts4
3.14	Property and equipment4
3.15 3.15.1	Employee benefit obligations 4 Employee benefit plans4
3.15.2	Share-based payment4
3.16	Financing liabilities and subordinated debt 4
3.17	Acquisition costs and operating expenses4
3.18	Taxation4
3.19	Operating segments 4
3.20	Contingent liabilities4
Note 4.	Share capital4
4.1 4.2	Undated deeply-subordinated notes reclassified in equity4 Ownership structure4
4.3	Equity 4
4.4	2010 dividends4
4.5	Basic and diluted earnings per share4
4.6	Related party information4
4.7	Management remuneration 4
Note 5.	Scope of consolidation4
5.1 5.2	Consolidated companies and percentage of voting rights at 31 December 2010 4 Analysis of the Barclays Vida y Pensiones acquisition price 4
5.3	Financial information concerning associates 4
Note 6.	Segment information4
6.1	Balance sheet by business segment at 31 December 20104
6.2	Balance sheet by business segment at 31 December 20094
6.3	Balance sheet by business segment at 31 December 20084

6.4	Income statement by business segment at 31 December 20104
6.5	Income statement by business segment at 31 December 20094
6.6	Income statement by business segment at 31 December 20084
Note 7.	Intangible assets4
7.1	Intangible assets by category 4
7.2	Goodwill4
7.3	Value of in-force business and distribution agreements 4
7.4	Software4
Note 8.	Investment and owner-occupied property4
8.1	Investment property4
8.2	Owner-occupied property 4
Note 9	Investments4
9.1	Investments by category 4
9.2	Measurement of assets recognised at fair value4
9.3	Repurchase agreements 4
9.4	Lent securities4
9.5	Movements for the period4
9.6	Derivative instruments4
9.7	Credit risk4
9.8	Classification of investments by type of asset and by geographic region 4
9.9	Foreign currency transactions4
9.10	Commitments given and received4
Note 10.	Analysis of insurance and financial liabilities4
10.1	Analysis of insurance and financial liabilities 4
10.2	Change in technical reserves4
10.3	Main assumptions4
10.4	Changes in financial liabilities –linked liabilities 4
10.5	Credit risk on reinsured business 4
Note 11.	Subordinated debt4
Note 12.	Insurance and reinsurance receivables4
12.1	Insurance and reinsurance receivables4
12.2	Other receivables 4
Note 13.	Deferred taxes 4
Note 14.	Provisions4
14.1	Provisions – 2010 4
14.2	Provisions – 2009 4
14.3	Provisions – 2008 4
Note 15.	Liabilities arising from insurance and reinsurance transactions4
15.1	Liabilities arising from insurance and reinsurance transactions4
15.2	Other liabilities 4
15.3	Employee benefits – IAS 19 4
Note 16.	Revenue 4
16.1	Earned premiums and revenue from other activities4
16.2	Reconciliation to reported revenue 4
16.3	Revenue by partnership centre4
16.4	Revenue by business segment4
16.5	Revenue by company4
16.6	Direct and inward reinsurance premiums 4
Note 17.	Claims and benefit expense 4
Note 18.	Administrative expenses and business acquisition costs4
18.1	Expenses analysed by function4
18.2	Expenses analysed by nature 4
18.3	Administrative expenses, net 4
18.4	Analysis of commission expense4
Note 19.	Reinsurance result 4
Note 20.	Investment income 4
20.1	Investment income and expense 4
20.2	Fair value adjustments to assets4
Note 21.	Income tax expense4
Note 22.	Interest rate risk on financial assets4
22.1	Caps and floors4
22.2	Effective Interest rates 4
22.3	Carrying amounts by maturity 4
22.4	Carrying amounts at maturity – held-to-maturity investments4
22.5	Average life of securities4
Note 24.	Liquidity risk4
24.1	Future cash flows from assets4
24.2	Payment projections by maturity 4
24.3	Contracts with immediate surrender option 4
Note 25.	Reconciliation of unit-linked assets and liabilities4
Note 26.	Risk management 4
26.1	Credit risk4
26.2 26.3	Currency risk 4 Sensitivity of MCEV© to market risks4

26.4	Asset/liability management 4
26.5	Insurance risk4
26.5.1	Contract terms and conditions 4
26.5.2	Valuation of insurance liabilities (assumptions and sensitivities)4
26.5.3	Concentration of insurance risk 4
26.5.4	Financial options, guarantees and embedded derivatives not separated from the host contract4
26.5.5	Credit risk arising from insurance business 4
26.5.6	Insurance-related legal risks 4
26.6	Risk management 4

Consolidated balance sheet

ASSETS – In € millions	Notes	31/12/2010	31/12/2009	31/12/2008
Goodwill	7	682.5	775.6	712.2
Value of business in force	7	127.8	70.2	169.2
Other intangible assets	7	368.0	31.8	29.2
Total intangible assets		1,178.2	877.6	910.6
Investment property	8	1,278.0	1,284.1	1,555.8
Held-to-maturity investments	9	1,212.8	1,209.9	958.8
Available-for-sale financial assets	9	230,272.2	216,839.2	187,906.4
Securities held for trading	9	64,033.1	62,631.5	58,122.3
Loans and receivables	9	3,958.6	2,451.4	2,230.0
Derivative instruments	9	3,012.8	2,661.0	2,234.4
Insurance investments		303,767.5	287,077.1	253,007.7
Banking and other investments		65.2	71.7	83.8
Investments in associates	5	0.0	0.0	426.3
Reinsurers' share of insurance and financial liabilities	10	7,446.2	6,879.4	6,305.3
Insurance or reinsurance receivables	12	3,256.1	3,034.9	3,339.3
Current tax assets		515.7	419.8	371.5
Other receivables	12	1,782.8	1,228.6	2,180.4
Property and equipment	8	252.7	179.8	206.6
Other non-current assets		358.1	270.1	226.5
Deferred participation asset	10	0.0	0.0	1,175.3
Deferred tax assets	13	198.6	127.7	73.5
Other assets		6,364.0	5,260.9	7,573.1
Non-current assets held for sale		0.0	571.1	0.0
Cash and cash equivalents		787.5	1,138.8	1,257.7
TOTAL ASSETS		319,608.6	301,876.7	269,564.6

EQUITY AND LIABILITIES – In € millions	Notes	31/12/2010	31/12/2009	31/12/2008
Share capital	4	594.2	594.2	594.2
Share premium account		981.5	981.5	981.5
Revaluation reserve		1,199.6	1,332.7	496.8
Deeply-subordinated debt	4	2,141.8	2,143.0	2,143.0
Retained earnings		5,799.8	5,319.9	5,100.3
Profit for the period		1,050.0	1,004.1	730.6
Translation reserve		274.9	172.9	(8.4)
Equity attributable to owners of the parent		12,041.7	11,548.3	10,037.9
Minority interests		1,136.4	877.1	562.0
Total equity		13,178.0	12,425.5	10,599.9
Insurance liabilities (excluding unit-linked)	10	94,231.5	79,957.8	63,201.6
Insurance liabilities - unit-linked	10	28,946.8	27,135.6	23,094.7
Insurance liabilities		123,178.3	107,093.3	86,296.3
Financial liabilities – financial instruments with DPF (excluding unit linked)	10	150,362.0	147,370.2	144,073.7
Financial liabilities – financial instruments without DPF (excluding unit-linked)	10	984.6	787.7	465.0
Financial liabilities – unit-linked financial instruments	10	8,463.3	9,455.7	10,678.0
Financial liabilities		159,809.8	157,613.6	155,216.7
Derivative financial instruments separated from the host contract		0.0	0.0	0.0
Deferred participation reserve	10	5,165.8	6,889.8	356.7
Insurance and financial liabilities		288,154.0	271,596.8	241,869.7
Provisions	14	188.2	143.8	329.9
Subordinated debt	11	2,242.0	1,492.0	1,881.0
Financing liabilities		2,242.0	1,492.0	1,881.0
Operating liabilities represented by securities		3,939.4	3,459.3	5,016.8
Operating liabilities due to banks		336.1	139.5	63.8
Liabilities arising from insurance and reinsurance transactions	15	1,943.6	2,318.5	2,101.9
Current taxes payable		347.5	255.3	312.3
Current account advances		316.6	317.1	309.5
Liabilities towards holders of units in controlled mutual funds		2,632.9	2,852.6	2,687.1
Derivative instruments	9	2,356.2	1,970.7	1,268.3
Deferred tax liabilities	13	513.9	1,132.7	620.7
Other liabilities	15	3,460.2	3,294.6	2,503.7
Other liabilities		15,846.4	15,740.3	14,884.1
Liabilities related to assets held for sale		0.0	478.4	0.0
TOTAL EQUITY AND LIABILITIES		319,608.6	301,876.7	269,564.6

Consolidated income statement

In € millions	Notes	31/12/2010	31/12/2009	31/12/2008
Premiums written		32,288.4	32,531.5	28,277.9
Change in unearned premiums reserve		(47.7)	(8.5)	(3.4)
Earned premiums	16	32,240.7	32,523.1	28,274.4
Revenue from other activities	16	199.0	168.6	158.4
Other operating revenue		0.0	0.0	0.0
Investment income		10,756.2	10,100.3	10,181.0
Gains and losses on disposal of investments, net of reversals of impairment losses and amortisation		642.0	1,303.6	1,490.0
Change in fair value of financial assets at fair value through profit		1,157.9	3,982.5	(10,798.5)
Impairment losses on financial instruments		(207.9)	(194.5)	(3,014.4)
Investment income (expense) before finance costs	20	12,348.1	15,191.8	(2,141.8)
Net revenue		44,787.8	47,883.5	26,291.0
Claims and benefits expenses	17	(39,207.6)	(42,295.2)	(21,086.4)
Investment and other financial expenses, excluding finance costs	20	(524.9)	(515.7)	(559.0)
Reinsurance result	19	(39.9)	(27.7)	(66.5)
Expenses of other businesses		(2.1)	(6.2)	(7.1)
Acquisition costs	18	(3,162.1)	(3,048.3)	(2,977.1)
Amortisation of value of in-force business acquired and distribution agreements	7	(31.5)	(149.8)	(14.4)
Contract administration expenses	18	(373.2)	(351.0)	(370.4)
Other recurring operating income and expense, net	18	(18.3)	236.1	(130.5)
Total other recurring operating income and expense, net		(43,359.5)	(46,157.9)	(25,211.3)
Recurring operating profit		1,428.3	1,725.5	1,079.8
Other non-recurring operating income and expense, net		(2.9)	(1.3)	1.9
Operating profit		1,425.3	1,724.3	1,081.7
Finance costs	20	(95.0)	(85.4)	(108.5)
Change in fair value of intangible assets	7	(19.4)	(104.0)	0.0
Share of profit of associates	5	0.0	31.7	29.1
Income tax expense	21	(22.8)	(444.2)	(187.9)
Profit (loss) from discontinued operations, after tax		0.0	0.0	0.0
Profit for the period		1,288.1	1,122.3	814.4
Minority interests		(238.1)	(118.2)	(83.8)
Attributable to owners of the parent		1,050.0	1,004.1	730.6
Basic earnings per share (in €)		1.67	1.59	1.11
Diluted earnings per share (in €)		1.67	1.59	1.11

Consolidated statement of income and expense recognised directly in equity

Consolidated statement of income and expense recognised directly in equity – 2010

In € millions	Equity attributable to owners of the parent	Minority interests	Total equity
Profit for the period	1,050.0	238.1	1,288.1
Gains and losses recognised directly in equity Available-for-sale financial assets
Change in revaluation reserve during the period	(2,176.9)	(80.5)	(2,257.4)
Reclassification of proceeds from disposals	(586.9)	(13.9)	(600.8)
Reclassification of impairment losses to profit or loss	376.1	6.6	382.7
Sub-total including deferred participation and deferred taxes	(2,387.8)	(87.8)	(2,475.5)
Deferred participation including deferred taxes	2,103.1	43.4	2,146.5
Deferred taxes	154.5	11.5	166.0
Sub-total net of deferred participation and deferred taxes	(130.2)	(32.9)	(163.1)
Translation differences	101.9	49.5	151.5
Actuarial gains and losses	(7.1)	0.0	(7.1)
Other movements	(9.8)	(1.2)	(11.1)
Total income and expense recognised directly in equity	(45.2)	15.4	(29.8)
Net income and expense recognised directly in equity	1,004.8	253.5	1,258.3

Consolidated statement of income and expense recognised directly in equity – 2009

In € millions	Equity attributable to owners of the parent	Minority interests	Total equity
Profit for the period	1,004.1	118.2	1,122.3
Gains and losses recognised directly in equity Available-for-sale financial assets
Change in revaluation reserve during the period	8,729.6	82.8	8,812.5
Reclassification of proceeds from disposals	(987.8)	(7.0)	(994.9)
Reclassification of impairment losses to profit or loss	570.2	9.3	579.4
Sub-total including deferred participation and deferred taxes	8,312.0	85.0	8,397.0
Deferred participation including deferred taxes	(6,985.6)	(38.3)	(7,023.9)
Deferred taxes	(492.6)	(14.5)	(507.1)
Sub-total net of deferred participation and deferred taxes	833.8	32.2	866.0
Translation differences	181.4	115.2	296.6
Actuarial gains and losses	(2.8)	(0.1)	(2.8)
Other movements	(9.7)	1.7	(8.0)
Total income and expense recognised directly in equity	1,002.7	149.1	1,151.8

Net income and expense recognised directly in equity	2,006.8	267.3	2,274.1

Consolidated statement of income and expense recognised directly in equity – 2008

Net income and expense recognised directly in equity	(870.6)	(19.2)	(889.8)
Total income and expense recognised directly in equity	(1,601.2)	(103.0)	(1,704.2)
Other movements	(2.2)	0.0	(2.2)
Actuarial gains and losses	(5.8)	0.0	(5.8)
Translation differences	(117.4)	(83.2)	(200.6)
Sub-total net of deferred participation and deferred taxes	(1,475.8)	(19.8)	(1,495.6)
Deferred taxes	773.7	8.9	782.7
Deferred participation including deferred taxes	4,259.0	(2.5)	4,256.4
Sub-total including deferred participation and deferred taxes	(6,508.5)	(26.2)	(6,534.7)
Reclassification of impairment losses to profit or loss	3,323.9	2.3	3,326.2
Reclassification of proceeds from disposals	(1,359.1)	1.1	(1,358.0)
Change in revaluation reserve during the period	(8,473.3)	(29.6)	(8,502.9)
Available-for-sale financial assets
Gains and losses recognised directly in equity
Profit for the period	730.6	83.8	814.4
In € millions	the parent
	to owners of	interests	equity
	attributable	Minority	Total
	Equity

Consolidated statement of changes in equity

Consolidated statement of changes in equity – 2010

Attributable to owners of the parent
In € millions	Share capital	Share premium account	Revalu ation reserve	Deeply subordinated debt	Retained earnings and profit	Transla tion reserve	Equity attribu-table to owners of the parent	Minority interests	Total equity
Adjusted equity at
1 Jan. 2010 – IFRS Net income and	594.2	981.5	1,332.7	2,143.0	6,324.0	172.9	11,548.3	877.1	12,425.5
unrealised and
deferred gains and
losses for the period			(130.2)		1,033.1	101.9	1,004.8	253.5	1,258.3
- Dividends paid					(444.0)		(444.0)	(132.9)	(576.9)
- Issue of shares							0.0		0.0
- Deeply
subordinated debt,
net of tax - Treasury shares,				(1.3)	(60.6)		(61.9)		(61.9)
net of tax					(4.0)		(4.0)		(4.0)
- Changes in scope
of consolidation			(3.0)		1.4		(1.6)	89.8	88.1
- Other movements *							0.0	48.9	48.9
Equity at 31 Dec. 2010	594.2	981.5	1,199.5	2,141.8	6,849.8	274.8	12,041.7	1,136.4	13,178.0

(*) Other movements in minority interests include shares issued by CNP UniCredit Vita for an amount of €48.9 million.

Consolidated statement of changes in equity – 2009

In € millions	Share capital	Share premium account	Revaluation reserve	Deeply subordinated debt	Retained earnings and profit	Translation reserve	Equity attributable to owners of the parent	Minority interests	Total equity
Adjusted equity at 1 Jan. 2009 – IFRS	594.2	981.5	496.8	2,143.0	5,830.9	(8.4)	10,037.9	562.0	10,599.9
Net income and unrealised and deferred gains and losses for the period			833.8		991.6	181.4	2,006.8	267.3	2,274.1
- Dividends paid - Issue of shares - Deeply-subordinated					(421.8)		(421.8)	(98.2)	(520.0)
debt, net of tax - Treasury shares, net					(63.0)		(63.0)		-63.0
of tax - Changes in scope of consolidation			2.1		6.9 0.2		6.9 2.4	83.2	6.9 85.6
- Other movements *					(20.9)		(20.9)	62.9	42.0
Equity at 31 Dec. 2009	594.2	981.5	1,332.7	2,143.0	6,324.0	172.9	11,548.3	877.1	12,425.5

(*) Other movements in minority interests include shares issued by CNP UniCredit Vita for an amount of €57 million.

Attributable to owners of the parent
In € millions	Share capital	Share premium account	Revaluation reserve	Deeply subordinated debt	Retained earnings and profit	Translation reserve	Equity attributable to owners of the parent	Minority interests	Total equity
Adjusted equity at
1 Jan. 2008 – IFRS	594.2	981.5	1,972.6	2,143.0	5,605.0	109.0	11,405.3		566.9 11,972.2
Net income and
unrealised and
deferred gains and losses for the period			(1,475.8)		722.6	(117.4)	(870.6)	(19.2)	(889.8)
- Dividends paid					(422.3)		(422.3)	(38.0)	(460.3)
- Issue of shares							0.0		0.0
- Deeply-subordinated
debt, net of tax					(71.5)		(71.5)		(71.5)
- Treasury shares, net
of tax					(12.0)		(12.0)		(12.0)
- Changes in scope of
consolidation					2.6		2.6	46.0	48.7
- Other movements					6.2		6.2	6.2	12.4
Equity at 31 Dec. 2008	594.2	981.5	496.8	2,143.0	5,830.7	(8.4)	10,037.8		562.0 10,599.7

Consolidated statement of cash flows

The statement of cash flows includes:

• cash flows of fully-consolidated companies;
• the Group's proportionate share of the cash flows of jointly-controlled entities consolidated by the proportionate method;
• cash flows arising from Group investments, dividends and other transactions with associates or jointly-controlled entities accounted for by the equity method.

Definition of cash and cash equivalents

Cash and cash equivalents are short-term, highly liquid investments (sight deposits and other instruments) that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value.

They include units in "ordinary" money market funds but do not include units in dynamic funds that are highly sensitive to changes in market prices, in accordance with the guidelines of the French securities regulator (AMF).

Cash and cash equivalents reported in the statement of cash flows are stated net of bank overdrafts used for cash management purposes.

Definition of cash flows from operating activities

Cash flows from operating activities correspond essentially to the cash flows of the Group's revenue-generating activities.

Definition of cash flows from investing activities

Cash flows from investing activities correspond to cash flows from purchases and sales of investment property and securities, operating property and equipment and intangible assets.

Definition of cash flows from financing activities

Cash flows from financing activities correspond to all cash flows leading to a change in the amount and components of equity and financing liabilities, as follows:

• share issues and cancellations;
• debt issues and repayments;
• purchases and sales of treasury stock;
• dividends paid to owners of the parent and minority shareholders of subsidiaries.

Reconciliation of cash and cash equivalents reported in the balance sheet and in the statement of cash flows

In € millions	31/12/2010	31/12/2009	31/12/2008
Cash and cash equivalents (reported in the balance sheet)	787.5	1,138.8	1,257.7
Cash and cash equivalents relating to assets held for sale	0.0	12.3	0.0
Operating liabilities due to banks	(273.2)	(5.4)	(6.7)
Securities held for trading	4,597.1	9,159.0	7,518.9
Total (reported in consolidated statement of cash flows)	5,111.3	10,304.7	8,769.9

Cash and cash equivalents reported in the statement of cash flows correspond to:

• cash and cash equivalents reported in the balance sheet under assets;
• operating liabilities due to banks: correspond to short-term bank loans and overdrafts other than financing liabilities, reported in the balance sheet under liabilities;
• securities held for trading: consist of money market mutual funds reported in the balance sheet under "Insurance investments";
• * Pending Auditor Approval 12/129

In € millions	31/12/2010	31/12/2009	31/12/2008
Operating profit before tax	1,425.3	1,724.3	1,081.7
Gains on sales of investments, net	(588.8)	(1,414.1)	(1,513.4)
Depreciation and amortisation expense, net	101.5	222.8	85.4
Change in deferred acquisition costs	(37.7)	(51.4)	(1.1)
Impairment losses, net	224.9	210.6	3,005.6
Charges to technical reserves for insurance and financial liabilities	16,995.9	21,003.7	1,087.9
Charges to provisions, net	36.4	(197.4)	225.4
Change in fair value of financial instruments at fair value through profit (other than cash and cash equivalents)	(1,160.0)	(3,986.8)	10,770.8
Other adjustments	(420.0)	618.4	(768.7)
Total adjustments	15,152.1	16,405.8	12,891.9
Change in operating receivables and payables	(861.3)	1,260.0	(1,830.4)
Change in securities sold and purchased under repurchase and resale agreements	415.0	(1,542.0)	714.6
Change in other assets and liabilities	(40.5)	33.3	(22.1)
Income taxes paid, net of reimbursements	(594.5)	(555.7)	(424.2)
Net cash provided by operating activities	15,496.1	17,325.7	12,411.5
Acquisitions of subsidiaries and joint ventures, net of cash acquired	0.0	(7.9)	(77.6)
Divestments of subsidiaries and joint ventures, net of cash sold (1)	102.3	692.0	0.0
Acquisitions of associates	0.0	0.0	0.0
Divestments of associates	0.0	0.0	0.0
Net cash (used) provided by divestments and acquisitions	102.3	684.1	(77.6)
Proceeds from the sale of financial assets	402,664.4	403,523.7	194,627.7
Proceeds from the sale of investment properties	64.8	571.8	190.7
Proceeds from the sale of other investments	7.4	12.1	16.4
Net cash provided by sales and redemptions of investments	402,736.5	404,107.5	194,834.7
Acquisitions of financial assets	(423,000.4)	(419,413.4)	(202,713.6)
Acquisitions of investment properties	(17.0)	(68.2)	(265.9)
Acquisitions and/or issuance of other investments	(0.9)	0.0	0.0
Net cash used by acquisitions of investments	(423,018.3)	(419,481.6)	(202,979.4)
Proceeds from the sale of property and equipment and intangible assets	0.6	1.3	5.4
Purchases of property and equipment and intangible assets	(105.4)	(47.3)	(40.9)
Net cash used by sales and purchases of property and equipment and intangible assets	(104.8)	(45.9)	(35.5)
Net cash used by investing activities	(20,284.2)	(14,735.9)	(8,257.8)
Issuance of equity instruments (2)	48.9	57.0	0.0
Redemption of equity instruments	0.0	0.0	0.0
Purchases and sales of treasury shares	(6.3)	8.6	(12.9)
Dividends paid	(576.9)	(520.0)	(460.3)
Net cash used by transactions with shareholders	(534.3)	(454.4)	(473.2)
New borrowings (3)	750.1	49.1	0.0
Repayments of borrowings	(7.5)	(426.9)	(53.4)

Interest paid on borrowings	(189.6)	(184.7)	(217.5)
Net cash (used) provided by other financing activities	553.0	(562.5)	(270.9)
Net cash (used) provided by financing activities	18.7	(1,016.9)	(744.0)
Cash and cash equivalents at beginning of period	10,304.7	8,769.9	5,057.3
Net cash provided by operating activities	15,496.1	17,325.7	12,411.5
Net cash used by investing activities	(20,284.2)	(14,735.9)	(8,257.8)
Net cash (used) provided by financing activities	18.7	(1,016.9)	(744.0)
Effect of changes in exchange rates	(19.9)	4.9	(0.6)
Effect of changes in accounting policies and other (4)	(404.0)	(43.1)	303.6
Cash and cash equivalents at the reporting date	5,111.3	10,304.7	8,769.9

(1) Sale of Portuguese subsidiaries for an amount of €102.3 million (sale price of €114.6 million, net of €12.3 million in cash sold).

(2) 42.5% stake in the CNP UniCredit Vita share issue of €115 million.

(3) Subordinated notes issued by CNP Assurances for an amount of €750 million.

(4) Correction of CNP Vida's opening cash balance for €420.5 million (reclassified from "Cash and cash equivalents" to "Loans and receivables") and another insignificant impact of €16.5 million on opening cash balance.

Notes to the consolidated financial statements

Note 1. Significant events of the year

1.1 Finalisation of the sale of the stake in Global Seguros

After obtaining the requisite regulatory approvals, on 3 March 2010, CNP Assurances finalised the sale of its 83.52% stake in Global – Companhia de Seguros S.A. and its 83.57% stake in Global Vida - Companhia de Seguros de Vida, S.A. (together Global Seguros), to Rentipar Seguros SGPS. The sale was carried out for total final consideration of €114.6 million, and the two companies were valued at €137.2 million (based on 100% of the share capital). The transaction generated a capital gain of €30 million net of tax for CNP Assurances.

Following the recent partnerships signed with Barclay's Bank Plc in Spain, Portugal and Italy and with Marfin Popular Bank in Greece and Cyprus, this transaction completes CNP Assurances' refocusing in Southern Europe on its bancassurance core business.

1.2 Recognition of the acquisition of Barclays Vida y Pensiones

CNP Assurances prepared an opening balance sheet at 31 August 2009 in respect of its acquisition, based on provisional data. This balance sheet was included in the financial statements at 31 December 2009. Since that date, CNP Assurances has allocated goodwill (see Note 5.2) to:

• the value of in-force business acquired, in an amount of €50.7 million before tax (€36.2 million net of tax);
• the value of the distribution agreement, in an amount of €90.1 million before tax (€64.3 million net of tax), relating to future business; and
• residual goodwill, in an amount of €60 million.

1.3 Issuance of subordinated debt

On 14 September 2010, CNP Assurances issued €750 million worth of subordinated notes due 14 September 2040, with an initial early redemption option at par on 14 September 2020.

The notes will pay interest at a fixed rate of 6% until 2020. Thereinafter, they will pay interest at a variable rate with a 100 basis point step-up.

The subordinated notes have been included in financing liabilities in the consolidated balance sheet due to the contractual obligation to pay interest and repay the nominal amount at maturity, i.e., 14 September 2040.

1.4 Tax reform concerning the capitalisation reserve

French insurers must set up a capitalisation reserve in their statutory accounts in order to state returns from bonds independently of any capital gains or losses realised. It is either debited with capital gains realised on the sale of bonds or – in the event that capital losses are generated on this type of asset – credited by a matching amount. Until 1 January 2010, this reserve was exempt from tax.

The 2011 Finance Act published on 31 December 2010, introduced a one-off tax of 10% on all net-of-tax amounts included in the capitalisation reserve by insurers at 1 January 2010. Any amounts taxed accordingly will not be taxable if they are subsequently reversed from the reserve. Any amounts booked to, or reversed from the capitalisation reserve after 1 January 2010 will be taxable or deductible immediately in profit. This one-off tax was booked as a liability at 31 December 2010. Half of the amount due will be paid when CNP Assurances files its tax return and the other half will be paid within a sixteen-month period.

The capitalization reserve does not exist in the consolidated financial statements under IFRS and any capital gains or losses realised on the disposal of bonds are recognised in profit. The elimination of the capitalisation reserve in IFRS through 1 January 2010 generated deferred taxation at a rate of 34.43%.

This tax reform generated income of €402 million in the consolidated financial statements at 31 December 2010 as follows:

• income tax expense of €163 million corresponding to the one-off tax on French entities' share of the capitalisation reserve on 1 January 2010;
• a deferred tax income of €565 million corresponding to the reversal of the deferred tax liabilities previously recognised in this balance.

1.5 Consequences of the legislation to reform the French pension system

French Act No. 2010-1330 of 9 November 2010 raises the retirement age from 60 to 62. It also extends the benefit entitlement period for incapacitated persons from 60 to 62 where the insurance policy provides for the payment of benefits up to retirement age.

Article 26 of this Act amends the Evin Law of 31 December 1989 to allow insurers to defer the corresponding increase in provisions for such contracts in force on the date on which the law was promulgated over a maximum period of six years, beginning in the statutory accounts prepared for the 2010 financial year. In the event of termination, an amount equal to the difference between the technical reserves necessary to cover the insurer's obligations in full and the amount of technical reserves actually set aside at the termination date is payable by the policyholder.

Without deferral under IFRS, the increase in technical reserves was recognised in the consolidated financial statements in an amount of €198 million, before tax and reinsurance.

The Group recognised the entitlement to a termination payment as an intangible asset in the consolidated financial statements in an amount of €161.9 million, before tax and reinsurance.

In guidance published on 3 February 2011, the Autorité des Normes Comptables (ANC - French Accounting Standard Authority) recommended that terminated contracts should be excluded from the deferral provision of Article 26 and that, in view of its legal basis, the accounting treatment of the deferral in the Company financial statements may be transposed to the consolidated financial statements.

In view of the Group's initial decision not to defer terminated contracts and to recognise an intangible asset, these recommendations have no impact on the income statement and only a non-material impact on balance sheet presentation which will be considered for the next reporting date.

1.6 Structural partnership with MFPrévoyance SA

CNP Assurances and MFP Services, a group of mutual insurers serving national and local government employees, wish to deepen their ties through a new partnership structure designed to develop a personal risk insurance offering. On 3 November 2010, CNP Assurances paid a total of €86.5 million to acquire 65% of MFPrévoyance SA.

Due to the marginal importance of this subsidiary in the Group's balance sheet and consolidated profit, MFPrévoyance was not consolidated at 31 December 2010.

1.7 CNP Assurances Annual General Meeting

The Group's Annual General Meeting of 25 May 2010 approved a four-for-one stock split. The stock split was effective 5 July 2010, and on the morning of 6 July, the Company's share capital comprised 594,151,292 shares, with a par value of €1 each.

Note 2. Subsequent events

No material changes have occurred in the Group's financial or commercial position between the end of the period and the date on which the financial statements were approved by the Board of Directors.

Note 3. Summary of significant accounting policies

CNP Assurances, the parent company of the Group, is a société anonyme (public limited company) with a Board of Directors, governed by the French Insurance Code. It has fully paid-up share capital of €594,151,292. The Company is registered in the Paris Trade and Companies Register under no. 341 737 062.

The registered office is located at 4, place Raoul-Dautry, 75015 Paris.

The Group's principal business is the writing of personal insurance. CNP Assurances' corporate purpose is to:

• write life and endowment insurance;
• write bodily injury insurance covering accident and health risks;
• hold majority interests in insurance companies.

The consolidated financial statements for the year ended 31 December 2010 include the financial statements of the Company and its subsidiaries, as well as the Group's interests in the results and net assets of jointly-controlled entities and associates. They were approved by the Board of Directors on 22 February 2011.

3.1 Statement of compliance

In accordance with EU Directive 1606/2002/EC of 19 July 2002, the consolidated financial statements have been prepared in accordance with the IFRSs adopted by the European Union before 31 December 2010.

The subsidiaries all apply Group accounting policies, as presented in these notes.

New accounting standards effective since 1 January 2010

Application of the standards, amendments and interpretations listed below from 1 January 2010, did not have any material impact on the consolidated financial statements.

• Revised IFRS 3 – Business Combinations, and the related revisions to IAS 27 – Consolidated and Separate Financial Statements, published on 10 January 2008 and applicable for accounting periods beginning on or after 1 July 2009, represent the second phase of the IASB's project to review the accounting treatment of business combinations. Revised IFRS 3 introduces certain changes in the accounting treatment of business combinations that may impact the amount of goodwill recognised, or the amount of profit in the acquisition period or in subsequent periods. The related revisions to IAS 27 require that a change in the interest held in a subsidiary must be accounted for as an equity transaction and no impact is recognised in goodwill or in profit. They also introduce changes in the accounting treatment of losses generated by subsidiaries and of the loss of control of a subsidiary. The Group has applied these revised standards on a prospective basis to new acquisitions and disposals from 1 January 2010. Since no transactions falling within the scope of IFRS 3 or IAS 27 were carried out during the year, the revised standards have no impact on the consolidated financial statements for the year ended 31 December 2010.

• The annual improvements to IFRS include minor amendments presented together in a single document rather than as a series of isolated amendments. The amendments published on 16 April 2009 are generally effective for accounting periods beginning on or after 1 January 2010, unless otherwise specified, and they do not have a material impact on the Group's consolidated financial statements.

• IFRIC 17 – Distribution of Non-cash Assets to Owners, and IFRIC 18 – Transfers of Assets from Customers, have no impact on the consolidated financial statements.

• The amendment to IAS 39 – Financial Instruments: Recognition and Measurement, for eligible hedged items, published on 31 July 2008, clarifies applicable policies for hedge accounting. Because the Group does not apply hedge accounting principles, this amendment has no impact on the consolidated financial statements.

Main accounting standards and interpretations approved by the European Union but not yet in force

• Revised IAS 24 – Related Party Disclosures, as published on 4 November 2009 and effective for annual accounting periods beginning on or after 1 January 2011 (earlier application is permitted), simplifies the disclosure requirements for governmentrelated entities and clarifies the definition of a related party. These amendments are not expected to have a material impact on the Group's consolidated financial statements.

• IFRIC 19 – Extinguishing Financial Liabilities with Equity Instruments, published on 26 November 2009 and applicable for accounting periods beginning on or after 1 July 2010 (early adoption is allowed), clarifies the accounting treatment applicable when an entity renegotiates the terms of a financial liability with a creditor and the creditor agrees to accept shares or other equity instruments to extinguish all or part of a financial liability. This interpretation, which recommends that the equity interests issued should be measured at fair value and any difference between the carrying amount of the financial liability extinguished and the equity instruments issued should be recognised in profit or loss, is not expected to have a material impact on the Group's consolidated financial statements.

• The amendment to IAS 32 – Financial Instruments: Presentation, concerning the Classification of Rights Issues, published on 8 October 2009, clarifies the accounting treatment of certain rights issues denominated in a currency other than the issuer's functional currency. When rights are issued pro rata to the existing owners against a fixed amount of cash, they are equity instruments even if the exercise price of the rights issue is fixed in a currency that is not the entity's functional currency. This amendment is not expected to have a material impact on the Group's consolidated financial statements.

• Amendment to IFRIC 14 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction, published on 26 November 2009 deals with cases where an entity makes voluntary prepaid contributions and there is a minimum funding requirement. The amendment states that the advantage accruing from this type of payment must be recognised as an asset. This amendment is not expected to have a material impact on the Group's consolidated financial statements.

Accounting standards and interpretations published but not yet in force

• IFRS 9 – Financial Instruments, republished on 28 October 2010 and applicable for accounting periods beginning on or after 1 January 2013, consolidates the first of the three phases involved in replacing IAS 39.

It uses a standard approach to determine whether a financial asset should be measured at amortised cost or fair value.

A financial asset is measured at amortised cost if a) the instrument is held within a business model whose objective is to hold assets in order to collect contractual cash flows, and b) if the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. On initial recognition of a financial asset, an entity may designate the asset as measured at fair value through profit if doing so eliminates or significantly reduces a mismatch. An entity may also make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is not held for trading (including realised gains and losses). However, dividends received from such investments are to be recognised in profit.

If the fair value option is applied, IFRS 9 provides guidance on the amount of change in the fair value that is attributable to changes in the credit risk of a financial liability.

As IFRS 9 has not yet been adopted by the European Union, it is not yet available for early application. The effective date of IFRS 9, including its various phases (phases II and III concerning impairment of financial instruments at amortised cost and hedge accounting), methodology and impact, are currently being studied by the Group.

• Amendment to IAS 12 – Income Taxes, published on 20 December 2010 and applicable for accounting periods beginning on or after 1 January 2012, introduces a presumption that recovery of the carrying amount of an asset will normally be through sale unless the entity provides proof that recovery will be by another means. This presumption applies specifically to investment property at fair value and property and equipment and intangible assets measured using the revaluation model. This amendment is not expected to have a material impact on the Group's consolidated financial statements.

• Amendment to IFRS 7 – Financial Instruments Disclosures, published on 7 October 2010 and applicable for accounting periods beginning on or after 1 July 2012. The amendment will enhance disclosure and understanding of any transfer transactions of financial assets.

• The annual improvements to IFRS, as published on 6 May 2010, include amendments to six standards and an interpretation. These amendments are generally effective for accounting periods beginning on or after 1 January 2011, unless otherwise specified. They are not expected to have a material impact on the Group's consolidated financial statements.

3.2 Basis of preparation of the consolidated financial statements

The consolidated financial statements are presented in millions of euros, rounded up or down to the nearest decimal.

They have been prepared according to the cost model, except for (i) insurance assets and liabilities and assets and liabilities related to investment contracts with a discretionary participation feature which have been measured by the methods used in the French GAAP accounts and (ii) the following assets and liabilities which have been measured by the fair value model: financial assets at fair value through profit (financial assets held for trading and financial assets designated upon initial recognition as at fair value through profit), available-for-sale financial assets, investment property held in unit-linked portfolios and derivative instruments separated from their host contracts.

Non-current assets and groups of assets held for sale are measured at the lower of their carrying amount and their fair value less costs to sell, with the exception of deferred tax assets, assets generated by employee benefits, financial assets, investment property measured at fair value, biological assets and assets arising under insurance contracts, all of which are measured using their own specific valuation basis.

The preparation of financial statements in accordance with IFRSs requires the use of estimates and assumptions that have an impact on the application of accounting policies and on the reported amounts of assets and liabilities, income and expenses. The main balance sheet headings concerned by such estimates and assumptions include goodwill (particularly with regard to impairment testing), the value of business in force acquired, assets measured at fair value not quoted in an active market, insurance-related assets and liabilities (technical reserves, deferred participation assets and deferred participation reserves) and deferred taxes.

These estimates and the underlying assumptions are based on past experience, regulatory information, generally accepted actuarial principles and other factors considered reasonable under the circumstances.

They serve as the basis for the exercise of judgement in determining the carrying amounts of assets and liabilities which cannot be obtained directly from other sources. Actual values may be different from these estimates. Estimates and the underlying assumptions are reviewed at regular intervals.

The effect of changes in accounting estimates are recognised in the period in which the change occurs.

The accounting policies described below have been applied consistently to all periods presented in the consolidated financial statements.

They have been applied uniformly by all Group entities.

3.3 Basis of consolidation

The consolidated financial statements include the financial statements of subsidiaries, jointly-controlled entities and associates.

Subsidiaries

A subsidiary is an entity controlled by the Company. Control is defined as the power to govern the subsidiary's financial and operating policies, directly or indirectly, so as to obtain benefits from its activities. Exclusive control is considered as being exercised when the Company holds more than half of the subsidiary's voting rights, directly or indirectly. All of the contractual conditions of the shareholder agreement, particularly partnership agreements for the distribution of insurance products, are also considered. To determine whether control is exercised, account is taken of the existence and effect of potential voting rights that are currently exercisable or convertible. Subsidiaries are fully consolidated.

New subsidiaries are consolidated from the date when control is acquired. Divested subsidiaries are consolidated up to the date when control is relinquished.

Jointly-controlled entities (joint ventures)

A joint venture is a contractual arrangement whereby the Group and one or more other parties undertake an economic activity that is subject to joint control. Joint control is the contractually agreed sharing of control over an economic activity, requiring the consent of all the venturers to strategic financial and operating decisions that are essential to the goals of the joint venture.

Interests in joint ventures are recognised using proportionate consolidation, which consists of combining the Group's share of each of the assets, liabilities, income and expenses of the jointly controlled entity with the similar items, line by line, in its financial statements.

Associates

An associate is an entity over which the Group has significant influence. Significant influence is defined as the power to participate in the financial and operating policy decisions of the associate.

It is presumed to be exercised when the Group holds at least 20% of the associate's voting rights, directly or indirectly. However, this is only one of the yardsticks used, and the existence or absence of significant influence may be determined on the basis of other factors, regardless of the percentage of voting rights held. Other indicators of significant influence include representation on the board of directors or equivalent governing body of the associate and material transactions between CNP Assurances and the associate.

The consolidated financial statements include the Group's share of the net assets and profits of associates, recognised by the equity method, from or up to the date when the Group exercises or ceases to exercise significant influence.

If the Group's share of an associate's losses is equal to or greater than the carrying amount of its investment in the entity concerned, the investment is reduced to zero and recognition of the Group's share of future losses is discontinued, unless the Group has incurred legal or constructive obligations to bear a portion of future losses or to make payments on behalf of the associate.

3.4 Intragroup transactions

All material intragroup balances, transactions, income and expenses are eliminated in full. Income and expenses from transactions with associates and joint ventures should be eliminated based on the Group's share of the entity's profit. Losses resulting from the impairment in value of an asset transferred in an intragroup transaction are not eliminated.

3.5 Deferred policyholders'participation asset/reserve

The adjustments made in application of IFRS 4 lead to the recognition of deferred policyholders' participation in liabilities. There are two types of deferred participation:

3.5.1 Unconditional participation

All differences in the calculation base of future rights between the separate financial statements and the consolidated financial statements are recognised in the deferred participation reserve.

This applies in particular to policyholder rights in positive and negative fair value adjustments and restatements of the separate financial statements of Group entities. Their amount is adjusted using a method that is consistent with the initial measurement and the pattern of recognition in profit of fair value adjustments and restatements.

3.5.2 Conditional participation

This corresponds to the difference in rights between the separate and consolidated financial statements, whose payment depends on a management decision or the occurrence of an event.

These rights are recognised only when the event or management decision is highly probable. Conditional participation also arises from the application of the shadow accounting technique described in Note 3.13.2.

3.6 Foreign currency translation

The functional currency of subsidiaries, in which the majority of transactions are denominated, is their local currency.

Assets and liabilities of foreign operations – mainly foreign subsidiaries and independent branches – including goodwill and fair value adjustments recorded on consolidation, are translated into euros at the closing exchange rate.

Income and expenses of foreign operations, other than entities operating in a hyperinflationary economy, are translated at the exchange rate on the transaction date. For practical reasons, the average exchange rate for the period is used as the rate on the transaction date for currencies that have been subject to only limited fluctuations during the period.

3.7 Foreign currency transactions

Foreign currency transactions are recognised and measured in accordance with IAS 21 – The Effects of Changes in Foreign Exchange Rates.

In accordance with IAS 21, foreign currency transactions are translated into the entity's functional currency at the exchange rate on the transaction date. For practical reasons, in certain cases the average exchange rate for the period is used as the rate on the transaction date for currencies that have been subject to only limited fluctuations during the period.

At each reporting date, monetary balance sheet items are translated using the closing rate, and the resulting exchange differences are recognised in profit.

Non-monetary assets and liabilities measured using the cost model are translated into euros at the exchange rate on the transaction date, while non-monetary assets and liabilities measured using the fair value model are translated at the exchange rate on the date of remeasurement at fair value. When a gain or loss on a non-monetary item is recognised directly in equity, the difference arising on translation of the item is also recognised in equity. Similarly, when a gain or loss on a nonmonetary item is recognised directly in profit, the translation difference is also recognised in profit.

Derivative instruments designated as hedges of currency risks on foreign currency transactions are recognised in the balance sheet and measured at fair value.

3.8 Business combinations and other changes in scope of consolidation

Business combinations in which the Group acquires control of one or more businesses are recognised using the purchase method.

Business combinations carried out prior to 1 January 2010 are recognised in accordance with the accounting principles used to prepare the financial statements for the year ended 31 December 2009. Minority interests (also known as non-controlling interests) are measured at the Group's proportionate share in the acquiree's net revalued assets, while adjustments to contingent consideration are treated as an adjustment to the cost of the combination.

Business combinations that take place after 1 January 2010 are recognised and measured in accordance with the revised IFRS 3. Consideration transferred (acquisition cost) is measured at the acquisition-date fair value of the assets transferred, liabilities incurred and equity interests issued by the buyer. The acquiree's identifiable assets and liabilities are measured at fair value at the acquisition date. Costs directly attributable to the business combination are expensed as incurred.

Any excess of the consideration transferred over the Group's proportionate share in the net fair value of the acquiree's identifiable assets and liabilities is recognised as goodwill.

The Group can choose to measure its minority interests at fair value. In this case, goodwill is calculated on the basis of all identifiable assets and liabilities (full goodwill method).

Goodwill is calculated at the date control is obtained and is not adjusted after the end of the measurement period. No additional goodwill is recognised on subsequent acquisitions of minority interests.

Acquisitions and disposals of minority interests are recognised directly in equity.

If the consideration transferred is lower than the Group's proportionate share in the net assets of the acquiree measured at fair value, the difference is recognised directly in profit for the period.

The initial accounting for a business combination must be completed within 12 months of the acquisition date. This timeline applies to the measurement of identifiable assets and liabilities, consideration transferred and minority interests. In principle, any adjustments made after the measurement period affecting financial assets or liabilities are recognised in profit.

3.9 Intangible assets

3.9.1 Goodwill

Goodwill is equal to the difference between the acquisition cost to the buyer and the fair value of these identifiable assets and liabilities. Negative goodwill is recognised directly in profit.

Positive goodwill is:

• recognised in intangible assets when it arises on the acquisition of entities consolidated by the full-consolidation or proportionate methods;
• included in investments in associates when it arises on the acquisition of an entity accounted for by the equity method;
• recognised in the local currency of the acquiree and translated into euros at the closing exchange rate when it arises on the acquisition of a foreign entity (outside the euro zone).

For impairment testing purposes, goodwill is allocated to cash-generating units (CGUs) or groups of CGUs likely to benefit from the synergies developed within the scope of the business combination resulting from the acquisition. A cash-generating unit is defined as the smallest group of identifiable assets that generates cash inflows that are largely independent of the cash inflows of other assets or groups of assets. The Group identifies CGUs by entity or group of similar entities.

When goodwill is positive, it is stated in the balance sheet at cost less any accumulated impairment losses. It is no longer amortised but tested for impairment:

• each year on the same date, usually close to the reporting date;
• or more frequently if events or changing market conditions indicate that it may be impaired since it was last tested for impairment;
• or at the end of a period in which an acquisition has taken place if there is a marked deterioration in the business environment.

An impairment loss is recognised if the recoverable amount of the CGU to which the goodwill has been allocated is less than its carrying amount. The recoverable amount is defined as the higher of its fair value less costs to sell and value in use.

The Group usually calculates value in use as the net asset value of the CGU plus the present value of expected future revenues from existing portfolios and new business.

Expected future cash flows are based on the assumption that the business will continue over the long-term and that relations with banking partners will be pursued beyond the renewal date of current agreements, as well as on forecasts that have been validated by the Board of Directors and extrapolated in line with the growth rates generally used within the industry for the businesses concerned, and using conservatively estimated discount rates in line with the average weighted cost of capital.

3.9.2 Life insurance portfolios

The fair value of insurance contracts and financial instruments with a discretionary participation feature acquired in a business combination or a separate transaction is split into two components, as follows:

• a liability measured in accordance with the Group's accounting policies for insurance contracts and financial instruments with a discretionary participation feature;
• an intangible asset ("Value of business in force") representing the difference between the fair value of these contracts and the amount described above.

The value of business in force corresponding to purchased insurance portfolios, is generally amortised by the effective interest method over the portfolios' remaining life.

3.9.3 Distribution agreements

The value of a distribution agreement represents the future cash flows expected to result from new business relating to a partner network falling within the scope of such an agreement. These intangible assets are estimated based on the terms and conditions specific to each agreement, and are amortised over the term of the agreement taking into account a residual value where appropriate.

3.9.4 Intangible asset related to the reform of the French pension system

Pursuant to Article 26 of French Act No. 2010-1330 of 9 November 2010, dealing with the reform of the French pension system, the insurer is entitled to receive a termination payment. This entitlement has been recognised as an intangible asset in the consolidated financial statements for its recoverable amount of €161.9 million, before tax and reinsurance, and will be amortised over a five-year period (see Note 1.5).

3.9.5 Software

Purchased software licences are recognised as an intangible asset at cost less accumulated amortisation and any accumulated impairment losses.

Directly attributable internal and external costs of developing software for internal use, integrating business applications and evolutive maintenance are capitalised if, and only if, it is probable that they will have the effect of increasing the future economic benefits to be derived from the asset and comply with the other provisions of IAS 38. Costs that do not fulfil the criteria for recognition as an asset are recorded in expenses for the period.

Software licences and development costs are generally amortised over five years.

3.10 Investments

3.10.1 Property company

Investment property is property (land or building) held to earn rentals or for capital appreciation or both, rather than for use in the production or supply of goods or services or for administrative purposes, or for sale in the ordinary course of business.

The Group has elected to measure investment and operating properties using the cost model under IAS 40 and IAS 16, except for properties held in unit-linked portfolios which are measured at fair value.

Details of the fair value of properties measured using the cost model are also disclosed in these notes to the financial statements. Fair value corresponds to the probable realisable value of properties and shares in unlisted property companies. It is determined on the basis of five-year valuations performed by a qualified expert recognised by the French insurance regulator (Autorité de Contrôle Prudentielle - ACP). In the period between two five-year valuations, fair value is estimated at each year-end and the amounts obtained are certified by a qualified expert.

Under the cost model, properties are measured at cost less accumulated depreciation and any accumulated impairment losses.

Borrowing costs directly attributable to acquisition or construction are included in the cost of the asset and expensed once the building is in use.

For the purpose of determining depreciation periods, properties are considered as comprising five significant parts with different useful lives:

• land;
• shell and roof structure;
• facades and roofing;
• fixtures;
• technical installations.

Maintenance costs are added to the cost of the part of the property to which they relate when it is probable that they will generate future economic benefits and they can be measured reliably.

Expenses directly attributable to the purchase of a property are included in its cost and depreciated over the useful life of the shell.

Depreciation

Depreciation is calculated on a straight-line basis to write off the acquisition or construction cost of each significant part of a property over its estimated useful life.

Due to the difficulty of reliably determining the residual value of property, investment and operating properties are considered as having no residual value.

Depreciation periods are based on the estimated useful lives of the significant parts of each property, with the exception of land which is not depreciated. These periods are as follows:

• shell: 50 years;
• facades and roofing: 30 years, except for warehouses, factories, shopping centres and cinemas: 20 years;
• technical installations: 20 years;
• fixtures: 10 years.
• * Pending Auditor Approval 23/129

Impairment

At each period-end, properties are assessed to determine whether there is any indication that they may be impaired. One such indicator is a loss of over 20% of the building's value measured against cost. If any such indicators are found to exist, the recoverable amount of the building in question is estimated.

The recoverable amount of a property is the higher of its value in use and its market price less costs to sell, as determined by annual independent valuations of the Group's entire property portfolio.

3.10.2 Financial assets

Classification

Financial assets are allocated among the following four categories, based on the type of portfolio, the type of financial assets, the specific features of certain financial assets and prioritised application of the criteria defining each category:

• financial assets at fair value through profit, corresponding to assets held for trading and assets designated at the outset as being at fair value through profit in accordance with the fair value option. Financial assets allocated to this category include assets backing unit-linked liabilities, assets with an embedded derivative that is separable from the host contract, assets of consolidated mutual funds and derivative instruments;
• held-to-maturity investments, corresponding to fixed-income securities that the Group has the positive intention and ability to hold to maturity. This classification is applied restrictively to certain bonds, held mainly by Caixa Seguros;
• loans and receivables, corresponding to non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than assets classified as held for trading or available-for-sale;
• available-for-sale financial assets, corresponding to assets that are not held with the firm intention of being sold but which the Group may decide to sell, for example to meet its liquidity needs. This classification is applied to assets not classified in any of the above three categories.

Recognition

Financial assets are recognised in the balance sheet when the Group becomes a party to the contractual provisions of the instrument. Regular way purchases and sales of financial assets are recorded on the transaction date.

Financial assets are initially recognised at fair value. The carrying amount includes directly attributable transaction costs, except in the case of financial assets at fair value through profit.

Derecognition

A financial asset is derecognised when the contractual rights to the cash flows from the financial asset expire or the asset is transferred in a transaction that transfers substantially all the risks and rewards of ownership of the financial asset.

Valuation method

Available-for-sale financial assets and financial assets at fair value through profit are subsequently measured at fair value.

Changes in fair value of available-for-sale financial assets are recognised directly in equity, taking into account the impact on liabilities arising from insurance contracts and financial instruments with DPF (in accordance with the shadow accounting principle, see Note 3.13.2) and the deferred tax effect.

Changes in fair value of financial assets at fair value through profit are recognised directly in profit, taking into account the impact on liabilities arising from insurance contracts and financial instruments with DPF (in accordance with the shadow accounting principle, see Note 3.13.2) and the deferred tax effect.

Loans and receivables and held-to-maturity investments are measured at amortised cost by the effective interest method. Fees and points paid or received, directly attributable transaction costs, and all other premiums or discounts are recognised in the income statement over the expected life of the instrument.

The fair value of financial instruments for which there is no active market is estimated using a valuation technique. Valuation techniques include using recent arm's length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models.

Impairment

Financial assets other than those measured at fair value through profit are tested for impairment at each reporting date. A financial asset has been impaired if there is objective evidence of impairment based on one or a number of events whose impact on the asset's estimated future cash flows may be reliably determined.

Assets measured at amortised cost and debt instruments available for sale

For debt instruments held to maturity or available for sale, an impairment loss related to their fair value is recognised in the income statement if future cash flows are unlikely to be entirely recoverable due to the existence of one or more objective indicators of impairment.

However, downgrading by a rating agency or widening credit spreads do not in themselves constitute objective evidence of impairment.

Available-for-sale equity instruments

At each reporting date, available-for-sale equity instruments are reviewed to determine whether there is any objective evidence that they are impaired. This is considered to be the case when there is:

• a prolonged decline in the fair value: the market price is less than the average carrying amount over the three years preceding the reporting date; or
• a significant decline in fair value: the market price at the reporting date represents less than 50% of the average carrying amount.

When objective evidence of impairment is detected, the cumulative unrealised loss previously recorded directly in equity is recognised in profit.

Moreover, in all cases where these thresholds have not been exceeded but the market price represents less than 70% of the average carrying amount over the previous six months, the Group systematically tests all equity instruments on an asset-byasset basis to ascertain whether or not an impairment loss needs to be recognised.

This approach is based on both the materiality of the decline in the fair value and the intrinsic underlying features of the valuation for each asset.

Any subsequent decline in fair value is recognised in profit as an impairment expense.

A similar method is employed for unlisted variable income securities.

Reversals of impairment losses

* Available-for-sale financial assets

Impairment losses recognised in the income statement on available-for-sale equity instruments are reversed through profit when the instrument is derecognised.

If the fair value of an available-for-sale debt instrument increases in a subsequent period due to new events, the impairment loss is reversed, with the amount of the reversal recognised in profit.

* Loans and receivables, held-to-maturity investments

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed by adjusting the allowance account, provided that the reversal does not result in a carrying amount of the financial asset that exceeds what the amortised cost would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit.

3.10.3 Derivative instruments

A derivative is a financial instrument or other contract within the scope of IAS 39 with all three of the following characteristics: (a) its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable (the "underlying"); (b) it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors; and (c) it is settled at a future date.

Derivative instruments are classified as financial assets at fair value through profit except for instruments designated as hedges whose effectiveness can be demonstrated.

Embedded derivatives are separated from their host contract and recognised as derivative instruments when the following three conditions are met:

• the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract;
• a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative;
• the hybrid (combined) contract is not measured at fair value with changes in fair value recognised in profit or loss.

If the Group is unable to measure the embedded derivative separately either at acquisition or at a subsequent financial reporting date, the entire combined contract is treated as a financial asset or financial liability at fair value through profit.

3.10.4 Measurement of financial assets at fair value

A financial instrument is considered as traded in an active market when quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and these prices represent actual and regularly occurring market transactions conducted on an arm's length basis. The main criterion used in determining whether or not a market is active is how recent the quoted prices actually are.

In the case of financial instruments whose price is not quoted in an active market (i.e., no price is quoted or a price is quoted but the market does not qualify as active, as is the case for certain structured products), fair value prices are estimated using valuation techniques. These are based on:

• prices not freely available provided upon demand by the arrangers, pricing services, or prices provided by an external agency that are freely available but where the market on which the assets are traded is not always active;
• internal models that maximise the use of observable market data to measure financial assets.

For example, for structured products, the Group uses the price provided by the arrangers, unless:

• the Group's own analysis casts doubts on the reliability of said price; or
• it has obtained market prices using an internal model.

Structured products held by the Group consist of financial instruments for which income is indexed to indices, baskets of equities, hedge funds, interest rates and credits. They may also comprise embedded derivatives that can modify the structure of revenues or repayments.

The Group negotiates with each arranger for prices to be quoted every month. These prices correspond to the products' economic value. Their reliability is checked on a test basis and in the case of a significant change, using valuation techniques (for example, discounted cash flow analysis) or by asking the arrangers for details of the methods used. To date, these checks have consistently confirmed the reliability of the prices quoted by the arrangers. The Group checks the quality of the arrangers' valuation methods and issues' ratings and the absence of any credit events.

Structured product valuation principles

The aim of the valuation techniques is to obtain estimated values that approximate the economic value of a position using prices and rates corresponding to the underlying assets or benchmark interest rates. The prices quoted by the arrangers correspond to the estimated amount that a buyer would be willing to pay to purchase the asset. Actual prices could be significantly different from these estimates, due to various factors such as credit spreads, market liquidity, the size of the position, financing costs, and hedging costs and risks.

The valuation techniques used:

• make maximum use of market inputs;
• incorporate all factors that market participants would consider in setting a price; and
• are consistent with accepted economic methodologies for pricing financial instruments.

Fair value hierarchies

The Group uses the following three-level measurement hierarchy for financial instruments (see Note 9.2):

• Level 1: financial instruments measured using quoted prices in active markets. The fair value of most financial instruments

* Pending Auditor Approval 26/129

held by the Group is determined based on the quoted market price, whenever quoted prices are readily and regularly available and represent actual and regularly occurring market transactions conducted on an arm's length basis. The active market for such transactions is the market in which the most recent prices were quoted along with the largest volumes of transactions. The following financial assets are measured at their quoted market price:

• equities, measured on the basis of quoted prices on their reference market,
• mutual funds units, measured at their net asset value,
• bonds, EMTNs, BMTNs: for each instrument, the value is determined based on the most recent of the quoted prices available – on the stock exchange, from brokers, trading rooms or trading platforms, the ICMA Price Service (average prices) or BGN (average prices excluding highs and lows) – taking into account liquidity factors in the choice of market,
• BTAN treasury notes, at the prices quoted under the Banque de France's centralised quotation system,

• derivatives traded on an organised market;

• Level 2: financial instruments measured by standard valuation techniques using mainly observable inputs. These include:

• structured products valued by the Group, arrangers or external valuers,

• investments in unlisted securities,
• OTC derivative contracts,
• money market securities other than BTANs measured based on the zero coupon price curve plus a spread,

• any other quoted financial instrument for which no active market exists;

• Level 3: financial instruments measured using inputs not based on observable market data (unobservable inputs). These are defined as inputs based neither on observable market transactions involving the same instrument at the measurement date, nor on observable market data available at the same date. Very few financial instruments used by the Group fall into this level but it could be used, for example, to classify asset-backed securities. For such instruments, the Group ensures that any change in inputs used for measurement purposes based on reasonable alternative scenarios would not have any material impact on the consolidated financial statements.

3.11 Equity

3.11.1 Components of equity

Equity includes share capital, retained earnings, unrealised gains and losses from remeasurement at fair value of availablefor-sale financial assets net of tax and shadow accounting adjustments, the capitalisation reserve net of tax, and subordinated debt instruments classified in equity due to the discretionary nature of interest payments (see Note 3.16).

3.11.2 Capital management

Under EU insurance directives, the Group is required to comply with certain minimum capital requirements at the level of the Company and of each of its European insurance subsidiaries, as well as at consolidated level.

At 31 December 2010, the insurance subsidiaries and the Group as a whole complied with these minimum solvency capital requirements. Details of the Group's adjusted solvency capital based on the consolidated financial statements are reported each year to the French banking and insurance regulator (Autorité de Contrôle Prudentiel).

The level of solvency capital is monitored regularly by each subsidiary as well as at Group level by the Finance Department. Five-year capital projections are produced using stress scenarios based on extreme conditions in the equity and fixed income markets.

3.12 Treasury shares

Treasury stock, corresponding mainly to shares acquired to stabilise the CNP Assurances share price, are recorded as a deduction from equity in the IFRS accounts. The same treatment is applied to CNP Assurances shares acquired for allocation under employee share grant plans (see Note 3.15.2).

3.13 Insurance and financial liabilities

3.13.1 Contract classification

Contracts recognised and measured in accordance with IFRS 4 include:

• insurance contracts (see definition below) that cover a risk for the insured. Examples include death/disability contracts, pension contracts, property and casualty contracts and unit-linked savings contracts with a guaranteed element;
• financial instruments with a discretionary participation feature (DPF), comprising both non-unit-linked contracts with DPF and unit-linked contracts including a non-unit-linked component with DPF.

Financial instruments without a Discretionary Participation Feature are recognised and measured in accordance with IAS 39. This category corresponds to unit-linked savings contracts that do not have any non-unit-linked component or guaranteed element.

Contracts that do not fulfil the criteria for classification as either insurance contracts (IFRS 4) or financial instruments without DPF (IAS 39) fall within the scope of:

• IAS 18, when they correspond to the provision of services; or
• IAS 19, for contracts taken out in connection with benefit plans in favour of Group employees.

3.13.2 Insurance contracts and financial instruments with DPF

Insurance contracts and financial instruments with DPF are accounted for in accordance with Group accounting policies, as well as with the specific provisions of IFRS 4 concerning shadow accounting and liability adequacy tests. At each period-end, the Group assesses whether its recognised insurance liabilities net of its insurance assets (deferred participation asset plus other insurance-related intangible assets) are adequate, using current estimates of future cash flows under the insurance contracts and financial instruments with DPF.

Insurance contracts

Contracts under which the Group accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder or another beneficiary if a specified uncertain future event (the insured event) adversely affects the policyholder or beneficiary are classified as insurance contracts.

Insurance risk is a risk other than a financial risk. Financial risk is the risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity price, foreign exchange rate, or other variable. In the case of a non-financial variable, if the variable is not specific to a party to the contract, the risk is financial; otherwise it is an insurance risk. Surrender risk, extension risk or the risk of higher-than-expected administrative costs are not insurance risks, unless they are risks originally incurred by the insured that are transferred to the Group under an insurance contract.

For each group of contracts with similar characteristics, the significance of the insurance risk is assessed based on a single representative contract. Under this approach, the insurance risk may be considered significant although the probability of the group of contracts generating a loss that has a material adverse effect on the financial statements is remote due to the pooling of risks.

Financial instruments with DPF

Contracts that do not expose the Group to an insurance risk or for which the insurance risk is not material are qualified as financial instruments when they give rise to a financial asset or liability. Contracts are qualified as financial instruments with DPF when they incorporate a contractual or regulatory entitlement to receive, as a supplement to guaranteed benefits, additional benefits:

• that are likely to be a significant portion of the total contractual benefits;
• whose amount or timing is contractually at the Group's discretion; and
• that are contractually based on the performance of a specified pool of contracts or a specified type of contract, or realised and/or unrealised investment returns on a specified pool of assets held by the Group, or the profit or loss of the company, fund or other entity that issues the contract.

Hybrid contracts

Certain contracts written by the Group comprise both an insurance component and a deposit component. These two components are unbundled only when the deposit component can be measured separately and, under the Group's accounting policies, the rights and obligations arising from the deposit component would not be recognised if the contract was not unbundled. The insurance component of an unbundled contract is accounted for under IFRS 4 and the deposit component under IAS 39.

In line with the policy described above, the components of combined unit-linked and non-unit-linked contracts written by the Group are not unbundled.

> Life insurance and savings contracts

Premiums

Premiums on contracts in force during the period are recognised in revenue after adjustment for:

• the estimated earned portion of premiums not yet written on group contracts comprising whole life cover;
• estimated cancelled premiums, determined by reviewing written premiums and earned premiums not yet written. This adjustment is made for the main products based on the observed cancellation rate for contracts written and cancelled during the period.

Technical and mathematical reserves

Reserves for contracts including whole life cover include the portion of premiums written but not earned during the reporting period.

Mathematical reserves for non-unit-linked contracts correspond to the difference between the present value of the respective commitments of the Group and the policyholder.

Liabilities arising from life insurance contracts are determined using a discount rate that is equal to or less than the conservatively estimated forecast yield on the assets backing the liabilities.

Insurance liabilities are discounted at a rate that is equal to or less than the contractual rate, using regulatory mortality tables or internal experience-based tables if these are more conservative. The discount rate applied to annuities takes into account the effects of a fall in interest rates when the contractual rate is considered too high compared with the expected yield from reinvested premiums.

A general reserve is set up for future contract administration costs not covered by the premium loading or by the fees levied on financial products.

When policyholders are entitled to participate in surplus underwriting profits and investment income in addition to the guaranteed minimum yield, any surplus not paid during the period is accumulated in the policy-holder surplus reserve.

This reserve also includes the deferred policyholders' participation resulting from the use of shadow accounting.

An unexpired risks reserve is set up to cover claims and benefits outstanding at the period-end.

Mathematical reserves for unit-linked contracts are determined by reference to the assets backing the linked liabilities. Gains and losses arising from the remeasurement of these assets at fair value are recognised in profit, to offset the impact of changes in the related technical reserves.

Reserves for guaranteed yields are determined using the Black & Scholes method.

> Disability, accident and health insurance

Premiums are recognised net of taxes and estimated cancelled premiums.

Earned premiums for the period are adjusted for:

• estimated earned premiums not yet written at the period-end;
• the change in the unearned premium reserve (corresponding to the portion of premiums written during the period that relates to the next period).

A reserve is recorded to cover timing differences between the coverage of risks and their financing in the form of insurance premiums.

Claims are recognised in the period in which they are incurred. The amount recorded covers both reported claims and estimated claims incurred but not reported (IBNRs).

Claims reserves are based on the estimated cost of settling the claims, net of any forecast recoveries.

A deferred participation reserve is recorded for participating contracts, based on shadow accounting principles.

A reserve is also recorded for claims handling expenses.

* Pending Auditor Approval 29/129

> Liability adequacy test

At each period-end, the Group assesses whether its recognised insurance liabilities, net of its insurance assets (deferred participation asset plus insurance-related intangible assets), are adequate, based on current estimates of future cash flows under its insurance contracts and financial instruments with DPF. The test is performed using asset-liability management models, by applying a stochastic approach to estimate liabilities according to a wide range of scenarios. The models take into account embedded derivatives (policyholder surrender options, guaranteed yields, etc.) and administrative costs. The test determines the economic value of insurance liabilities corresponding to the average of the stochastic trajectories. Similar-type contracts are grouped together when performing the test and the results are analysed at entity level: if the sum of the surrender value and deferred participation (asset or liability), less related deferred acquisition costs and related intangible assets, is less than the fair value of the recognised insurance liability, the shortfall is recognised in profit.

> Shadow accounting

Shadow accounting procedures are designed to address the risk of an artificial imbalance between assets and liabilities valued using different valuation models. When the measurement of liabilities, deferred acquisition costs or the value of business in force is directly affected by realised gains and losses on assets, a deferred participation reserve is recorded in insurance liabilities to offset the unrealised gains or losses in financial assets. Deferred participation is accounted for in the same way as the underlying, i.e., by adjusting either profit or the revaluation reserve.

The deferred participation reserve is determined by multiplying fair value adjustments to assets by the estimated participation rate corresponding to the contractual obligations associated with each portfolio. The estimated participation rate takes into account regulatory and contractual participation clauses, as well as the Group's profit-taking programme and policyholder dividend policy. Participation rates applied to unrealised gains and losses for shadow accounting purposes are the same as the rates applied to consolidation adjustments for the purpose of determining deferred participation.

The portion of gains or losses attributable to policyholders is determined based on the terms of participating contracts. Shadow accounting is not applied to non-participating contracts that fall outside the scope of regulations requiring payment of a guaranteed minimum participating dividend.

The amount of deferred participation calculated for each entity under shadow accounting principles is recognised either in liabilities as a deferred participation reserve or in assets as a deferred participation asset.

Deferred participation assets are tested for recoverability to ensure that the amount calculated based on the participation rates estimated as described previously and in accordance with the going concern principle, is recoverable out of future actual or unrealised participations and will not result in liability inadequacy vis-à-vis the Group's economic obligations. Recoverability testing uses the same methods as liability adequacy testing described above.

Pursuant to the recommendation of the French national accounting board (Conseil national de la comptabilité – CNC) of 19 December 2008 concerning the recognition of deferred participation assets in the consolidated accounts of insurance companies, the recoverability of these amounts is enhanced by the Group's conservative assessment of its ability to continue to hold its assets, in particular no future retained fund flows has been taken into account. Moreover, the Group has demonstrated the recoverability of the deferred participation assets using unprecedented surrender rates.

> Reinsurance

Outward reinsurance

Premiums, claims and technical reserves are stated before reinsurance. Ceded amounts are recognised under the "Reinsurance result" line item of the income statement.

Ceded technical reserves are tested for impairment at each period-end. If there is objective evidence that these reserves are impaired, as a result of an event that occurred after initial recognition, the carrying amount of the asset is reduced by recording an impairment loss in the income statement. For reinsurance assets secured by collateral, the estimated discounted cash flows from the asset take into account cash flows from the sale of the collateral, net of the estimated cost of obtaining execution of the guarantee, regardless of whether or not such sale is considered probable.

Inward reinsurance

Inward reinsurance contracts give rise to a significant insurance risk and are therefore accounted for in the same way as insurance contracts.

3.13.3 Financial instruments without DPF (IAS 39)

Financial instruments without DPF are initially recorded at fair value. The premium loading is recognised in "Revenue from other activities".

Unit-linked contracts are subsequently measured at fair value, with changes in fair value recognised in profit.

Non-unit-linked investment contracts are subsequently measured at fair value, corresponding to their surrender value.

3.13.4 Service contracts

Contracts that do not expose the Group to an insurance risk or for which the insurance risk is not material are qualified as service contracts when they do not give rise to any financial asset or liability. In accordance with IAS 18, revenue from the rendering of services is recognised by reference to the stage of completion of the transaction at the reporting date, provided that the transaction's outcome can be estimated reliably.

3.14 Property and equipment

Property and equipment consists mainly of office equipment and miscellaneous installations.

Office systems equipment is depreciated over three years and fixtures, fittings and technical installations over 10 years.

3.15 Employee benefit obligations

Employee benefit obligations are recognised in full in the balance sheet in accordance with the amendment to IAS 19, except for share grants which are recognised and measured in accordance with IFRS 2.

3.15.1 Employee benefit plans

Defined benefit pension plan

At the beginning of July 2006, the Group set up a defined benefit supplementary pension plan governed by Article 39 of the French Tax Code. The annuity and financial risks arising from the retirement of plan participants are covered by an insurance policy.

Obligations under defined benefit plans and the related costs are measured by the projected unit credit method. The amount recognised in the balance sheet for pension obligations corresponds to the difference between the projected benefit obligation and the fair value of the plan assets.

The actuarial assumptions used to measure defined benefit obligations vary depending on economic conditions in the country in which the plan has been set up.

Length-of-service awards payable to employees on retirement and jubilees

Obligations for the payment of length-of-service awards and jubilees are measured by the projected unit credit method and recognised as a liability.

Early retirement plans

Obligations under early-retirement plans are measured at the discounted present value of probable future benefit payments and recognised as a liability.

Business start-up grants

Financial assistance given to employees to set up a new business or acquire an existing business is recognised in the balance sheet.

Discount rate

The discount rate corresponds to the Government bond rate or the interest rate for investment-grade corporate bonds traded in an active market with maturities that match the duration of the benefit obligation.

For early-retirement plans, as the duration of the benefit obligation is shorter, the discount rate is based on the yield curve at a date close to the reporting date.

Accounting treatment

The Group has elected to apply the option available under IAS 19, allowing the recognition in equity of actuarial gains and losses under defined benefit plans.

The plans are either funded or unfunded. Assets of funded plans are segregated and managed separately from the Group's assets, and any funding surplus or deficit is recognised in the balance sheet.

Liabilities under unfunded plans are recognised in the balance sheet.

The Group has elected not to apply the corridor method and recognises gains and losses on post-employment defined benefit plans in equity. Actuarial gains and losses on other post-employment benefits are recognised directly in profit.

Actuarial losses recognised in current profit for defined-benefit plans comprise two elements:

• current service cost and past service cost;
• interest cost less the expected return on plan assets.

3.15.2 Share-based payment

Accounting treatment of employee share grants

The shares held for allocation when the share grants vest are recorded as a deduction from equity. The difference between the average cost of the shares and their fair value at the grant date is recognised in equity, with no impact on profit. The cost of the employee services received in exchange for the grants is measured by reference to the fair value of the shares, in accordance with IFRS 2, and is recognised in employee benefits expense over the vesting period, with a corresponding adjustment to equity. The cost recognised in profit takes into account the estimated number of grantees at each reporting date and the cost of managing the shares.

3.16 Financing liabilities and subordinated debt

Perpetual subordinated notes for which the Group determines the timing of interest payments are classified as equity instruments. All other dated and undated debt instruments, especially those with a repayment schedule, are classified as financing liabilities in accordance with IAS 32.

3.17 Acquisition costs and operating expenses

Underwriting expenses are presented by function:

• claim and benefit handling expenses include the costs of the departments responsible for paying claims, endowments and periodic benefits and processing surrenders;
• acquisition costs include all selling, distribution and administrative costs incurred for the acquisition of new contracts;
• contract administration expenses include all the costs of managing in-force business;
• investment management costs include all internal and external costs of managing asset portfolios and financial expenses;
• other underwriting costs correspond to overhead expenses that cannot be allocated rationally to the other functions;
• non-underwriting costs correspond to costs related to businesses that have no technical link to the insurance business.

Cost recognition and allocation:

• operating expenses are initially recognised by nature and are then reallocated by function;
• costs recognised by nature that relate to a single function are posted to the function concerned without applying any allocation key.

Other costs are analysed between:

• corporate costs, which are allocated to the operating centres using statistical cost allocation keys or actual business data;
• operating costs, as adjusted to include corporate costs, which are allocated to the functions using a specific allocation key for each business.

* Pending Auditor Approval 32/129

3.18 Taxation

Group relief

CNP Assurances and its main French subsidiaries have elected to file a consolidated tax return under French group relief rules. The companies in the tax group are CNP Assurances, CNP IAM, Préviposte, Investissement Trésor Vie (ITV), CNP International, CNP Caution, Sogestop G, Sogestop J, Carrés bleus SA (formerly Sogestop C), Prévimut, Cicoge SA (a property investment company), Filassistance Services, Filassistance International, Age d'or Expansion, AEP 3, AEP 4, Assurimmeuble, Étages Franklin, Kupka, Pyramides 2, Assurhelene, Foncière Investissement, Écureuil Vie Crédit and Écureuil Vie Investissement.

Current and deferred taxes

Income tax expense reported in the income statement includes both current and deferred taxes.

Deferred taxes are recognised on temporary differences between the carrying amount of assets and liabilities and their tax base. However, for taxable temporary differences related to investments in subsidiaries, associates, joint ventures and branches, a deferred tax liability is recognised only when the Group is unable to control the period in which the temporary difference will reverse and it is improbable that it will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset at the level of each taxable entity or tax group. Deferred tax assets and liabilities arising from changes in asset values and from the recognition of deferred participation are calculated and tracked separately.

Deferred tax assets are recognised for tax loss carryforwards when it is probable that sufficient taxable profit will be available to permit their realisation. Net deferred tax assets resulting from the offsetting of deferred tax assets and liabilities are recognised when sufficient taxable profit can be expected to be generated to permit their realisation. Deferred tax assets and liabilities are not discounted.

3.19 Operating segments

In accordance with IFRS 8, the Group's reportable business segments are based on the internal reporting system approved by the Group's Executive Committee, regarded as the chief operating decision maker as defined by the Standard, and on the technical characteristics of the products distributed by the Group.

Three business segments have been identified, that generate risks and returns which are separate from those of the other segments:

• the Savings business concerns products enabling policyholders to build up capital which they can cash in. A key feature of these products is their sensitivity to changes in interest rates;
• the Pensions business concerns products designed to enable policyholders to receive an annuity or lump sum on retirement. The main risk associated with these products concerns the probable annuity payment period;
• the Personal Risk business includes products enabling policyholders to insure against the risks of death, accident or illness, property damage or liability claims. The return on these products depends on the occurrence of the insured risk.

The Group's internal reporting system is based on the following indicators:

• premium income: new money, corresponding to premium income measured under French GAAP, i.e., before adjustments related to the deposit component of financial instruments without a discretionary participation feature;
• net new money: premium income as defined above, net of claims settled during the period, and excluding changes in the unexpired risks reserve;
• net profit from insurance activities: premium loading recognised on insurance products, net of commissions paid;
• general expenses: expenses allocated to each reportable segment based on analyses carried out by the Planning and Performance Division;

• * Pending Auditor Approval 33/129

• EBIT: operating profit adjusted for net fair value adjustments to financial assets and before finance costs, taxes and minority interests. EBIT is a key indicator of profit by reportable segment based on analyses by senior Group management. EBIT corresponds to attributable profit for the period adjusted for:

• o finance costs;
• o share of profit of associates;
• o non-recurring items;
• o income tax expense;
• o minority interests;
• o fair value adjustments on the trading portfolio (corresponding to unrealised gains and disposal gains on financial instruments recognised as at fair value through profit or loss); and
• o net capital gains on equity securities and property, after non-recurring write-downs on the portfolio and goodwill (corresponding to disposal gains on equity instruments classified as available-for-sale financial assets and write-downs on financial instruments and property assets);
• equity: equity under IFRS, broken out by reportable segment and based on each segment's average regulatory solvency capital;
• segment assets and liabilities: assets and liabilities under IFRS, broken out by reportable segment.

Comparative disclosures have been analysed using the same basis.

3.20 Contingent liabilities

A contingent liability is:

• a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or
• a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.

Contingent liabilities are not recognised in the balance sheet but are disclosed in the notes to the financial statements, except when it is not probable that they will give rise to an outflow of resources.

Contingent liabilities are regularly reviewed to determine whether an outflow of resources has become probable or can be measured with sufficient reliability. If this is the case, a provision is recognised in the financial statements for the period in which the change in probability or measurability occurs.

Note 4. Share capital

4.1 Undated deeply-subordinated notes reclassified in equity

In € millions	Issuance date	Interest rate		Amount
		Deeply-subordinated notes (attributable to owners of the parent)		2,141.8
CNP Assurances	Jun-04	Tec 10+10 bps, capped at 9%	€	250.0
CNP Assurances	Nov-04	Tec 10+10 bps, capped at 9%	€	50.0
CNP Assurances	Mar-05	6.5% until 2008, then 3% + 22.5% times 10-year EUR CMS	€	225.0
CNP Assurances	Mar-05	6.25% until 2009, then 4 times (10- year EUR CMS – 2-year EUR CMS), 9% cap and 2.75% floor	€	23.8
CNP Assurances	Jun-05	7% until June 2010, then 10-year CMS + 30 bps	€	75.0
CNP Assurances	May-06	5.25% until 16 May 2036, then 3- month Euribor +185bps	€	160.0
CNP Assurances	Dec-06	4.75% until 22 Dec. 2016, then 3- month Euribor +184bps	€	1,250.0
CNP Assurances	Dec-06	3-month Euribor +95bps until 20 December 2026, then 3-month Euribor +195bps	€	108.0
Total				2,141.8

31/12/2010

		31/12/2009
In € millions	Issuance date	Interest rate	Currency	Amount
		Deeply-subordinated notes (attributable to owners of the parent)		2,143.0
CNP Assurances	Jun-04	Tec 10 +10bps, capped at 9%	€	250.0
CNP Assurances	Nov-04	Tec 10 +10bps, capped at 9%	€	50.0
CNP Assurances	Mar-05	6.5% until 2008, then 3% + 22.5% times 10-year EUR CMS	€	225.0
CNP Assurances	Mar-05	6.25% until 2009, then 4 times (10- year EUR CMS – 2-year EUR CMS), 9% cap and 2.75% floor	€	25.0
CNP Assurances	Jun-05	7% until June 2010, then 10-year CMS + 30 bps	€	75.0
CNP Assurances	May-06	5.25% until 16 May 2036, then 3- month Euribor +185bps	€	160.0
CNP Assurances	Dec-06	4.75% until 22 Dec. 2016, then 3- month Euribor +184bps	€	1,250.0
CNP Assurances	Dec-06	3-month Euribor +95bps until 20 December 2026, then 3-month Euribor +195bps	€	108.0
Total				2,143.0

* Pending Auditor Approval 35/129

In € millions	Issuance date	Interest rate	Currency	Amount
		Deeply-subordinated notes (attributable to owners of the parent)		2143.0
CNP Assurances	Jun-04	Tec 10 +10bps, capped at 9%	€	250.0
CNP Assurances	Nov-04	Tec 10 +10bps, capped at 9%	€	50.0
CNP Assurances	Mar-05	6.5% until 2008, then 3% + 22.5% times 10-year EUR CMS	€	225.0
CNP Assurances	Mar-05	6.25% until 2009, then 4 times (10- year EUR CMS – 2-year EUR CMS), 9% cap and 2.75% floor	€	25.0
CNP Assurances	Jun-05	7% until June 2010, then 10-year CMS + 30 bps	€	75.0
CNP Assurances	May-06	5.25% until 16 May 2036, then 3- month Euribor +185bps	€	160.0
CNP Assurances	Dec-06	4.75% until 22 Dec. 2016, then 3- month Euribor +184bps	€	1,250.0
CNP Assurances	Dec-06	3-month Euribor +95bps until 20 December 2026, then 3-month Euribor +195bps	€	108.0
Total		2,143.0

31/12/2008

4.2 Ownership structure

Shareholder	Number of shares	% interest
Caisse des Dépôts	237,660,516	40.00%
Sopassure (La Poste and BPCE Group)	210,821,912	35.48%
French State	6,475,364	1.09%
Total shares held in concert	454,957,792	76.57%
Private investors	139,193,500	23.43%
Of which: CNP Assurances (treasury shares)	2,498,261	0.42%
Total	594,151,292	100.00%

4.3 Equity

Issued capital	Ordinary shares
	31/12/2010	31/12/2009	31/12/2008
Number of shares outstanding at the beginning of the period	594,151,292	594,151,292	594,151,292
Shares issued during the period	-	-
Number of shares outstanding at the end of the period	594,151,292	594,151,292	594,151,292

4.4 2010 dividends

The recommended 2010 dividend amounts to €0.77 per share, representing a total payout of €457.5 million.

4.5 Basic and diluted earnings per share

In € millions	31/12/2010	31/12/2009	31/12/2008
Profit attributable to owners of the parent	1,050.0	1,004.1	730.6
Charge on deeply-subordinated debt, net of tax	(60.6)	(63.0)	(71.5)
Dividends on preferred shares	0.0	0.0	0.0
Profit attributable to ordinary shareholders	989.4	941.1	659.1
	31/12/2010	31/12/2009	31/12/2008
Number of ordinary shares at 1 January (*)	594,151,292.0	594,151,292.0	594,151,292.0
Treasury shares (*)	(1,490,530.2)	(1,703,921.2)	(1,864,457.2)
Weighted average number of shares at 31 December (*)	592,660,761.8	592,447,370.9	592,286,834.8
In € per share	31/12/2010	31/12/2009	31/12/2008
Profit attributable to ordinary shareholders	1.67	1.59	1.11
After-tax effect of interest on convertible bonds	0.0	0.0	0.0
Diluted profit attributable to ordinary shareholders	1.67	1.59	1.11
In € millions	31/12/2010	31/12/2009	31/12/2008
Profit attributable to ordinary shareholders	989.4	941.1	659.1

(*) The number of shares outstanding for the period and prior periods has been adjusted to reflect the 4-for-1 stock split on 5 July 2010.

Diluted earnings per share are calculated by dividing profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding at the balance sheet date.

4.6 Related party information

Related parties comprise subsidiaries, associates and joint ventures and the members of senior management.

Related party transactions are carried out on arm's length terms.

The list of subsidiaries and associates is provided in Note 5. Material transactions between the Company and consolidated subsidiaries are presented in Note 4.6.2. The total remuneration paid to members of senior management is disclosed in Note 4.7.

4.6.1 Transactions with non-Group companies

4.6.1.1 Transactions between CNP Assurances and direct shareholders

In € millions	CNP Assurances	Caisse des Dépôts et Consignations	BPCE	La Banque Postale
Commissions	(1,291.8)	0.0	764.2	527.6
Fees	(9.7)	9.7	0.0	0.0
Employee benefits expense	(16.8)	16.8	0.0	0.0
Dividends	(336.3)	178.2	79.0	79.1
Financial income and expense	0.0	0.0	0.0	0.0

Commissions correspond to revenue received by BPCE and La Banque Postale on the sale of products managed by CNP Assurances.

Fees correspond to various expenses rebilled by Caisse des Dépôts et Consignations to CNP Assurances.

Employee benefits expense corresponds to the cost of Caisse des Dépôts et Consignations employees seconded to CNP Assurances.

Dividends correspond to the 2009 dividend paid to the Group's direct shareholders.

4.6.1.2 Transactions between CNP Assurances subsidiaries and between Group shareholders

The following tables show material transactions between CNP Assurances subsidiaries and between Group shareholders corresponding to the payment of commissions or dividends, or interest on subordinated notes issued by a subsidiary that are held by another subsidiary.

In € millions	CNP Assurances	BPCE
Subordinated debt	(17.7)	17.7
Commissions	(764.2)	764.2
Time accounts	(65.0)	65.0
In € millions	CNP Assurances	Natixis Global Asset Management
Asset management fees	(18.3)	18.3
In € millions	La Banque Postale Prévoyance	La Banque Postale
Commissions	(38.6)	38.6
Dividends	(4.2)	4.2
In € millions	Caixa	CEF*
Dividends	(117.5)	117.5
CEF: Caixa Economica Federal
In € millions	CNP UniCredit Vita	UniCredit
Dividends	0.0	0.0
In € millions	Marfin Insurance Holdings Ltd	Marfin Popular Bank
Dividends	(5.3)	5.3

4.6.2 Intragroup transactions in 2010

4.6.2.1 Subsidiaries and joint ventures

The following table shows transactions between the Group and its subsidiaries. They correspond to fees, interest on subordinated notes issued by a subsidiary and held by the Group, reinsurance and co-insurance transactions between the Group and its subsidiaries and dividends paid by subsidiaries to the Group.

In € millions	CNP Assurances	La Banque Postale Prévoyance	Caixa	CNP UniCredit Vita
Fees	(21.2)	19.1	1.6	0.4
Reassurance/co-insurance	0.0	0.0	0.0	0.0
Dividends	(123.5)	4.2	119.3	0.0

4.6.2.2 Associates

The Group does not account for any companies using the equity method.

4.7 Management remuneration

The total remuneration paid to the Chairman, Chief Executive Officer, the Deputy Chief Executive Officers and the members of the Board of Directors is presented below, together with details of their remuneration by category.

2010

• Short-term benefits: the short-term benefits (including salaries, bonuses, directors' fees and benefits in kind) paid to the Chairman, Chief Executive Officer, the three Deputy Chief Executive Officers and the members of the Board of Directors in 2010 amounted to €3,482,836.
• Long-term benefits: the cumulative amounts provided for or recognised in respect of pension or other retirement benefits for the Chairman, the Chief Executive Officer and the three Deputy Chief Executive Officers total €7,956,560.
• Termination benefits: the only termination benefits payable to the members of senior management are those provided for in their employment contracts or in the collective bargaining agreement.
• Share-based payment: no share-based payments were made in 2010 to the Chief Executive Officer, the three Deputy Chief Executive Officers or the members of the Board of Directors.

2009

• Short-term benefits: the short-term benefits (salaries, bonuses, directors' fees and benefits in kind) paid to the Chairman, Chief Executive Officer, the four Deputy Chief Executive Officers and the members of the Board of Directors in 2009 amounted to €3,835,609.
• Long-term benefits: the cumulative amounts provided for or recognised in respect of pension or other retirement benefits for the Chairman, the Chief Executive Officer and the four Deputy Chief Executive Officers total €8,793,798.
• Termination benefits: the only termination benefits payable to the members of senior management are those provided for in their employment contracts or in the collective bargaining agreement.
• Share-based payment: no share-based payments were made in 2009 to the Chief Executive Officer, the four Deputy Chief Executive Officers or the members of the Board of Directors.

2008

• Short-term benefits: the short-term benefits (salaries, bonuses, directors' fees and benefits in kind) paid to the Chairman, Chief Executive Officer, the four Deputy Chief Executive Officers and the members of the Board of Directors in 2008 amounted to €4,262,342.
• Long-term benefits: the cumulative amounts provided for or recognised in respect of pension or other retirement benefits for the Chairman, the Chief Executive Officer and the four Deputy Chief Executive Officers total €6,047,552.
• Termination benefits: the only termination benefits payable to the members of senior management are those provided for in their employment contracts or in the collective bargaining agreement.
• Share-based payment: no share-based payments were made in 2008 to the Chief Executive Officer, the four Deputy Chief Executive Officers or the members of the Board of Directors.

Note 5. Scope of consolidation

5.1 Consolidated companies and percentage of voting rights at 31 December 2010

				31/12/2010 31/12/2009
Company	Change in scope of consol idation	Consoli dation method	Country	Business	% voting rights	% interest	% voting rights	% interest
1. Strategic subsidiaries
CNP ASSURANCES		Full	France	Insurance	100.00%	100.00%	100.00%	100.00%
CNP IAM		Full	France	Insurance	100.00%	100.00%	100.00%	100.00%
PREVIPOSTE		Full	France	Insurance	100.00%	100.00%	100.00%	100.00%
ITV		Full	France	Insurance	100.00%	100.00%	100.00%	100.00%
CNP INTERNATIONAL		Full	France	Insurance	100.00%	100.00%	100.00%	100.00%
LA BANQUE POSTALE		Propor	France	Insurance	50.00%	50.00%	50.00%	50.00%
PRÉVOYANCE		tionate
CNP SEGUROS DE VIDA			Full Argentina	Insurance	76.47%	76.47%	76.47%	76.47%
CNP HOLDING BRASIL		Full	Brazil	Insurance	100.00%	100.00%	100.00%	100.00%
CAIXA SEGUROS		Full	Brazil	Insurance	51.75%	51.75%	51.75%	51.75%
CNP UNICREDIT VITA		Full	Italy	Insurance	57.50%	57.50%	57.50%	57.50%
CNP VIDA BARCLAYS VIDA Y		Full Full	Spain Spain	Insurance Insurance	94.00% 50.00%	94.00% 50.00%	94.00% 50.00%	94.00% 50.00%
PENSIONES
MARFIN INSURANCE		Full	Cyprus	Insurance	50.10%	50.10%	50.10%	50.10%
HOLDINGS LTD CNP EUROPE LIFE LTD		Full	Ireland	Insurance	100.00%	100.00%	100.00%	100.00%
GLOBAL	(1)	-	Portugal	Insurance	0.00%	0.00%	83.52%	83.52%
GLOBAL VIDA	(1)	-	Portugal	Insurance	0.00%	0.00%	83.57%	83.57%
2. Mutual funds
UNIVERS CNP 1 FCP		Full	France	Mutual fund	99.79%	99.79%	99.79%	99.79%
CNP ASSUR EURO SI		Full	France	Mutual fund	97.08%	97.08%	97.02%	97.02%
Ecureuil Profil 30		Full	France	Mutual fund	95.31%	95.31%	94.79%	94.79%
LBPAM PROFIL 50 D 5DEC		Full	France	Mutual fund	74.68%	74.68%	71.24%	71.24%
LBPAM ACT. DIVERSIF 5DEC		Full	France	Mutual fund	75.68%	75.68%	73.93%	73.93%
CNP ACP OBLIG FCP		Full	France	Mutual fund	49.65%	49.65%	49.71%	49.71%
BOULE DE NEIGE 3 3DEC		Full	France	Mutual fund	61.22%	61.22%	60.51%	60.51%
CDC IONIS FCP 4DEC		Full	France	Mutual fund	100.00%	100.00%	100.00%	100.00%
CNP ACP 10 FCP		Full	France	Mutual fund	49.75%	49.75%	49.74%	49.74%
Ecureuil Profil 90		Full	France	Mutual fund	54.28%	54.28%	54.55%	54.55%
PROGRESSIO 5 DEC		Full	France	Mutual fund	92.49%	92.49%	92.02%	92.02%
AL DENTE 3 3 DEC		Full	France	Mutual fund	56.49%	56.49%	55.66%	55.66%
VIVACCIO ACT 5DEC		Full	France	Mutual fund	80.80%	80.80%	80.46%	80.46%
CNP ASSUR ALT. 3DEC		Full	France	Mutual fund	99.78%	99.78%	99.13%	99.13%
3. Property companies
				Lease
ASSURBAIL		Full	France	financing	100.00%	100.00%	99.07%	99.07%
AEP3 SCI		Full	France	Non-trading property company	100.00%	100.00%	100.00%	100.00%
CIMO		Full	France	Non-trading property company	100.00%	100.00%	100.00%	100.00%
AEP4 SCI		Full	France	Non-trading property company	100.00%	100.00%	100.00%	100.00%
PB6		Propor tionate	France	Property company	50.00%	50.00%	50.00%	50.00%

SICAC		Full	France	Non-trading property company	100.00%	100.00%	100.00%	100.00%
CNP IMMOBILIER		Full	France	Non-trading property company	100.00%	100.00%	100.00%	100.00%
ASSURIMMEUBLE		Full	France	Non-trading property company	100.00%	100.00%	100.00%	100.00%
Ecureuil Vie Développement		Full	France	Brokerage	51.00%	51.00%	51.00%	51.00%
NATIXIS GLOBAL ASSET MANAGEMENT	(2)	-	France	Asset management	0.00%	0.00%	0.00%	0.00%

(1) Sold on 3 March 2010.

(2) Sold on 17 December 2009.

5.2 Analysis of the Barclays Vida y Pensiones acquisition price

	Based on a
	100%	CNP share
(€m)	interest	50%
Cost of the business combination	409.6	244.4
Acquisition price before adjustment	280.0	140.0
Contractually agreed adjustment	50.4	25.2
Earn-out, subject to future achievement of objectives	75.5	75.5
Business acquisition costs	3.7	3.7
Net asset value at 1 September 2009	167.7	83.8
Value of business in force net of tax	72.4	36.2
Value of distribution agreements net of tax	128.7	64.3
Goodwill		60.0

As of 31 December 2009, the entire difference between the acquisition price and net asset value was recognised in goodwill.

Pursuant to IFRS 3 (2004), the work involved in calculating the final goodwill for Barclays Vida y Pensiones was completed by 1 September 2010.

In order to share out the value created by the partnership on an equitable basis, the agreement between Barclays and CNP Assurances provides for an earn-out mechanism over 12 years based on the achievement of certain sales targets and margins and on the growth of the Barclays branch network. As payment of this contingent consideration is deemed probable, a best estimate of its amount has been included in the calculation of goodwill.

Once the remeasurement of net assets acquired was complete, the following amounts were booked in intangible assets:

• the value of in-force business acquired corresponding to the present value of future profits related to contracts subscribed at the acquisition date, in an amount of €101.4 million before tax (€72.4 million net of tax);
• the value of the distribution agreement, in an amount of €180.2 million before tax (€128.7 million net of tax), relating to future business. The value of the distribution agreement is estimated based on cash flows from price adjustments payable and expected to result from new branch openings for the distribution partner, Barclays.

Goodwill resulting after the recognition of these intangible assets amounts to €60 million.

5.3 Financial information concerning associates

Summary financial information, on a 100% basis

31/12/2010

The CNP Group's consolidated financial statements do not include any equity-accounted companies at December 31, 2010.

31/12/2009	Total assets	Equity	Revenue	Profit
Natixis Global Asset Management*	0	0	0	280

* Natixis Global Asset Management was sold on 17 December 2009.

31/12/2008	Total assets	Equity	Revenue	Profit
Natixis Global Asset Management	4,970	3,552	1,364	257

Investments in associates

	31/12/2010	31/12/2009	31/12/2008
At 1 January	0.0	426.3	422.8
Increase in interest	0.0	0.0	0.0
Change in consolidation method	0.0	0.0	(7.9)
Newly-consolidated companies	0.0	0.0	0.0
Share issue	0.0	14.3	21.7
Share of profit	0.0	31.7	29.1
Share of amounts recognised in net assets	0.0	(2.3)	4.1
Dividends received	0.0	(29.2)	(43.5)
Deconsolidations	0	(440.8)	0
At 31 December	0.0	0.0	426.3

Note 6. Segment information

6.1 Balance sheet by business segment at 31 December 2010

ASSETS (In € millions)	Savings	Pensions	Personal risk	Other (excluding insurance)	Total
Goodwill and value of business in force	442.2	9.5	358.6	0.0	810.3
Financial investments and investments in associates	260,046.7	30,221.8	13,365.1	199.1	303,832.7
Other assets (including deferred participation asset)					14,965.6
TOTAL ASSETS					319,608.6

LIABILITIES (In € millions)	Savings	Pensions	Personal risk	Other (excluding insurance)	Total
Total equity	9,329.0	1,062.0	2,757.6	29.4	13,178.0
Financial liabilities related to financial instruments (including deferred participation reserve)	157,139.2	7,283.6	552.8	0.0	164,975.6
Insurance liabilities	86,611.2	27,508.9	9,058.2	0.0	123,178.3
Other liabilities					18,276.7
Total equity and liabilities					319,608.6

6.2 Balance sheet by business segment at 31 December 2009

ASSETS (In € millions)	Savings	Pensions	Personal risk	Other (excluding insurance)	Total
Goodwill and value of business in force	567.0	6.5	269.7	2.5	845.7
Financial investments and investments in associates	244,146.2	29,086.8	13,805.5	110.4	287,148.9
Other assets (including deferred participation asset)					13,882.1
TOTAL ASSETS					301,876.7

LIABILITIES (In € millions)	Savings	Pensions	Personal risk	Other (excluding insurance)	Total
Total equity	8,839.0	1,040.8	2,533.5	12.2	12,425.5
Financial liabilities related to financial instruments (including deferred participation reserve)	156,624.1	7,328.2	551.1		164,503.4
Insurance liabilities	75,609.8	23,742.7	7,740.8		107,093.3
Other liabilities					17,854.5
Total equity and liabilities					301,876.7

* Pending Auditor Approval 44/129

6.3 Balance sheet by business segment at 31 December 2008

ASSETS (In € millions)	Savings	Pensions	Personal risk	Other (excluding insurance)	Total
Goodwill and value of business in force	537.4	96.3	247.7	0.0	881.4
Financial investments and investments in associates	216,768.7	24,366.1	12,329.4	53.6	253,517.8
Other assets (including deferred participation asset)					15,165.4
TOTAL ASSETS					269,564.6

LIABILITIES (In € millions)	Savings	Pensions	Personal risk	Other (excluding insurance)	Total
Total equity	8,081.4	969.9	1,548.6	0.0	10,599.9
Financial liabilities related to financial instruments (including deferred participation reserve)	149,011.1	6,269.7	292.6	0.0	155,573.4
Insurance liabilities	58,426.8	20,511.2	7,358.3	0.0	86,296.3
Other liabilities					17,095.0
Total equity and liabilities					269,564.6

6.4 Income statement by business segment at 31 December 2010

	31/12/2010						Reconciliation with premium income under IFRS
In € millions	Savings	Pensions	Personal risk	Other (excluding insurance)	Total	Adjustments relating to the deposit component of financial instruments (IAS 39)	Premium income under IFRS
Premium income	24,404.5	3,381.6	5,568.6		33,354.7	(1,039.6)	32,315.1
Net new money	6,796.3	1,459.6	3,129.2		11,385.1
Net revenue from insurance activities	1,437.7	150.8	1,083.0	113.4	2,784.9
General expenses	(414.9)	(80.4)	(336.7)	(42.0)	(874.0)
EBIT	1,022.8	70.5	746.2	71.4	1,910.9

0.0
(27.2)
(619.3)
(235.2)
9.7
106.3

Attributable to owners of the parent	1,050.0

* Relating mainly to a strengthening of technical reserves offset by the deferred tax asset related to the French tax reform concerning the capitalisation reserve.

6.5 Income statement by business segment at 31 December 2009

			31/12/2009			Reconciliation with premium income under IFRS
In € millions	Savings	Pensions	Personal risk	Other (excluding insurance)	Total	Adjustments relating to the deposit component of financial instruments (IAS 39)	Premium income under IFRS
Premium income	25,256.4	3,193.7	4,998.5		33,448.6	(863.0)	32,586.6
Net new money	8,354.3	1,593.9	2,666.3		12,614.4
Net revenue from
insurance activities	1,320.9	288.1	865.7	77.2	2,551.9
General expenses	(395.2)	(89.8)	(281.2)	(29.4)	(795.6)
EBIT	925.7	198.3	584.5	47.8	1,756.3
Finance costs					(85.4)
Share in earnings of associates					31.7
Non-recurring items *					(220.5)
Income tax expense (effective tax rate)					(543.8)
Minority interests					(154.2)
Fair value adjustments on securities held for trading					280.7
Net gains on equities and property					(60.6)
Attributable to owners of the parent					1,004.1

* Related to a strengthening of technical reserves

6.6 Income statement by business segment at 31 December 2008

			Reconciliation with premium income under IFRS
In € millions	Savings	Pensions	Personal risk	Other (excluding insurance)	Total	Adjustments relating to the deposit component of financial instruments (IAS 39)	Premium income under IFRS
Premium income	21,491.9	2,865.7	4,846.5	0.2	29,204.3	882.1	28,322.2
Net new money	5,629.3	1,191.1	2,708.1	0.0	9,528.5
Net revenue from insurance activities	1,741.5	107.3	1,201.4	70.4	3,120.6
General expenses	(386.6)	(86.1)	(256.8)	(22.4)	(751.9)
EBIT	1,354.9	21.2	944.6	48.0	2,368.7
Finance costs					(108.5)
Share in earnings of associates					29.1
Income tax expense (effective tax rate)					(713.9)
Minority interests
Fair value adjustments on securities held for trading					(409.7)
Net gains on equities and property					(271.0)
Attributable to owners of the parent					730.6

Note 7. Intangible assets

7.1 Intangible assets by category

	31/12/2010
In € millions	Cost	Amortisation	Impairment losses	Impairment reversals	Carrying amount
Goodwill (1)	849.5	(63.1)	(104.0)	0.0	682.5
Value of business in force (2)	472.1	(197.2)	(147.1)	0.0	127.8
Value of distribution agreements	180.2	(9.6)	0.0	0.0	170.6
Software	229.0	(193.5)	(0.1)	0.0	35.4
* Internally-developed software	93.7	(73.0)	0.0	0.0	20.7
* Other	135.3	(120.5)	(0.1)	0.0	14.8
Other	161.9	0.0	0.0	0.0	161.9
TOTAL	1,892.7	(463.4)	(251.2)	0.0	1,178.2

	31/12/2009
In € millions	Cost	Amortisation	Impairment losses	Impairment reversals	Carrying amount
Goodwill (1)	938.1	(58.5)	(104.0)	0.0	775.6
Value of business in force (2)	356.2	(158.3)	(127.7)	0.0	70.2
Software	213.6	(181.7)	(0.1)	0.0	31.8
* Internally-developed software	83.5	(69.9)	0.0	0.0	13.5
* Other	130.1	(111.8)	(0.1)	0.0	18.2
TOTAL	1,507.9	(398.5)	(231.8)	0.0	877.6

	31/12/2008
In € millions	Cost	Amortisation	Impairment losses	Impairment reversals	Carrying amount
Goodwill (1)	775.5	(63.3)	0.0	0.0	712.2
Value of business in force	286.1	(116.9)	0.0	0.0	169.2
Software	195.4	(166.1)	(0.1)	0.0	29.2
* Internally-developed software	79.1	(67.1)	0.0	0.0	12.0
* Other	116.3	(99.0)	(0.1)	0.0	17.2
TOTAL	1,257.0	(346.3)	(0.1)	0.0	910.6

(1) Prior to transition to IFRS on 1 January 2005, intangible assets were amortised under Local GAAP.

(2) The amount of impairment before tax is recorded in the income statement under "Amortisation of value of in-force business acquired".

7.2 Goodwill

7.2.1 Goodwill by company

In € millions	Original goodwill	Net goodwill at 31 December 2010	Net goodwill at 31 December 2009	Net goodwill at 31 December 2008
Global	34.4	0.0	0.0	25.8
Global Vida	17.8	0.0	0.0	13.3
La Banque Postale Prévoyance	45.8	22.9	22.9	22.9
Caixa group	360.6	270.9	239.8	184.6
CNP UniCredit Vita	366.5	247.0	262.5	366.5
Marfin Insurance Holdings Ltd	81.6	81.6	85.9	99.1
Barclays Vida y Pensiones	60.0	60.0	164.5	-
TOTAL	966.7	682.5	775.6	712.2

The Group's annual goodwill impairment testing procedures are described in Note 3.9.1. The recoverable amount of the CGUs to which the entities listed above have been allocated corresponds to their value in use, based on net asset value plus expected future cash flows from existing policies and new business. Expected future revenues are estimated by taking the embedded value of in-force insurance policies and financial instruments, and the value of new business.

CNP UniCredit Vita

The expected future cash flows are taken from the five-year business outlook (2010-2015) validated by management and extrapolated using a stable or decreasing growth rate for new business between 2018 and 2029, and then discounted to present value using a post-tax discount rate of 7.89% in line with the average weighted cost of capital. As explained in the summary of significant accounting policies, the recoverable amount is determined based on the assumption that the distribution agreement will be renewed. At end-May 2010, UniCredit and CNP Assurances signed an agreement aimed at strengthening their partnership, notably through the intention of both partners to develop a personal risk business. The partners also decided that the distribution agreement should be tacitly renewable at the end of the current contractual term (2017).

The decrease in the value of goodwill attributable to CNP UniCredit Vita is due to adjustments to the acquisition price booked over the period.

At 31 December 2010, a comparison of the recoverable amount and the carrying amount, and the application of a range of reasonable discount rates to future cash flows did not result in the recognition of an impairment loss provision.

At 31 December 2009, impairment totalling €104 million was recognised in order to bring the carrying amount back into line with the recoverable amount of goodwill calculated at the same date.

Caixa group

The expected future cash flows are taken from the five-year business outlook (2010-2015) validated by management and extrapolated using a stable or decreasing growth rate for new business between 2015 and 2029, and then discounted to present value using a post-tax discount rate of approximately 13%.

At 31 December 2010, as in the previous period, a comparison of the recoverable amount and the carrying amount, and the application of a range of reasonable discount rates to future cash flows did not result in the recognition of an impairment loss provision.

At present, based only on an analysis of forecast cash flows through to the end of the current agreement in force (2021), there is no need to recognise an impairment loss provision.

Marfin Insurance Holdings Ltd

The expected future cash flows are taken from the five-year business outlook (2010-2015) validated by management and extrapolated using a stable or decreasing growth rate for new business between 2015 and 2029 (i.e., one year after the end of the current agreement in force), and then discounted to present value using post-tax discount rates of approximately 9% and 13% for the Cypriot and Greek businesses, respectively.

At 31 December 2010, as in the previous period, a comparison of the recoverable amount and the carrying amount, and the application of a range of reasonable discount rates to future cash flows did not result in the recognition of an impairment loss.

The decrease in the value of goodwill attributable to Marfin Insurance Holdings Ltd is due to adjustments to the acquisition price - actually paid, or estimated and relating to future periods – that were booked during the period.

Barclays Vida y Pensiones

The expected future cash flows are taken from the five-year business outlook (2010-2015) validated by management and extrapolated using a stable or decreasing growth rate for new business between 2015 and 2034 (when the current agreement with Barclays expires), and then discounted to present value using post-tax discount rates of 8.33%, 9.13% and 7.89% for the Spanish, Portuguese and Italian businesses, respectively.

At 31 December 2010, a comparison of the recoverable amount and the carrying amount, and the application of a range of reasonable discount rates to future cash flows did not result in the recognition of an impairment loss.

The year-on-year decrease in the value of goodwill attributable to Barclays Vida y Pensiones is due to the completion of the acquisition audit work during the period (see Note 5.2).

Global and Global Vida

Global and Global Vida were sold on 3 March 2010.

7.2.2 Changes in goodwill for the period

In € millions	31/12/2010	31/12/2009	31/12/2008
Carrying amount at the beginning of the period	775.6	712.2	659.2
Goodwill recognised during the period	0.0	164.5	99.1
Adjustments to provisional accounting	(104.4)	(13.2)	0.0
Adjustments resulting from changes in earnouts	(4.3)	0.0	0.0
Adjustments resulting from subsequent recognition of deferred tax assets	0.0	0.0	0.0
Translation adjustment on gross value	35.7	63.4	(52.9)
Other movements	(15.5)	0.0	0.0
Impairment losses	0.0	(104.0)	0.0
Translation adjustment on movements during the period	(4.6)	(8.2)	6.8
Increase in interest rates	0.0	0.0	0.0
Non-current assets held for sale and discontinued operations	0.0	(39.1)	0.0
Carrying amount at the end of the period	682.5	775.6	712.2

7.3 Value of in-force business and distribution agreements

7.3.1 Value of business in force

In € millions	Original value	Carrying amount at 31 December 2010	Carrying amount at 31 December 2009	Carrying amount at 31 December 2008
Caixa group	122.6	8.4	10.1	10.0
CNP UniCredit Vita (1)	175.3	0.0	0.0	136.8
CNP Vida	24.0	0.0	20.7	21.9
CNP Seguros de Vida	0.9	0.1	0.3	0.5
Marfin Insurance Holdings Ltd (2)	44.4	35.3	39.1	0.0
Barclays Vida y Pensiones (3)	101.4	84.0	0.0	0.0
TOTAL	468.6	127.8	70.2	169.2

(1) At 31 December 2009, the Group's share of the value of CNP Unicredit Vita's in-force business was written down in full for an amount of €45 million net of tax.

(2) In-force business was recognised for an amount of €44.4 million following completion of the acquisition audit work, based on a 100% share.

(3) In-force business was recognised for an amount of €101.4 million following completion of the acquisition audit work, based on a 100% share.

7.3.2 Changes in the value of business in force

In € millions	31/12/2010	31/12/2009	31/12/2008
Gross at the beginning of the period	356.2	286.1	307.7
Newly-consolidated companies	0.0	0.0	0.0
Translation reserve	14.5	25.7	(21.6)
Acquisitions for the period	101.4	44.4	0.0
Disposals for the period	0.0	0.0	0.0
Gross at the end of the period	472.1	356.2	286.1
Accumulated amortisation and impairment at the beginning of the period	(289.7)	(116.9)	(121.3)
Translation adjustments	(13.3)	(23.0)	18.8
Amortisation for the period (1)	(21.9)	(22.1)	(14.4)
Impairment losses recognised during the period (2)	(19.4)	(127.7)	0.0
Impairment losses reversed during the period	0.0	0.0	0.0
Disposals for the period	0.0	0.0	0.0
Accumulated amortisation and impairment at the end of the period	(344.3)	(289.7)	(116.9)
Carrying amount at the end of the period	127.8	66.5	169.2

(1) At 31 December 2009, pending final calculation of the value of Barclays Vida y Pensiones' in-force business, the Group recognised a charge of €3.7 million (the Group's pre-tax share was €1.8 million) to reflect the amortisation of in-force business in the consolidated financial statements.

However, the value of the goodwill recognised for Barclays Vida y Pensiones (value of €164.5 million) was not written down by the estimated amount of the amortisation of in-force business so as not to pre-empt the work involved in calculating final goodwill. In view of the relatively small amount involved, the amount of goodwill initially estimated and recognised for Barclays Vida y Pensiones (i.e., €164.5 million) has not been reduced by the aforementioned amortisation charge.

(2) At 31 December 2010, impairment related to the value of CNP Vida's in-force business At 31 December 2009, the amount of impairment before tax of the value of CNP UniCredit Vita's in-force business was recorded in the income statement under "Amortisation of value of in-force business acquired".

7.3.3 Distribution agreements

In € millions	31/12/2010	31/12/2009	31/12/2008
Carrying amount at the beginning of the period	0.0	0.0	0.0
Acquisitions for the period	180.2	0.0	0.0
Amortisation for the period	(9.6)	0.0	0.0
Adjustments	0.0	0.0	0.0
Impairment losses	0.0	0.0	0.0
Translation adjustments	0.0	0.0	0.0
Other movements	0.0	0.0	0.0
Carrying amount at the end of the period	170.6	0.0	0.0

At 31 December 2010, the Group recognised €180.2 million before taxes in respect of distribution agreements with Barclays Vida y Pensiones, based on a 100% share.

7.4 Software

7.4.1 Internally-developed software

In € millions	31/12/2010	31/12/2009	31/12/2008
Carrying amount at the beginning of the period	13.5	12.0	10.1
Acquisitions for the period	10.2	4.4	5.1
Amortisation for the period	(3.0)	(2.9)	(3.2)
Impairment losses	0.0	0.0	0.0
Translation adjustments	0.0	0.0	0.0
Other movements	0.0	0.0	0.0
Carrying amount at the end of the period	20.7	13.5	12.0

7.4.2 Other software and other intangible assets

In € millions	31/12/2010	31/12/2009	31/12/2008
Carrying amount at the beginning of the period	18.2	17.2	18.0
Acquisitions for the period	170.8	13.1	9.9
Amortisation for the period	(8.6)	(12.0)	(9.1)
Impairment losses	(3.7)	(0.1)	(1.9)
Translation adjustments	0.0	0.0	0.0
Other movements	0.0	0.0	0.3
Carrying amount at the end of the period	176.7	18.2	17.2

Note 8. Investment and owner-occupied property

The purpose of this note is to show depreciation and impairment losses recognised/reversed during the period through profit in respect of property and the captions impacted by the movements.

It presents:

• the gross carrying amount and accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of the period;

• a reconciliation of the carrying amount of investment property at the beginning and end of the period, showing (i) additions; (ii) disposals; (iii) depreciation; (iv) impairment losses recognised and reversed during the period; (v) the net exchange differences arising on the translation of the financial statements into a different presentation currency, and on translation of a foreign operation into the presentation currency of the reporting entity; (vi) transfers to and from inventories and owner-occupied property and (vii) other changes;

• the fair value of investment properties held in unit-linked portfolios.

8.1 Investment property

Carrying amount of investment property (in € millions)	31/12/2010	31/12/2009	31/12/2008
Investment property measured by the cost model
Gross value	1,159.9	1,182.8	1,482.1
Accumulated depreciation	(344.7)	(339.0)	(431.4)
Accumulated impairment losses	(22.5)	(25.9)	(15.5)
Carrying amount	792.7	817.9	1,035.2
Investment property measured by the fair value model
Gross value	485.3	466.1	520.6
Total investment property	1,278.0	1,284.1	1,555.8

Investment property (other than property held in linked liabilities) (in € millions) 31/12/2010 31/12/2009 31/12/2008

Carrying amount at the beginning of the period	817.9	1,035.2	1,053.6
Acquisitions	3.0	0.4	0.0
Post-acquisition costs included in the carrying amount of property	10.8	59.3	15.2
Properties acquired through business combinations	0.0	0.0	0.0
Disposals	(36.7)	(347.5)	(4.4)
Depreciation for the period	(22.4)	(27.1)	(29.5)
Impairment losses recognised during the period	(2.1)	(11.2)	(3.5)
Impairment losses reversed during the period	19.1	114.0	1.9
Translation adjustments	0.0	0.0	0.0
Other movements	3.1	(0.1)	1.9
Non-current assets held for sale and discontinued operations	0.0	(5.2)	0.0
Carrying amount at the end of the period	792.7	817.9	1,035.2

Investment property held in linked liabilities (in € millions)	31/12/2010	31/12/2009	31/12/2008
Carrying amount at the beginning of the period	466.1	520.6	445.7
Acquisitions	3.0	7.6	87.8
Post-acquisition costs included in the carrying amount of property	0.2	0.0	0.0
Properties acquired through business combinations	0.0	0.0	0.0
Disposals	(2.5)	(30.7)	0.0
Net gains (losses) arising from remeasurement at fair value	27.6	(40.2)	(8.3)
Translation adjustments	0.0	0.0	0.0
Transfers to inventory or owner-occupied property	0.0	0.0	0.0
Transfers from inventory or owner-occupied property	0.0	0.0	0.0
Other movements	(9.1)	8.8	(4.6)
Carrying amount at the end of the period	485.3	466.1	520.6

As explained in the description of significant accounting policies, investment properties backing linked liabilities are measured at fair value, while other investment properties are measured using the cost model.

8.2 Owner-occupied property

Owner-occupied property (in € millions)	31/12/2010	31/12/2009	31/12/2008
Carrying amount at the beginning of the period	113.0	144.4	136.1
Acquisitions	50.3	1.5	13.0
Post-acquisition costs included in the carrying amount of property	1.3	1.9	3.0
Properties acquired through business combinations	0.0	0.0	0.0
Disposals	(0.7)	(0.7)	(1.8)
Depreciation for the period	(4.7)	(5.2)	(5.2)
Impairment losses recognised during the period	(0.2)	(7.1)	(1.5)
Impairment losses reversed during the period	7.2	1.0	1.7
Translation adjustments	1.4	0.9	(0.8)
Transfers	0.0	(12.6)	(0.1)
Non-current assets held for sale and discontinued operations	0.0	(11.1)	0.0
Carrying amount at the end of the period	167.6	113.0	144.4

Note 9 Investments

9.1 Investments by category

The following tables show the fair value of securities held by the Group, by category and intended holding period.

9.1.1 Investments at 31 December 2010

In € millions		Cost	Amortisation	Impairment	Fair value adjustments	Carrying amount	Unrealised gains and losses
	Fixed-rate bonds					17,931.5
	Variable-rate bonds					9,592.8
	TCNs (money market securities)					191.3
Assets at fair	Equities					6,574.1
value through profit (*)	Mutual fund units					28,276.7
	Shares in non-trading property companies					1,465.8
	Other (including lent securities and repos)					0.9
	Total					64,033.1
	Derivative instruments (negative fair value)					3,012.8
Derivative instruments	Derivative instruments (negative fair value)					(2,356.2)
	Total					656.5
	Fixed-rate bonds	174,345.7	1,252.0	(196.1)	2,342.3	177,743.9
	Variable-rate bonds	7,314.1	453.5	0.0	62.7	7,830.3
	TCNs (money market securities)	8,106.4	(10.5)	0.1	(132.8)	7,963.2
Available-for	Equities	17,123.1		(4,638.4)	4,784.6	17,269.4
sale financial	Mutual fund units	9,959.6		(441.8)	654.1	10,172.0
assets	Shares in non-trading property companies	2,255.0		(125.8)	1,011.3	3,140.5
	Non-voting loan stock	57.8		(1.1)	10.2	66.9
	Other (including lent securities and repos)	5,973.2	(50.1)	(482.5)	645.5	6,086.1
	Total	225,135.0	1,644.9	(5,885.6)	9,377.9	230,272.2
Held-to-maturity	Fixed-rate bonds	1,259.8		(47.0)		1,212.8	24.5
investments	Total	1,259.8		(47.0)	0.0	1,212.8	24.5
Loans and	Loans and receivables	3,958.6		0.0		3,958.6	0.8
receivables	Total	3,958.6		0.0	0.0	3,958.6	0.8
	Investment property at amortised cost	1,159.9	(344.7)	(22.5)		792.7	976.6
Investment property	Investment property at fair value	485.3				485.3
	Total	1,645.3	(344.7)	(22.5)		1,278.0	976.6
TOTAL				(5,955.1)	9,377.9	301,411.3	1,001.9

31/12/2010

The Group reviewed the criteria it uses to calculate impairment for available-for-sale equity instruments in the light of market conditions and this change had a positive impact of €62 million on profit net of deferred participation and deferred taxes during the second-half of the year. This calculation was based on an assumption that a prolonged decline in fair value must last for 36 months, instead of 24 months as previously.

* The classification of assets in unit-linked portfolios has been refined in the category "Assets at fair value through profit".

		Unit-linked portfolios at fair value through profit at 31 December 2010

		Carrying amount
	Unit-linked	Non unit-linked	Total
Fixed-rate bonds	5,046.8	12,884.7	17,931.5
Variable-rate bonds	8,522.8	1,070.0	9,592.8
TCNs (money market securities)	0.0	191.3	191.3
Equities	411.8	6,162.3	6,574.1
Mutual fund units	16,576.2	11,700.5	28,276.7
Shares in non-trading property companies	0.0	1,465.8	1,465.8
Other	0.0	0.9	0.9
Assets at fair value through profit	30,557.6	33,475.5	64,033.1

9.1.2 Investments at 31 December 2009

31/12/2009

In € millions		Cost	Amortisation	Impairment	Fair value adjustments	Carrying amount	Unrealised gains and losses
	Fixed-rate bonds					16,810.5
	Variable-rate bonds					10,286.9
	TCNs (money market securities)					303.0
Assets at fair value through	Equities					6,351.8
profit (*)	Mutual fund units					27,420.5
	Shares in non-trading property companies					1,458.3
	Other (including lent securities and repos)					0.5
	Total					62,631.5
Derivative	Derivative instruments (negative fair value)					2,661.0
instruments	Derivative instruments (negative fair value)					(1,970.7)
	Total					690.3
	Fixed-rate bonds	156,137.4	1,191.2	(218.1)	5,595.3	162,705.8
	Variable-rate bonds TCNs (money market	7,201.1	369.9	0.0	158.0	7,729.0
	securities)	6,382.7	(4.3)	0.1	10.1	6,388.6
Available-for	Equities Mutual fund units	16,073.8 14,589.5		(4,277.2) (467.1)	4,423.6 192.6	16,220.2 14,314.9
sale financial	Shares in non-trading
assets	property companies	2,879.6		(100.6)	1,004.6	3,783.6
	Non-voting loan stock	57.8		(0.7)	6.8	63.9
	Other (including lent securities and repos)	5,836.0	(46.1)	(617.7)	460.9	5,633.0
	Total	209,157.9	1,510.7	(5,681.3)	11,851.9	216,839.2
Held-to-maturity	Fixed-rate bonds	1,260.9		(51.0)		1,209.9	13.0
investments	Total	1,260.9		(51.0)		1,209.9	13.0
Loans and	Loans and receivables	2,451.4		0.0		2,451.4	0.2
receivables	Total	2,451.4		0.0		2,451.4	0.2
	Investment property at amortised cost	1,182.8	(339.0)	(25.9)		817.9	951.3
Investment property	Investment property at fair value	466.1				466.1
	Total	1,648.9	(339.0)	(25.9)		1,284.1	951.3
TOTAL				(5,758.2)	11,851.9	285,106.4	964.5

* The classification of assets in unit-linked portfolios has been refined in the category "Assets at fair value through profit".

9.1.3 Investments at 31 December 2008

In € millions		Cost	Amortisation	Impairment	Fair value adjustments	Carrying amount	Unrealised gains and losses
	Fixed-rate bonds					15,503.5
	Variable-rate bonds					10,393.0
	TCNs (money market securities)					407.5
Assets at fair	Equities					5,740.3
value through profit	Mutual fund units					24,104.7
	Shares in non-trading property companies Other (including lent securities and repos)					1,972.6 0.8
	Total					58,122.3
	Derivative instruments (negative fair value)					2,234.4
Derivative instruments	Derivative instruments (negative fair value)					(1,268.3)
	Total					966.1
	Fixed-rate bonds	139,473.9	1,281.7	(216.9)	1,883.9	142,422.6
	Variable-rate bonds	9,017.0	511.6	0.0	(711.9)	8,816.7
	TCNs (money market securities)	3,832.2	(6.1)	9.0	13.7	3,848.8
	Equities	15,917.0		(4,364.7)	1,096.0	12,648.2
Available-for sale financial	Mutual fund units	12,026.9		(353.3)	(643.5)	11,030.1
assets	Shares in non-trading property companies	2,035.7		(54.8)	1,483.6	3,464.5
	Non-voting loan stock	59.1		(0.5)	4.3	62.9
	Other (including lent securities and repos)	5,802.0	(22.9)	(529.4)	362.9	5,612.6
	Total	188,163.8	1,764.3	(5,510.6)	3,488.9	187,906.4
Held-to maturity	Fixed-rate bonds	989.4		(30.6)		958.8	(55.0)
investments	Total	989.4		(30.6)		958.8	(55.0)
Loans and	Loans and receivables	2,230.0				2,230.0	2.9
receivables	Total	2,230.0		0.0		2,230.0	2.9
	Investment property at amortised cost	1,482.1	(431.4)	(15.5)		1,035.2	1,311.5
Investment property	Investment property at fair value	520.6				520.6
	Total	2,002.7	(431.4)	(15.5)		1,555.8	1,311.5
TOTAL				(5,556.7)	3,488.9	251,739.4	1,259.4

31/12/2008

9.1.4 Reconciliation of insurance investments in the balance sheet to investments analysed in Notes 9.1.1, 9.1.2 and 9.1.3

In € millions	31/12/2010	31/12/2009	31/12/2008
Investments analysed in the notes	301,411.3	285,106.4	251,739.4
Balance sheet – Liabilities – Derivative instruments
(negative fair value)	(2,356.2)	(1,970.7)	(1,268.3)
Balance sheet – Assets – Insurance investments	303,767.5	287,077.1	253,007.7
Variance	0.0	0.0	0.0

9.2 Measurement of assets recognised at fair value

The following tables show financial assets classified at fair value whose prices are estimated using a valuation technique.

9.2.1				Valuation methods at 31 December 2010
-------	--	--	--	---------------------------------------	--

		31/12/2010
In € millions	Last available quotation of assets quoted in an active market	Estimated market value using valuation model based on observable market inputs	Estimated market value using valuation model based on observable market inputs	Total
Financial assets at fair value through profit 1	49,776.4	17,241.8	27.7	67,045.9
Change in fair value through profit 2	62.9	(7.4)	(31.6)	23.9
Available-for-sale financial assets	209,346.0	20,486.9	439.3	230,272.2
Change in fair value through equity 3	(276.1)	70.5	42.5	(163.1)
Held-to-maturity investments 4	999.9	231.2	6.2	1,237.3
Total financial assets	260,122.3	37,959.9	473.2	298,555.4
Financial liabilities at fair value through profit	0.0	0.0	0.0	0.0
Financial liabilities – financial instruments without DPF (excluding linked liabilities)	946.5	38.1	0.0	984.6
Financial liabilities (linked liabilities) – financial instruments without DPF	4,079.3	184.4	0.0	4,263.7
Derivative instruments	0.0	2,356.2	0.0	2,356.2
Total financial liabilities	5,025.8	2,578.7	0.0	7,604.5

(1) Includes derivative financial instruments (assets).

(2) Net of deferred participation and deferred taxes but including impairment of available-for-sale financial assets.

(3) Net of deferred participation and deferred taxes.

(4) Disclosed at fair value.

9.2.2 Valuation methods at 31 December 2009

In € millions	Last available quotation of assets quoted in an active market	Estimated market value using valuation model based on observable market inputs	Estimated market value using valuation model based on observable market inputs	Total
Financial assets at fair value through profit 1	50,615.7	14,649.2	27.7	65,292.6
Change in fair value through profit 2	111.8	(39.5)	0.0	72.3
Available-for-sale financial assets	196,644.0	19,663.3	531.9	216,839.2
Change in fair value through equity 3	864.9	(36.7)	31.0	859.2
Held-to-maturity investments 4	1,061.2	156.2	5.5	1,222.9
Total financial assets	248,320.9	34,468.7	565.1	283,354.7
Financial liabilities at fair value through profit	0.0	0.0	0.0	0.0
Financial liabilities – financial instruments without DPF (excluding linked liabilities)	785.5	2.2	0.0	787.7
Financial liabilities (linked liabilities) – financial instruments without DPF	5,108.5	41.1		5,149.6
Derivative instruments	0.0	1,970.7	0.0	1,970.7
Total financial liabilities	5,894.0	2,014.0	0.0	7,908.0

(1) Includes derivative financial instruments (assets).

(2) Net of deferred participation and deferred taxes but including impairment of available-for-sale financial assets.

(3) Net of deferred participation and deferred taxes.

(4) Disclosed at fair value.

9.2.3 Valuation methods at 31 December 2008

In € millions	Last available quotation of assets quoted in an active market	Estimated market value using valuation model based on observable market inputs	Estimated market value using valuation model based on observable market inputs	Total
Financial assets at fair value through profit 1	50,046.3	10,091.0	219.3	60,356.7
Change in fair value through profit 2	(618.8)	(553.0)	183.0	(988.8)
Available-for-sale financial assets	174,578.9	13,048.3	279.3	187,906.4
Change in fair value through equity 3	(1,351.7)	(60.6)	(63.5)	(1,475.8)
Held-to-maturity investments 4	767.7	75.6	5.5	903.8
Total financial assets	225,392.9	23,214.9	504.1	249,166.9
Financial liabilities at fair value through profit	0.0	0.0	0.0	0.0
Financial liabilities – financial instruments without DPF (excluding linked liabilities)	463.7	1.3	0.0	465.0
Financial liabilities (linked liabilities) – financial instruments without DPF	5,951.0	23.8	0.0	5,974.8
Derivative instruments	0.0	1,268.3	0.0	1,268.3
Total financial liabilities	6,414.7	1,293.4	0.0	7,708.1

(1) Includes derivative financial instruments (assets).

(2) Net of deferred participation and deferred taxes but including impairment of available-for-sale financial assets.

(3) Net of deferred participation and deferred taxes.

(4) Disclosed at fair value.

9.2.4 Reconciliation of movements for the period in financial instruments measured using a valuation model not based solely on observable market inputs

						31/12/2010
In € millions	Opening carrying amount	Acqui	sitions Maturity	Transfers to category 3 (additions)	Transfers from category 3 (disposals)	Impact of sales of securities measured at FV through profit	Impact of sales of available for-sale financial assets	Available for-sale financial asset revaluation reserve	Remeasure ment at fair value through profit	Impairment	Closing carrying amount
Financial assets at fair value
through profit	27.7	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	27.7
Available for-sale financial assets	531.9	0.0	0.0	0.0	(110.6)	0.0	(3.0)	79.5	0.0	(58.5)	439.3
Held-to maturity investments	5.5	0.0	0.0	0.0	0.0	0.7	0.0	0.0	0.0	0.0	6.2
Total financial assets	565.1	0.0	0.0	0.0	(110.6)	0.7	(3.0)	79.5	0.0	(58.5)	473.2
Total financial liabilities	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0

						31/12/2009
In € millions	Opening carrying amount	Acqui sitions	Maturity	Transfers to category 3 (additions)	Transfers from category 3 (disposals)	Impact of sales of securities measured at FV through profit	Impact of sales of available for-sale financial assets	Available for-sale financial asset revaluation reserve	Remeasure ment at fair value through profit	Impairment	Closing carrying amount
Financial assets at fair value
through profit	219.3	12.1	0.0	0.0	0.0	203.7	0.0	0.0	0.0	0.0	27.7
Available for-sale financial assets	279.3	126.9	0.0	150.4	75.4	0.0	8.9	59.6	0.0	0.0	531.9
Held-to maturity investments	5.5	0.0	0.0	0.0	0.0	0.7	0.0	0.0	0.0	0.0	5.5
Total financial assets	504.1	139.0	0.0	150.4	75.4	203.7	8.9	59.6	0.0	0.0	565.1
Total financial liabilities	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0

9.3 Repurchase agreements

The following table analyses the carrying amount of securities sold under repurchase agreements, by asset category and intended holding period.

		Carrying amount
In € millions		31/12/2010	31/12/2009	31/12/2008
Available-for-sale	Fixed-rate bonds	2,889.3	2,908.7	3,124.5
financial assets	Equities	0.0	0.0	0.0
	Total	2,889.3	2,908.7	3,124.5

9.4 Lent securities

The following table analyses the carrying amount of lent securities, by asset category and intended holding period.

			Carrying amount
In € millions		31/12/2010	31/12/2009	31/12/2008
Available-for-sale	Fixed-rate bonds	155.5	65.1	0.0
financial assets	Equities	611.4	1,300.1	931.6
	Total	766.9	1,365.2	931.6

* Pending Auditor Approval 64/129

9.5 Movements for the period

9.5.1 2010

In € millions	Opening carrying amount		Additions Disposals	Fair value adjustments	Additions to provisions for impairment	Reversals of provisions for impairment	Changes in scope of consolidation	Other	Closing carrying amount
Securities held for trading	62,631.5	367,773.2	(368,691.5)	1,330.9	0.0	0.0	0.0	988.9	64,033.1
Derivative instruments	690.3	22.6	(17.8)	(38.5)	0.0	0.0	0.0	0.0	656.5
Available-for-sale financial assets	216,839.2	89,324.3	(72,085.1)	(2,469.3)	(382.7)	170.7	0.0	(1,132.6)	230,272.2
Held-to-maturity investments	1,209.9	179.0	(281.5)	0.0	0.0	4.0	0.0	101.3	1,212.8
Loans and receivables	2,451.4	1,500.5	(1,299.4)	0.0	0.0	0.0	0.0	1,306.1	3,958.6
Investment property	1,284.1	(7.1)	(27.4)	26.7	0.0	0.0	0.0	1.7	1,278.0
TOTAL	285,106.4	458,792.6	(442,402.7)	(1,150.2)	(382.7)	174.7	0.0	1,265.4	301,411.3

9.5.2 2009

In € millions	Opening carrying amount	Additions Disposals		Fair value adjustments	Additions to provisions for impairment	Reversals of provisions for impairment	Changes in scope of consolidation	Other	Closing carrying amount
Securities held for trading	58,122.3		366,645.8 (368,502.1)	5,068.9	0.0	0.0	(29.9)	1,326.7	62,631.5
Derivative instruments	966.1	72.1	(2.4)	(348.4)	0.0	0.0	2.2	0.8	690.3
Available-for-sale financial assets	187,906.4	98,500.0	(78,055.2)	8,420.5	(579.4)	405.3	860.9	(619.2)	216,839.2
Held-to-maturity investments	958.8	342.8	(227.3)	0.0	(20.4)	0.0	0.0	156.0	1,209.9
Loans and receivables	2,230.0	472.9	(93.7)	0.0	0.0	0.0	0.0	(157.8)	2,451.4
Investment property	1,555.8	30.0	(273.5)	(40.2)	0.0	0.0	0.0	12.0	1,284.1
TOTAL	251,739.4		466,063.5 (447,154.2)	13,100.8	(599.8)	405.3	833.2	718.5	285,106.4

In € millions	Opening carrying amount	Additions	Disposals	Fair value adjustments	Additions to provisions for impairment	Reversals of provisions for impairment	Changes in scope of consolidation	Other	Closing carrying amount
Securities held for trading	74,981.0	142,408.6	(144,611.7)	(11,867.8)	0.0	0.0	(2,062.7)	(725.1)	58,122.3
Derivative instruments	516.6	174.9	(7.9)	303.1	0.0	0.0	0.0	(20.6)	966.1
Available-for-sale financial assets	180,910.8	90,993.2	(74,541.4)	(6,533.4)	(3,326.2)	342.4	45.8	15.1	187,906.4
Held-to-maturity investments	1,112.9	164.7	(181.3)	0.0	(30.6)	0.0	2.6	(109.5)	958.8
Loans and receivables	2,088.4	288.2	(226.1)	0.0	0.0	0.0	28.0	51.4	2,230.0
Investment property	1,499.3	229.9	(177.6)	(4.7)	0.0	0.0	6.9	2.0	1,555.8
TOTAL	261,109.1	234,259.4	(219,746.0)	(18,102.7)	(3,356.8)	342.4	(1,979.4)	(786.7)	251,739.4

9.6 Derivative instruments

The following table analyses derivative instruments recorded in assets (positive fair value) and in liabilities (negative fair value) by maturity.

		31/12/2010
In € millions		Due within 1 year		Due in 1 to 5 years	years	Due in 6 to 10		Due in 11 to 15 years		Due beyond 15 years		Total
	FV+	FV-	FV+	FV-	FV+	FV-	FV+	FV-	FV+	FV-	FV+	FV
Swap	46.2	(50.9)	384.9	(428.8)	315.5	(311.5)	356.5	(362.0)	902.0	(951.4)	2,005.1	(2,104.6)
Swaption	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Cap/Floor	0.1	0.0	66.3	(4.9)	847.6	(234.4)	63.9	(9.6)	0.0	0.0	977.9	(248.8)
Equity	9.0	(2.3)	15.5	(0.3)	5.3	0.0	0.0	0.0	0.0	0.0	29.8	(2.7)
Total	55.3	(53.2)	466.7	(434.0)	1,168.3	(545.9)	420.4	(371.6)	902.0	(951.4)	3,012.8	(2,356.2)

							31/12/2009
In € millions		Due within 1 year		Due in 1 to 5 years	Due in 6 to 10 years			Due in 11 to 15 years		Due beyond 15 years		Total
	FV+	FV-	FV+	FV-	FV+	FV-	FV+	FV-	FV+	FV-	FV+	FV
Swap	49.8	(221.8)	459.0	(505.0)	80.8	(84.5)	140.4	(134.3) 1,143.9		(992.1)	1,873.9	(1,937.7)
Swaption	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Cap/Floor	0.2	0.0	161.9	(12.1)	546.7	(14.5)	50.4	(5.0)	0.2	(0.2)	759.3	(31.8)
Equity	7.3	(0.2)	15.4	(1.1)	5.2	0.0	0.0	0.0	0.0	0.0	27.9	(1.3)
Total	57.2	(221.9)	636.3	(518.2)	632.7	(99.0)	190.7	(139.3) 1,144.1		(992.3)	2,661.0	(1,970.7)

		31/12/2008
In € millions		Due within 1 year		Due in 1 to 5 years	Due in 6 to 10 years			Due in 11 to 15 years		Due beyond 15 years		Total
	FV+	FV-	FV+	FV-	FV+	FV-	FV+	FV-	FV+	FV-	FV+	FV
Swap	45.9	(45.6)	193.9	(194.1)	95.8	(93.2)	29.5	(24.8)	886.3	(848.7)	1,251.5	(1,206.4)
Swaption	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Cap/Floor	1.3	(7.6)	181.5	(13.4)	432.7	(5.6)	91.9	0.0	0.0	0.0	707.4	(26.6)
Equity	48.2	(35.3)	216.5	0.0	10.9	0.0	0.0	0.0	0.0	0.0	275.5	(35.3)
Total	95.5	(88.6)	591.8	(207.5)	539.4	(98.8)	121.4	(24.8)	886.3	(848.7)	2,234.4	(1,268.3)

9.7 Credit risk

9.7.1 Analysis of the bond portfolio at 31 December 2010 by issuer rating

	31/12/2010
Rating	Bond portfolio at fair value	%
AAA	89,131.3	39.5%
AA	42,354.6	18.8%
A	69,999.1	31.1%
BBB	11,542.7	5.1%
Non-investment grade *	11,773.0	5.2%
Not rated	572.6	0.3%
TOTAL	225,373.3	100.0%

* Mostly consists of Brazilian government bonds held by Caixa Seguros and rated below BBB based on an international correlation table.

9.7.2 Analysis of the bond portfolio at 31 December 2009 by issuer rating

	31/12/2009
Rating	Bond portfolio at fair value	%
AAA	78,169.6	37.5%
AA	46,711.7	22.4%
A	64,081.2	30.8%
BBB	11,326.7	5.4%
Non-investment grade *	7,716.3	3.7%
Not rated	347.5	0.2%
TOTAL	208,353.0	100.0%

* Mostly consists of Brazilian government bonds held by Caixa Seguros and rated below BBB based on an international correlation table.

9.7.3 Analysis of the bond portfolio at 31 December 2008 by issuer rating

	31/12/2008
Rating	Bond portfolio at fair value	%
AAA	88,090.8	47.5%
AA	38,551.8	20.8%
A	48,093.2	25.9%
BBB	6,384.7	3.4%
Non-investment grade*	4,077.7	2.2%
Not rated	233.6	0.1%
TOTAL	185,431.9	100.0%

* Mostly consists of Brazilian government bonds held by Caixa Seguros and rated below BBB based on an international correlation table.

9.8 Classification of investments by type of asset and by geographic region

The purpose of this note is to provide an analysis of investments by type of financial asset and by geographic region.

9.8.1 Classification by type of asset and by geographic region at 31 December 2010

					Rest of
In € millions		France	Germany	Italy	Europe	USA	Japan	Other	Total
	Debt securities	62,336	11,189	18,867	70,509	9,762	178	20,696	193,537
Available-for-sale	Mutual fund units	8,169	160	38	1,781	0	0	23	10,172
financial assets	Equities	10,485	2,575	907	2,976	4	0	323	17,269
	Other	9,267	0	0	27	0	0	0	9,294
	Debt securities	5,393	744	3,951	5,719	3,241	0	8,668	27,716
	Mutual fund units	23,671	3	63	3,952	456	0	134	28,277
Held-for-trading	Equities	2,601	580	197	1,332	1,015	227	622	6,574
	Other	1,458	0	1	8	0	0	0	1,467
Held-to-maturity investments	Debt securities	219	0	42	103	0	0	849	1,213
Loans and receivables		3,316	0	0	634	0	0	9	3,959
Derivative instruments		657	0	0	1	0	0	(1)	657
Investment property		1,261	0	0	17	0	0	0	1,278
TOTAL		128,832	15,250	24,066	87,058	14,478	405	31,323	301,411

Geographic area of the issuer at 31 December 2010

Of which sovereign risk

Country	Gross exposure	Net exposure
France	36,767	2,398
Italy	15,197	1,115
Belgium	9,725	584
Spain	9,659	764
Austria	8,318	452
Brazil	7,849	3,933
Portugal	3,943	298
Netherlands	3,780	211
Ireland	3,499	198
Germany	3,059	177
Greece	1,974	127
Finland	1,697	107
Poland	269	27
Luxembourg	258	47
Sweden	221	11
Denmark	219	10
Slovenia	155	8
United Kingdom	134	18
Canada	105	10
Cyprus	33	29
Other	159	10
TOTAL	107,020	10,535

The Group's gross and net exposure to sovereign debt amounts to €107.0 billion and €10.5 billion respectively.

The factors accounting for the difference between gross and net exposure include the impact of deferred taxes and deferred participation based on shadow accounting principles. In accordance with these principles, a change in the deferred participation reserve is recorded to offset unrealised gains or losses on financial assets taking into account contractual participation obligations and the Group's policyholder dividend policy (see notes 3.18 and 3.13.2 respectively regarding the Group's accounting policies for more information). The relatively low weighting of contracts with a guaranteed rate of return in the Group's portfolio reinforces the validity of this approach of presenting for the impact of net exposure.

The apparent 9.8% ratio of "net exposure" to "gross exposure" therefore reflects the deferred tax impact (a factor of 67% corresponding to the impact of the average weighted tax rate on the Group's entities) and a deferred participation impact greater than that which would be assumed on the basis of the regulatory participation minimum (a 14.7% factor, supplementing the effective participation rate which corresponds to shareholders' entitlements to unrealised gains or losses, consistent with, for example, a maximum possible rate of 15% in France). The combination of these two impacts (taxes and deferred participation) results in a ratio of 9.8% (67% times 14.7%) of net exposure to gross exposure.

At 31 December 2010, the unrealised loss net of deferred taxes and deferred participation on sovereign debt issued by European States whose spreads have increased since the end of 2009 and which have received IMF loans (Greece and Ireland) amounts to €41.7 million.

In the absence of an incurred loss, none of these securities, which are mostly classified under available-for-sale financial assets, has been impaired.

		Geographic area of the issuer at 31 December 2009
					Rest of
In € millions		France	Germany	Italy	Europe	USA	Japan	Other	Total
	Debt securities	56,287	12,665	14,805	67,408	10,590	238	14,832	176,823
Available-for-sale
financial assets	Mutual fund units	12,202	115	32	1,962	0	0	4	14,315
	Equities	9,621	2,194	1,040	3,089	3	0	273	16,220
	Other	9,441	0	0	40	0	0	0	9,481
	Debt securities	4,675	825	4,715	5,661	4,085	17	7,423	27,401
Held-for-trading	Mutual fund units	23,521	1	78	3,197	538	0	86	27,421
	Equities	2,786	554	227	1,259	894	166	465	6,352
	Other	1,458	0	1	0	0	0	0	1,459
Held-to-maturity
investments	Debt securities	249	10	42	0	0	0	909	1,210
Loans and receivables		2,128	0	0	220	0	0	104	2,452
Derivative instruments		693	2	0	(12)	3	0	5	690
Investment property		1,265	0	0	19	0	0	0	1,284
TOTAL		124,324	16,365	20,938	82,844	16,113	422	24,100	285,106

9.8.2 Classification by type of asset and by geographic region at 31 December 2009

		Geographic area of the issuer at 31 December 2008
					Rest of
In € millions		France	Germany	Italy	Europe	USA	Japan	Other	Total
	Debt securities	53,827	11,954	9,796	57,673	9,466	246	12,127	155,088
Available-for-sale
financial assets	Mutual fund units	10,124	15	31	800	0	0	61	11,030
	Equities	8,030	1,605	774	1,941	3	0	296	12,648
	Other	8,058	237	56	788	0	0	0	9,140
	Debt securities	4,558	1,076	5,074	5,146	4,503	791	5,157	26,304
Held-for-trading	Mutual fund units	21,983	1	108	1,908	14	0	91	24,105
	Equities	2,569	527	210	1,013	1,004	228	190	5,740
	Other	1,973	0	0	0	0	0	0	1,974
Held-to-maturity
investments	Debt securities	247	10	42	179	47	0	434	959
Loans and receivables		2,131	0	4	85	1	0	10	2,230
Derivative instruments		963	0	0	0	0	0	3	966
Investment property		1,544	0	0	12	0	0	0	1,556
TOTAL		116,007	15,424	16,094	69,544	15,037	1,265	18,369	251,739

9.8.3 Classification by type of asset and by geographic region at 31 December 2008

9.9 Foreign currency transactions

The following tables analyse financial assets and liabilities by currency.

The amount reported for the Brazilian real corresponds to the Caixa Seguros group's total assets.

	31/12/2010
In € millions	Assets	Liabilities	Currency to be received	Currency to be delivered
USD	0	165	0	489
GBP	3	162	0	94
Yen	0	0	0	0
BRL	9,870	9,870	0	0
Other	31	41	0	0
Total	9,904	10,238	0	583

9.9.1 Foreign currency transactions at 31 December 2010

9.9.2 Foreign currency transactions at 31 December 2009

	31/12/2009
In € millions	Assets	Liabilities	Currency to be received	Currency to be delivered
USD	2	126	0	344
GBP	5	59	0	92
Yen	0	0	0	0
BRL	7,152	7,152	0	0
Other	24	23	0	0
Total	7,183	7,360	0	436

9.9.3 Foreign currency transactions at 31 December 2008

	31/12/2008
In € millions	Assets	Liabilities	Currency to be received	Currency to be delivered
USD	86	0	0	127
GBP	61	0	0	86
Yen	-	0	0	0
BRL	4,237	4,237	0	0
Other	22	21	0	0
Total	4,406	4,258	0	213

9.10 Commitments given and received

Commitments given
In € millions	31/12/2010	31/12/2009	31/12/2008
Financing commitments	19.8	9.2	3.9
Guarantees	0.0	1.5	0.7
Securities commitments	7,994.9	7,635.6	8,442.2

Under IFRS, forward financial instruments are recognised in the balance sheet.

Commitments received
In € millions	31/12/2010	31/12/2009	31/12/2008
Financing commitments	1.9	12.0	59.7
Guarantees	528.8	528.8	528.8
Securities commitments	5,997.1	3,436.2	5,887.0

Commitments given and received correspond mainly to securities pledged to the Group by reinsurers, covering the theoretical commitments accepted by reinsurers under existing agreements.

Note 10. Analysis of insurance and financial liabilities

10.1 Analysis of insurance and financial liabilities

The following tables show the sub-classifications of insurance liabilities that require separate disclosure under IFRS.

31/12/2010 In € millions Before reinsurance Net of reinsurance Reinsurance Non-life technical reserves 6,130.8 5,349.9 781.0 - Unearned premium reserves 248.9 234.7 14.2 - Outstanding claims reserves 894.1 757.4 136.8 - Bonuses and rebates (including claims equalisation reserve on Group business maintained in liabilities) 59.6 55.4 4.3 - Other technical reserves 4,928.2 4,302.4 625.7 - Liability adequacy test reserves 0.0 0.0 0.0 Life technical reserves 117,047.5 110,591.4 6,456.1 - Unearned premium reserves 112,811.6 106,414.9 6,396.7 - Outstanding claims reserves 1,491.3 1,434.9 56.4 - Policyholder surplus reserve 2,527.0 2,524.0 3.0 - Other technical reserves 217.6 217.6 0.0 - Liability adequacy test reserves 0.0 0.0 0.0 Financial instruments with DPF 154,561.6 154,554.0 7.6 - Unearned premium reserves 151,793.6 151,786.0 7.6 - Outstanding claims reserves 1,956.1 1,956.1 0.0 - Policyholder surplus reserve 810.4 810.4 0.0 - Other technical reserves 1.5 1.5 0.0 - Liability adequacy test reserves 0.0 0.0 0.0 Financial instruments without DPF 5,248.3 5,046.7 201.6 Derivative financial instruments separated from the host contract 0.0 0.0 0.0 Deferred participation reserve 5,165.8 5,165.8 0.0 Total insurance and financial liabilities 288,154.0 280,707.8 7,446.2 Deferred participation asset 0.0 0.0 0.0

10.1.1 Analysis of insurance and financial liabilities at 31 December 2010

		31/12/2009
	Before	Net of
In € millions	reinsurance	reinsurance	Reinsurance
Non-life technical reserves	5,454.8	4,763.1	691.7
- Unearned premium reserves	209.2	195.9	13.3
- Outstanding claims reserves	772.2	670.0	102.3
- Bonuses and rebates (including claims equalisation
reserve on Group business maintained in liabilities)	76.3	68.7	7.6
- Other technical reserves	4,397.0	3,828.6	568.5
- Liability adequacy test reserves	0.0	0.0	0.0
Life technical reserves	101,638.6	95,696.6	5,942.0
- Unearned premium reserves	98,409.1	92,517.5	5,891.5
- Outstanding claims reserves	1,144.2	1,097.9	46.3
- Policyholder surplus reserve	1,963.6	1,959.5	4.2
- Other technical reserves	121.6	121.6	0.0
- Liability adequacy test reserves	0.0	0.0	0.0
Financial instruments with DPF	151,676.3	151,672.7	3.7
- Unearned premium reserves	149,363.2	149,359.6	3.7
- Outstanding claims reserves	1,752.0	1,752.0	0.0
- Policyholder surplus reserve	561.1	561.1	0.0
- Other technical reserves	0.0	0.0	0.0
- Liability adequacy test reserves	0.0	0.0	0.0
Financial instruments without DPF	5,937.3	5,695.3	242.1
Derivative financial instruments separated from the
host contract	0.0	0.0	0.0
Deferred participation reserve	6,889.8	6,889.8	0.0
Total insurance and financial liabilities	271,596.8	264,717.3	6,879.4
Deferred participation asset	0.0.0	0.0	0.0

10.1.2 Analysis of insurance and financial liabilities at 31 December 2009

10.1.3		Analysis of insurance and financial liabilities at 31 December 2008
--------	--	---------------------------------------------------------------------	--	--

	31/12/2008
In € millions	Before reinsurance	Net of reinsurance	Reinsurance
Non-life technical reserves	5,227.0	4,551.4	675.6
- Unearned premium reserves	184.4	168.1	16.3
- Outstanding claims reserves	750.4	677.4	73.0
- Bonuses and rebates (including claims equalisation
reserve on Group business maintained in liabilities)	56.5	53.6	3.0
- Other technical reserves	4,235.7	3,652.4	583.3
- Liability adequacy test reserves	0.0	0.0	0.0
Life technical reserves	81,069.3	75,650.1	5,419.1
- Unearned premium reserves	79,590.2	74,215.6	5,374.6
- Outstanding claims reserves	1,160.7	1,120.4	40.3
- Policyholder surplus reserve	208.6	204.4	4.2
- Other technical reserves	109.8	109.8	0.0
- Liability adequacy test reserves	0.0	0.0	0.0
Financial instruments with DPF	148,776.8	148,776.5	0.3
- Unearned premium reserves	145,111.0	145,110.7	0.3
- Outstanding claims reserves	1,727.1	1,727.1	0.0
- Policyholder surplus reserve	1,938.5	1,938.5	0.0
- Other technical reserves	0.1	0.1	0.0
- Liability adequacy test reserves	0.0	0.0	0.0
Financial instruments without DPF	6,439.8	6,229.5	210.4
Derivative financial instruments separated from the
host contract	0.0	0.0	0.0
Deferred participation reserve (*)	356.7	356.7	0.0
Other (net deferred acquisition costs)	0.0	0.0	0.0
Total insurance and financial liabilities	241,869.7	235,564.4	6,305.3
Deferred participation asset (*)	(1,175.3)	(1,175.3)	0.0

* A net deferred participation asset was booked in the balance sheet in 2008 to reflect the unrealised losses recognised over the period in line with shadow accounting principles. The recoverability test (described in Note 3.12.1) conducted on 31 December 2008 has demonstrated the Group's capacity to recover this amount over time from future or unrealised participations.

10.2 Change in technical reserves

This note presents changes in technical reserves by category, such as those arising from changes in the assumptions applied to measure insurance liabilities. Each change with a material impact on the consolidated financial statements is shown separately. Movements are presented before and after reinsurance.

10.2.1 Changes in mathematical reserves – life insurance

10.2.1.1 Changes in mathematical reserves – life insurance – 2010

		31/12/2010
In € millions	Before reinsurance	Net of reinsurance	Reinsurance
Mathematical reserves at the beginning of the period	247,772.8	241,877.6	5,895.2
Premiums	28,193.1	27,803.6	389.6
Extinguished liabilities (benefit payments)	(19,555.6)	(19,322.9)	(232.7)
Locked-in gains	8,220.1	7,797.8	422.3
Change in value of linked liabilities	514.9	514.9	0.0
Changes in scope (acquisitions/divestments)	11.0	(2.7)	13.7
Asset loading	(1,303.4)	(1,303.4)	0.0
Surpluses/deficits	(8.1)	(8.1)	0.0
Currency effect	546.7	546.7	0.0
Changes in assumptions	(17.2)	(17.5)	0.3
Newly-consolidated companies	0.0	0.0	0.0
Non-current liabilities associated with assets held for sale	0.0	0.0	0.0
Other	230.9	315.0	(84.1)
Mathematical reserves at the end of the period	264,605.2	258,200.9	6,404.3

10.2.1.2 Changes in mathematical reserves – life insurance – 2009

	31/12/2009
In € millions	Before reinsurance	Net of reinsurance	Reinsurance
Mathematical reserves at the beginning of the period	224,701.2	219,326.3	5,374.9
Premiums	28,849.2	28,299.5	549.7
Extinguished liabilities (benefit payments)	(17,490.5)	(17,265.4)	(225.1)
Locked-in gains	8,431.1	8,149.6	281.5
Change in value of linked liabilities	3,317.6	3,317.6	0.0
Changes in scope (acquisitions/divestments)	(84.9)	(84.9)	0.0
Asset loading	(1,116.0)	(1,116.0)	0.0
Surpluses/deficits	(5.0)	(5.0)	0.0
Currency effect	699.7	699.7	0.0
Changes in assumptions	(10.5)	(20.4)	9.9
Consolidation of Barclays Vida y Pensiones	956.0	956.0	0.0
Non-current liabilities associated with assets held for sale	(238.2)	(238.1)	(0.1)
Other	(236.9)	(141.3)	(95.6)
Mathematical reserves at the end of the period	247,772.8	241,877.6	5,895.2

	31/12/2008
In € millions	Before reinsurance	Net of reinsurance	Reinsurance
Mathematical reserves at the beginning of the period	216,835.0	211,703.6	5,131.4
Premiums	24,530.7	24,049.3	481.4
Extinguished liabilities (benefit payments)	(17,456.2)	(17,238.7)	(217.5)
Locked-in gains	7,213.5	7,109.3	104.2
Change in value of linked liabilities	(5,591.2)	(5,591.2)	0.0
Changes in scope (acquisitions/divestments)	(20.2)	(20.0)	(0.2)
Asset loading	(1,016.7)	(1,016.7)	0.0
Surpluses/deficits	0.0	0.0	0.0
Currency effect	(435.0)	(435.0)	0.0
Changes in assumptions	0.2	0.2	0.0
Consolidation of Marfin Insurance Holdings Ltd	467.1	467.1	0.0
Other	174.0	298.4	(124.4)
Mathematical reserves at the end of the period	224,701.2	219,326.3	5,374.9

10.2.1.3 Changes in mathematical reserves – life insurance – 2008

10.2.2 Changes in technical reserves – non-life insurance

10.2.2.1 Changes in technical reserves – non-life insurance – 2010

	31/12/2010
In € millions	Before reinsurance	Net of reinsurance	Reinsurance
Outstanding claims reserves at the beginning of the period	772.2	669.9	102.3
Claims expenses for the period	933.3	722.5	210.8
Prior period surpluses/deficits	(3.8)	(3.8)	0.0
Total claims expenses	929.4	718.7	210.8
Current period claims settled during the period	(817.2)	(644.7)	(172.5)
Prior period claims settled during the period	(16.7)	(12.9)	(3.8)
Total paid claims	(833.8)	(657.6)	(176.3)
Changes in scope of consolidation and changes of method	0.0	0.0	0.0
Translation adjustments	26.3	26.3	0.0
Newly-consolidated companies	0.0	0.0	0.0
Non-current liabilities associated with assets held for sale and discontinued operations	0.0	0.0	0.0
Outstanding claims reserves at the end of the period	894.1	757.3	136.8

	31/12/2009
In € millions	Before reinsurance	Net of reinsurance	Reinsurance
Outstanding claims reserves at the beginning of the period	750.4	677.4	73.0
Claims expenses for the period	868.5	716.8	151.7
Prior period surpluses/deficits	64.6	26.7	37.9
Total claims expenses	933.1	743.5	189.6
Current period claims settled during the period	(283.5)	(204.8)	(78.7)
Prior period claims settled during the period	(525.8)	(450.8)	(75.0)
Total paid claims	(809.3)	(655.6)	(153.6)
Changes in scope of consolidation and changes of method	5.1	2.8	2.3
Translation adjustments	34.4	34.4	0.0
Newly-consolidated companies	0.0	0.0	0.0
Non-current liabilities associated with assets held for sale and discontinued operations	(141.5)	(132.6)	(8.9)
Outstanding claims reserves at the end of the period	772.2	669.9	102.3

10.2.2.3 Changes in technical reserves – non-life insurance – 2008

	31/12/2008
In € millions	Before reinsurance	Net of reinsurance	Reinsurance
Outstanding claims reserves at the beginning of the period	678.5	608.7	69.8
Claims expenses for the period	1,416.1	1,275.3	140.8
Prior period surpluses/deficits	(3.3)	(1.0)	(2.3)
Total claims expenses	1,412.8	1,274.3	138.5
Current period claims settled during the period	(1,322.5)	(1,172.6)	(149.9)
Prior period claims settled during the period	(37.4)	(34.9)	(2.5)
Total paid claims	(1,359.9)	(1,207.5)	(152.4)
Changes in scope of consolidation and changes of method	0.0	0.0	0.0
Translation adjustments	(22.9)	(22.9)	0.0
Consolidation of Marfin Insurance Holdings Ltd	42.0	24.9	17.1
Outstanding claims reserves at the end of the period	750.4	677.5	73.0

	31/12/2010
In € millions	Before reinsurance	Net of reinsurance	Reinsurance
Mathematical reserves at the beginning of the period	5,937.3	5,695.2	242.1
Premiums	1,038.0	1,023.8	14.2
Extinguished liabilities (benefit payments)	(2,074.0)	(2,001.7)	(72.3)
Locked-in gains	75.5	75.5	0.0
Change in value of linked liabilities	183.8	166.2	17.6
Changes in scope (acquisitions/divestments)	(16.5)	(16.5)	0.0
Currency effect	96.9	96.9	0.0
Newly-consolidated companies	0.0	0.0	0.0
Non-current liabilities associated with assets held for sale and discontinued operations	0.0	0.0	0.0
Other	7.2	7.2	0.0
Mathematical reserves at the end of the period	5,248.3	5,046.7	201.6

10.2.3 Changes in mathematical reserves – financial instruments with DPF

		31/12/2009
In € millions	Before reinsurance	Net of reinsurance	Reinsurance
Mathematical reserves at the beginning of the period	6,439.9	6,229.5	210.4
Premiums	888.6	888.6	0.0
Extinguished liabilities (benefit payments)	(2,526.1)	(2,526.1)	0.0
Locked-in gains	65.7	65.7	0.0
Change in value of linked liabilities	595.8	595.8	0.0
Changes in scope (acquisitions/divestments)	21.2	21.2	0.0
Currency effect	153.5	153.5	0.0
Consolidation of Barclays Vida y Pensiones	261.1	229.4	31.7
Non-current liabilities associated with assets held for sale and discontinued operations	(17.3)	(17.3)	0.0
Other	54.9	54.9	0.0
Mathematical reserves at the end of the period	5,937.3	5,695.2	242.1

		31/12/2008
In € millions	Before reinsurance	Net of reinsurance	Reinsurance
Mathematical reserves at the beginning of the period	7,881.2	7,553.8	327.4
Premiums	795.0	768.8	26.2
Extinguished liabilities (benefit payments)	(961.8)	(935.0)	(26.8)
Locked-in gains	43.9	43.9	0.0
Change in value of linked liabilities	(1,203.5)	(1,087.1)	(116.4)
Changes in scope (acquisitions/divestments)	(13.1)	(13.1)	0.0
Currency effect	(111.8)	(111.8)	0.0
Newly-consolidated companies	0.0	0.0	0.0
Other	10.0	10.0	0.0
Mathematical reserves at the end of the period	6,439.9	6,229.5	210.4

10.3 Deferred participation (shadow accounting adjustments)

This note breaks down the sources of deferred participation arising from the use of shadow accounting. The amount of deferred participation calculated for each entity under shadow accounting principles is recognised either in liabilities as a deferred participation reserve, or in assets as a deferred participation asset (see Note 3.12.1). The Group recognised a deferred participation reserve amounting to €5,165.8 million at 31 December 2010.

	31/12/2010		31/12/2009		31/12/2008
Deferred participation *	Amount	Average rate	Amount	Average rate	Amount	Average rate
Deferred participation on remeasurement at fair value through profit	(4,968.2)		(5,441.1)	ns	5,520.0)	ns
Deferred participation on remeasurement at fair value recognised in equity Deferred participation on adjustment of capitalisation reserve	7,672.0	-81.8%	9,818.4	-82.8%	2,829.7	-81.1%
Deferred participation on adjustment of claims equalisation reserves	235.9	0.0%	243.8	100.0%	208.4	100.0%
Deferred participation on other consolidation adjustments	2,226.2		2,268.7		1,663.1
Total	5,165.8		6,889.8		(818.7)

* Positive and negative balances reflect positive and negative revaluation, respectively.

	31/12/2010	31/12/2009	31/12/2008
Amount at the beginning of the period	6,889.8	(818.7)	8,675.0
Deferred participation on remeasurement at fair value through profit	472.9	78.9	(6,888.4)
Deferred participation on remeasurement at fair value recognised in equity	(2,146.4)	6,988.7	(4,256.5)
Effect of change in recoverability rate	0.0	0.0	0.0
Other movements	(50.4)	640.9	1,651.2
Deferred participation at the end of the period	5,165.8	6,889.8	(818.7)

10.4 Main assumptions

The insurer's commitments differ according to the type of contract, as follows:

Savings contracts: mainly financial commitments

Savings contracts fall into two broad categories:

non-unit-linked contracts, where the insurer is committed to paying a minimum guaranteed yield plus a share of the investment yield. The yield guarantee may be for a fixed period (generally eight years) or for the entire duration of the contract. The insurer has an obligation to pay the guaranteed capital when requested to do so by the customer, whatever the prevailing market conditions at the time.

Commitments under savings contracts are managed primarily by matching asset and liability maturities;

unit-linked contracts, where the policyholder bears the entire investment risk and the insurer's commitment is limited to any additional guarantees, such as a capital guarantee in the case of death.

Pension products: technical and financial commitments

Commitments associated with annuity-based pension products depend on:

• the benefit payment period, which is not known in advance;
• the interest rate, corresponding to the return on the capital managed by the insurer.

For these contracts, results are determined by long-term financial management policies and actual mortality rates compared with assumptions.

Personal risk contracts: mainly technical commitments

The risk associated with these contracts is determined primarily by the insured's age, gender, socio-professional category and job.

The Group implements risk selection and reinsurance policies, and monitors statistical data concerning the policyholder base and related loss ratios.

The components of technical reserves are defined in Articles R.331-3 of the French Insurance Code for life insurance business and R.331-6 for non-life business.

Measurement of insurance and financial liabilities

Insurance and financial liabilities are measured as follows:

• insurance contracts (IFRS 4) are measured using the same policies as under French GAAP (or local GAAP in the case of foreign subsidiaries);
• financial instruments with DPF are measured in accordance with local GAAP;
• financial instruments without DPF are measured at fair value.

10.5 Changes in financial liabilities –linked liabilities

The following table shows changes in financial liabilities related to linked liabilities.

10.5.1 2010

	31/12/2010
In € millions	Before reinsurance	Net of reinsurance
Technical reserves at the beginning of the period	31,441.6	31,421.1
(+) Entries (new contracts, transfers between contracts, replacements)	4,177.4	4,177.4
(+/-) Revaluation (fair value adjustments, incorporation of policyholder surplus)	994.3	994.3
(-) Exits (paid benefits and expenses)	(3,046.7)	(3,046.7)
(+/-) Entries/exits related to portfolio transfers	(872.1)	(872.1)
(-) Loading deducted from assets	(94.5)	(94.5)
(+/-) Surpluses/deficits	0.0	0.0
(+/-) Effect of changes in assumptions	0.0	0.0
(+/-) Translation adjustment	521.1	521.1
(+/-) Newly-consolidated companies	0.0	0.0
Other	25.2	25.2
Technical reserves at the end of the period*	33,146.3	33,125.8

* Not including linked liability financial instruments without DPF, accounted for in accordance with IAS 39. The table below reconciles the amounts shown in the above tables to unit-linked liabilities reported in the balance sheet.

10.5.2 2009

	31/12/2009
In € millions	Before reinsurance	Net of reinsurance
Technical reserves at the beginning of the period	27,797.8	27,777.3
(+) Entries (new contracts, transfers between contracts, replacements)	2,803.9	2,803.9
(+/-) Revaluation (fair value adjustments, incorporation of policyholder surplus)	3,887.0	3,887.0
(-) Exits (paid benefits and expenses)	(2,465.8)	(2,465.8)
(+/-) Entries/exits related to portfolio transfers	(1,506.2)	(1,506.2)
(-) Loading deducted from assets	(83.9)	(83.9)
(+/-) Surpluses/deficits	0.0	0.0
(+/-) Effect of changes in assumptions	0.0	0.0
(+/-) Translation adjustment	652.8	652.8
(+/-) Consolidation of Barclays Vida y Pensiones	237.2	237.2
Other	118.8	118.8
Technical reserves at the end of the period*	31,441.6	31,421.1

* Not including linked liability financial instruments without DPF, accounted for in accordance with IAS 39. The table below reconciles the amounts shown in the above tables to unit-linked liabilities reported in the balance sheet.

10.5.3 2008

	31/12/2008
In € millions	Before reinsurance	Net of reinsurance
Technical reserves at the beginning of the period	34,141.8	34,141.8
(+) Entries (new contracts, transfers between contracts, replacements)	3,663.9	3,663.9
(+/-) Revaluation (fair value adjustments, incorporation of policyholder surplus)	(5,367.6)	(5,367.6)
(-) Exits (paid benefits and expenses)	(2,171.0)	(2,191.5)
(+/-) Entries/exits related to portfolio transfers	(2,230.8)	(2,230.8)
(-) Loading deducted from assets	(89.7)	(89.7)
(+/-) Surpluses/deficits	0.0	0.0
(+/-) Effect of changes in assumptions	0.0	0.0
(+/-) Translation adjustment	(396.0)	(396.0)
(+/-) Consolidation of Marfin Insurance Holdings Ltd	361.3	361.3
Other	(114.0)	(114.0)
Technical reserves at the end of the period*	27,797.8	27,777.3

* Not including linked liability financial instruments without DPF, accounted for in accordance with IAS 39. The table below reconciles the amounts shown in the above tables to unit-linked liabilities reported in the balance sheet.

In € millions	31/12/2010	31/12/2009	31/12/2008
Financial liabilities – linked liability financial instruments – balance sheet	37,410.0	36,591.3	33,772.7
Changes in financial liabilities – linked liabilities other than IAS 39	33,146.3	31,441.6	27,797.8
Changes in financial liabilities – linked liabilities - IAS 39	4,263.7	5,149.7	5,974.9
Total	0.0	0.0	0.0

10.6 Credit risk on reinsured business

The purpose of this note is to provide an analysis of credit risk related to outward reinsurance contracts by reinsurer, for CNP France and the main subsidiaries in the Group.

a) Excess-of-loss contracts have been placed with reinsurers who are rated between A-and AAA;

b) For quota-share treaties where the asset is not held by CNP Assurances, the breakdown of ceded insurance liabilities by reinsurer is as follows.

31/12/2010		Ceded technical reserves
In € millions	Credit rating	Amount	%
First reinsurer	AA-	3,066.0	41.2%
Second reinsurer	A-	2,129.1	28.6%
Third reinsurer	AA-	1,062.9	14.3%
Fourth reinsurer	AA-	494.3	6.6%
Other reinsurers	-	693.9	9.3%
Total		7,446.2

10.6.1 Credit risk on reinsured business at 31 December 2010

10.6.2 Credit risk on reinsured business at 31 December 2009

31/12/2009		Ceded technical reserves
In € millions	Credit rating	%
First reinsurer	A+	2,811.5	40.9%
Second reinsurer	A+	1,945.3	28.3%
Third reinsurer	AA	975.9	14.2%
Fourth reinsurer	A-	507.4	7.4%
Other reinsurers	-	639.3	9.3%
Total		6,879.4

10.6.3 Credit risk on reinsured business at 31 December 2008

31/12/2008		Ceded technical reserves
In € millions	Credit rating	Amount	%
First reinsurer	AA-	2,624.8	41.6%
Second reinsurer	A	1,801.1	28.6%
Third reinsurer	AA	905.2	14.4%
Fourth reinsurer	AA-	493.5	7.8%
Other reinsurers	-	480.7	7.6%
Total		6,305.3

Note 11. Subordinated debt

Subordinated debt is measured at amortised cost.

11.1 Subordinated debt at 31 December 2010

In € millions	Issuance date	Interest rate	Currency Amount		Due within 1 year	Due in 1 to 5 years	Due in 5 to 10 years	Due in 10 to 15 years	Due beyond 15 years	Undated	Fair value*
	Subordinated notes			2,197.0	0.0	14.0	0.0	1,250.0	750.0	183.0	2,116.5
CNP Assurances	Sep-10	6.00% (Actual/Actual ) until 2020, then 3-month Euribor (Actual/360) + 447.2 bps	€	750.0					750.0		709.5
CNP UNICREDIT VITA	Jun-09	6-month Euribor +3.25%	€	14.0		14.0					14.3
CNP Assurances	Nov-04	3-month Euribor +70% until 2016	€	93.0						93.0	74.5
CNP Assurances	Nov-04	4.93% until 2016 then Euribor +1.6% from 15.11.16	€	90.0						90.0	72.9
CNP Assurances	Jun-03	4.7825% until 2013 then Euribor +2% from 24.06.13	€	200.0				200.0			198.9
CNP Assurances	Apr-03	5.25% until 2013 then Euribor +2% from 11.07.13	€	300.0				300.0			301.5
CNP Assurances	Apr-01	5.75% until 2011 then Euribor +1.57% from 11.07.11	€	150.0				150.0			149.0
	May-01		€	50.0				50.0			49.7
	Jul-01		€	50.0				50.0			49.7
	Dec-01		€	150.0				150.0			149.0
	Feb-02		€	100.0				100.0			99.3
	Apr-02		€	250.0				250.0			248.3
Perpetual subordinated notes				45.0	0.0	0.0	0.0	0.0	0.0	45.0	42.2
CNP UNICREDIT VITA	Oct-03	6-month Euribor +1.5%	€	45.0						45.0	42.2
Total				2,242.0	0.0	14.0	0.0	1,250.0	750.0	228.0	2,158.7

31/12/2010

* Pending Auditor Approval 84/129

* The fair value of financial liabilities (IAS 39) is disclosed in accordance with IFRS 7. If subordinated debt had been measured at fair value through profit instead of at amortised cost, the impact would have been €83.4 million at 31 December 2010. The fair values of unit-linked liabilities are presented in Note 10.5. The fair values of financial instruments without DPF (Note 10.1) are not presented as the amounts involved are not material. IFRS 7 includes certain exemptions from the requirement to disclose the fair values of financial instruments with DPF. The Group considers that it fulfils the exemption criteria, particularly in light of the work underway in connection with IFRS 4, Phase 2, regarding the fair value of these instruments.

On 14 September 2010, CNP Assurances issued €750 million worth of subordinated notes due on September 14, 2040, with an initial early redemption option at par on 14 September 2020.

11.2 Subordinated debt at 31 December 2009

In € millions	Issuance date	Interest rate	Currency	Amount	Due within 1 year	Due in 1 to 5 years	Due in 5 to 10 years	Due in 10 to 15 years	Due beyond 15 years	Undated	Fair value*
Subordinated notes				1,447.0	0.0	14.0		0.0 1,250.0	0.0	183.0	1,334.7
CNP UNICREDIT VITA	Jun-09	6-month Euribor +3.25%	€	14.0		14.0					14.3
CNP Assurances	Nov-04	3-month Euribor +0.70% until 2016	€	93.0						93.0	80.1
CNP Assurances	Nov-04	4.93% until 2016 then Euribor +1.6% from 15.11.16	€	90.0						90.0	82.8
CNP Assurances	Jun-03	4.7825% until 2013 then Euribor +1.6% from 15.11.16	€	200.0				200.0			178.0
CNP Assurances	Apr-03	5.25% until 2013 then Euribor +2.00% from 11.07.13	€	300.0				300.0			267.0
CNP Assurances	Apr-01	5.75% until 2011 then Euribor +1.57% from 11.07.11	€	150.0				150.0			712.5
	May-01		€	50.0				50.0			0.0
	Jul-01		€	50.0				50.0			0.0
	Dec-01		€	150.0				150.0			0.0
	Feb-02		€	100.0				100.0			0.0
	Apr-02		€	250.0				250.0			0.0
Perpetual subordinated notes CNP UNICREDIT		6-month Euribor		45.0	0.0	0.0	0.0	0.0	0.0	45.0	46.4
VITA	Oct.-03	+1.50%	€	45.0						45.0	46.4
Total				1,492.0	0.0	14.0		0.0 1,250.0	0.0	228.0	1,381.0

31/12/2009

Subordinated notes issued by CNP Assurances with a carrying amount of €403 million matured in May 2009.

* The fair value of financial liabilities (IAS 39) is disclosed in accordance with IFRS 7. If subordinated debt had been measured at fair value through profit instead of at amortised cost, the impact would have been €73.9 million at 31 December 2009. The fair values of unit-linked liabilities are presented in Note 10.5. The fair values of financial instruments without DPF (Note 10.1) are not presented as the amounts involved are not material. IFRS 7 includes certain exemptions from the requirement to disclose the fair values of financial instruments with DPF. The Group considers that it fulfils the exemption criteria, particularly in light of the work underway in connection with IFRS 4, Phase 2, regarding the fair value of these instruments.

11.3 Subordinated debt at 31 December 2008

In € millions	Issuance date	Interest rate	Currency Amount		Due within 1 year	Due in 1 to 5 years	Due in 5 to 10 years	Due in 10 to 15 years	Due beyond 15 years	Undated	Fair value*
Subordinated notes				1,836.0	403.0	0.0	0.0	1,250.0	0.0	183.0	1,494.7
CNP Assurances	Nov-04	3-month Euribor +0.70% until 2016	€	93.0						93.0	55.1
CNP Assurances	Nov-04	4.93% until 2016 then Euribor +1.60% from 15.11.16	€	90.0						90.0	54.8
CNP Assurances	Jun-03	4.7825% until 2013 then Euribor +1.60% from 15.11.16	€	200.0				200.0			147.4
CNP Assurances	Apr-03	5.25% until 2013 then Euribor 2.00% from 11.07.13	€	300.0				300.0			227.2
CNP Assurances	Apr-01	5.75% until 2011 then Euribor +1.57% from 11.07.11	€	150.0				150.0			121.8
	May-01		€	50.0				50.0			40.6
	Jul-01		€	50.0				50.0			40.6
	Dec-01		€	150.0				150.0			121.8
	Feb-02		€	100.0				100.0			81.2
	Apr-02		€	250.0				250.0			203.0
CNP Assurances	May-99	4.63%	€	403.0	403.0						401.1
Perpetual subordinated notes				45.0	0.0	0.0	0.0	0.0	0.0	45.0	34.1
CNP UNICREDIT VITA	Oct-03	6-month Euribor +1.50%	€	45.0						45.0	34.1
Total				1,881.0	403.0	0.0	0.0	1,250.0	0.0	228.0	1,528.8

31/12/2008

* The fair value of financial liabilities (IAS 39) is disclosed in accordance with IFRS 7. If subordinated debt had been measured at fair value through profit instead of at amortised cost, the impact would have been €224 million at 31 December 2008. The fair values of unit-linked liabilities are presented in Note 10.5. The fair values of financial instruments without DPF (Note 10.1) are not presented as the amounts involved are not material. IFRS 7 includes certain exemptions from the requirement to disclose the fair values of financial instruments with DPF. The Group considers that it fulfils the exemption criteria, particularly in light of the work underway in connection with IFRS 4, Phase 2, regarding the fair value of these instruments.

* Pending Auditor Approval 87/129

Note 12. Insurance and reinsurance receivables

12.1 Insurance and reinsurance receivables

This note discloses details of insurance and reinsurance receivables at 31 December 2010, 2009 and 2008:

In € millions	31/12/2010	31/12/2009	31/12/2008
Earned premiums not yet written	2,208.1	2,406.9	2,830.2
Other insurance receivables	969.3	543.6	425.2
Reinsurance receivables	78.7	84.4	83.8
Total	3,256.1	3,034.9	3,339.2
Doubtful receivables	3.1	3.0	3.0

Analysis by maturity

	31/12/2010
In € millions	Due within 1 year	Due in 1 to 5 years	Due beyond 5 years
Earned premiums not yet written	2,197.8	10.3	0.0
Other insurance receivables	939.9	29.4	0.0
Reinsurance receivables	78.6	0.1	0.0
Total	3,216.3	39.8	0.0

	31/12/2009
In € millions	Due within 1 year	Due in 1 to 5 years	Due beyond 5 years
Earned premiums not yet written	2,406.9	0.0	0.0
Other insurance receivables	539.2	4.5	0.0
Reinsurance receivables	84.0	0.1	0.3
Total	3,030.1	4.6	0.3

	31/12/2008
In € millions	Due within 1 year	Due in 1 to 5 years	Due beyond 5 years
Earned premiums not yet written	2,830.2	0.0	0.0
Other insurance receivables	420.8	4.5	(0.1)
Reinsurance receivables	83.4	0.1	0.4
Total	3,334.4	4.6	0.3

12.2 Other receivables

In € millions	31/12/2010	31/12/2009	31/12/2008
Employee advances	1.0	1.3	0.8
Accrued payroll and other taxes	547.7	462.6	497.3
Sundry receivables	1,234.1	764.7	1,682.4
Total	1,782.8	1,228.6	2,180.4

Note 13. Deferred taxes

This note presents total deferred tax assets and liabilities by type of temporary difference.

At 31 December 2010, temporary differences in the capitalisation reserve were impacted by the related French tax reform (see Note 1.5).

Sources of temporary differences in € millions	31/12/2010
	Assets	Liabilities	Net
Goodwill	35.2	(4.1)	31.1
Value of business in force		(79.3)	(79.3)
Other intangible assets			0.0
Investment property		(53.6)	(53.6)
Financial assets	15.9	(2,189.2)	(2,173.3)
Investments in associates			0.0
Reinsurers' share of insurance and financial liabilities	6.1		6.1
Owner-occupied property		(1.0)	(1.0)
and other property and equipment			0.0
Deferred acquisition costs			0.0
Other assets	170.4		170.4
Capitalisation reserve			0.0
Subordinated debt		(5.2)	(5.2)
Provisions	102.4		102.4
Financing liabilities			0.0
Insurance and financial liabilities			0.0
Deferred participation asset/reserve	1,700.4	(9.1)	1,691.3
Other liabilities		(4.2)	(4.2)
Credit from tax loss carryforwards			0.0
Asset-liability netting	(1,831.8)	1,831.8	0.0
Net deferred tax asset or liability	198.6	(513.9)	(315.3)

Sources of temporary differences in € millions	31/12/2009
	Assets	Liabilities	Net
Goodwill	38.3	(4.0)	34.3
Value of business in force	1.1	(12.3)	(11.2)
Other intangible assets	0.0	0.0	0.0
Investment property	0.0	(56.5)	(56.5)
Financial assets	3.2	(2,870.1)	(2,866.9)
Investments in associates	0.0	(2.7)	(2.7)
Reinsurers' share of insurance and financial liabilities	5.0	0.0	5.0
Owner-occupied property and other property and equipment	0.0	(1.1)	(1.1)
Deferred acquisition costs	0.0	0.0	0.0
Other assets	167.4	0.0	167.4
Capitalisation reserve	0.0	(554.0)	(554.0)
Subordinated debt	0.0	(4.8)	(4.8)
Provisions	58.7	0.0	58.7
Financing liabilities	0.0	0.0	0.0
Insurance and financial liabilities	0.0	(1.1)	(1.1)
Deferred participation asset/reserve	2,234.1	(4.4)	2,229.7
Other liabilities	0.0	(1.8)	(1.8)
Credit from tax loss carryforwards	0.0	0.0	0.0
Asset-liability netting	(2,380.1)	2,380.1	0.0
Net deferred tax asset or liability	127.7	(1,132.7)	(1,005.0)

Sources of temporary differences in € millions	31/12/2008
	Assets	Liabilities	Net
Goodwill	42.2	(0.1)	42.1
Value of business in force	0.0	(62.4)	(62.4)
Other intangible assets	0.0	0.0	0.0
Investment property	8.9	(62.5)	(53.6)
Financial assets	1,219.7	(421.8)	797.9
Investments in associates	0.0	0.0	0.0
Reinsurers' share of insurance and financial liabilities	5.2	0.0	5.2
Owner-occupied property and other property and equipment	0.0	(1.2)	(1.2)
Deferred acquisition costs	0.0	0.0	0.0
Other assets	51.5	0.0	51.5
Capitalisation reserve	0.0	(540.4)	(540.4)
Subordinated debt	0.0	(5.4)	(5.4)
Provisions	87.4	0.0	87.4
Financing liabilities	0.0	0.0	0.0
Insurance and financial liabilities	0.0	(21.4)	(21.4)
Deferred participation asset/reserve	315.9	(1,080.6)	(764.7)
Other liabilities	0.0	(82.2)	(82.2)
Credit from tax loss carryforwards	0.0	0.0	0.0
Asset-liability netting	(1,657.3)	1,657.3	0.0
Net deferred tax asset or liability	73.5	(620.7)	(547.2)

Note 14. Provisions

This note analyses provisions for claims and litigation and other provisions.

14.1 Provisions – 2010

	Provisions for claims	Other
In € millions	and litigation	provisions	Total
Carrying amount at 1 January 2010	32.8	111.0	143.8
New provisions set up during the period and increases in existing provisions	55.8	64.2	120.0
Amounts utilised during the year	0.0	(19.7)	(19.7)
Surplus provisions released during the period	(34.5)	(29.4)	(63.9)
Change due to the passage of time and/or a change in the discount rate	0.0	0.0	0.0
Translation adjustments	3.8	4.1	7.9
Changes in scope of consolidation	0.0	0.0	0.0
Reclassifications	0.1	0.0	0.1
Carrying amount at 31 December 2010	58.0	130.2	188.2

14.2 Provisions – 2009

	Provisions for claims	Other
In € millions	and litigation	provisions	Total
Carrying amount at 1 January 2009	237.1	92.8	329.9
New provisions set up during the period and increases in existing provisions*	30.0	49.1	79.1
Amounts utilised during the year	(220.9)	(11.6)	(232.5)
Surplus provisions released during the period	(18.7)	(25.2)	(43.9)
Change due to the passage of time and/or a change in the discount rate	0.0	0.0	0.0
Translation adjustments	5.1	6.3	11.4
Changes in scope of consolidation	0.0	0.0	0.0
Reclassifications	0.2	(0.4)	(0.2)
Carrying amount at 31 December 2009	32.8	111.0	143.8

* The €214.8 million provision set aside in 2008 to cover the CNP UniCredit Vita plan to assist customers who invested in index-linked contracts based on Lehman Brothers bonds was utilised in full in 2009.

14.3 Provisions – 2008

	Provisions for claims	Other
In € millions	and litigation	provisions	Total
Carrying amount at 1 January 2008	18.9	93.6	112.5
New provisions set up during the period and increases in existing provisions*	235.2	71.4	306.6
Amounts utilised during the year	(11.5)	(19.4)	(30.9)
Surplus provisions released during the period	(1.8)	(48.5)	(50.3)
Change due to the passage of time and/or a change in the discount rate	0.0	0.0	0.0
Translation adjustments	(3.7)	(5.7)	(9.4)
Changes in scope of consolidation	0.0	0.0	0.0
Reclassifications	0.0	1.4	1.4
Carrying amount at 31 December 2008	237.1	92.8	329.9

* A provision amounting to €214.8 million (€90 million, net of deferred participation and deferred taxation) was set aside to cover the CNP UniCredit Vita plan to assist clients who invested in index-linked contracts based on Lehman Brothers bonds.

Note 15. Liabilities arising from insurance and reinsurance transactions

15.1 Liabilities arising from insurance and reinsurance transactions

This note discloses details of insurance and reinsurance payables at 31 December 2010, 2009 and 2008:

In € millions	31/12/2010	31/12/2009	31/12/2008
Cash deposits received from reinsurers	210.1	244.9	228.3
Liabilities arising from insurance transactions	1,278.2	1,679.6	1,466.7
Liabilities arising from reinsurance transactions	443.8	377.7	406.9
Deferred acquisition costs	11.4	16.2	0.0
Total	1,943.6	2,318.5	2,101.9

Analysis by maturity

In € millions	Due within 1 year	Due in 1 to 5 years	Due beyond 5 years
Cash deposits received from reinsurers	0.7	209.4	0.0
Liabilities arising from insurance transactions	1,278.2	0.0	0.0
Liabilities arising from reinsurance transactions	443.8	0.0	0.0
Deferred acquisition costs	11.4	0.0	0.0
Total	1,734.1	209.4	0.0

31/12/2009

31/12/2010

In € millions	Due within 1 year	Due in 1 to 5 years	Due beyond 5 years
Cash deposits received from reinsurers	3.1	241.8	0.0
Liabilities arising from insurance transactions	1,679.6	0.0	0.0
Liabilities arising from reinsurance transactions	377.7	0.0	0.0
Deferred acquisition costs	16.2	0.0	0.0
Total	2,076.7	241.8	0.0

31/12/2008

In € millions	Due within 1 year	Due in 1 to 5 years	Due beyond 5 years
Cash deposits received from reinsurers	10.5	217.8	0.0
Liabilities arising from insurance transactions	1,464.3	2.4	0.0
Liabilities arising from reinsurance transactions	406.9	0.0	0.0
Total	1,881.7	220.2	0.0

15.2 Other liabilities

In € millions	31/12/2010	31/12/2009	31/12/2008
Employee advances	259.4	322.6	292.7
Accrued payroll and other taxes	711.1	461.9	408.9
Sundry payables	2,489.8	2,510.0	1,802.1
Total	3,460.2	3,294.6	2,503.7

15.3 Employee benefits – IAS 19

15.3.1 Main assumptions

Discount rate

The discount rate is based on the French government bond (OAT) rate.

		Discount rate
Plan	Duration (years)	France	Italy
Retirement benefits	14	3.08%	4.70%
Jubilees	11	2.96%	0%
EPI plan	10	2.91%	0%
Early retirement plan	<10	French actuaries' institute yield curve 31.12.2009	0
Other plans (mainly outside France)	10
Expected future salary increases		3%	3%
Inflation		Incl. in salary
		increases	2%
Expected return on plan assets		4%	3%

Mortality table

The Insee 98 mortality table has been used.

15.3.2 Recognised benefit obligations

	31/12/2010	31/12/2009	31/12/2008
	Post employment plans	Post employment plans	Post employment plans
In € millions
Projected benefit obligation	113.8	95.5	89.6
Fair value of plan assets	(0.6)	(2.9)	(13.6)
Projected benefit obligation net of plan assets	113.3	92.6	76.1
Unrecognised past service cost	(9.3)	(12.1)	(14.9)
Liability recognised in the balance sheet – defined benefit plans	104.0	80.5	61.1
Liability recognised in the balance sheet – defined contribution plans	32.2	32.2	29.7
Total liability recognised in the balance sheet for pension and other post-employment benefit plans	136.2	112.7	90.8
Other long-term benefit obligations*	18.8	18.6	16.0
o/w length-of-service and jubilee awards	18.8	16.6	13.1
Total liability recognised in the balance sheet for long-term benefit obligations	155.0	131.3	106.8

- Recognised long-term benefit obligations

Employee benefits include early retirement plans and all defined contribution plans booked by French subsidiaries and other benefit plan obligations carried on the books of foreign subsidiaries.

15.3.3 Analysis of cost of benefit obligations

	31/12/2010 Post employment	31/12/2009 Post employment	31/12/2008 Post employment
In € millions	plans	plans	plans
Current service cost (net of employee contributions)	8.7	13.5	4.7
Interest cost	3.7	3.6	3.3
Expected return on plan assets for the period	(0.1)	0.0	(0.5)
Curtailments and settlements	0.0	0.0	0.0
Amortisation of past service cost	2.8	2.8	2.8
Post-employment benefit expense – defined benefit plans	15.0	19.9	10.3
Post-employment benefit expense – defined contribution plans	0.0	2.5	2.8
Total post-employment benefit expense	15.0	22.5	13.2

15.3.4 Reconciliation of the amounts recorded in the balance sheet for defined benefit plans

	31/12/2010	31/12/2009	31/12/2008
In € millions	Post employment plans	Post employment plans	Post employment plans

At 1 January (1)	80.5	61.1	50.4
Effect of changes in exchange rates (2)	0.0	0.0	0.0
Post-employment benefit expense (3)	15.0	23.5	10.3
Employer's contributions (4)	(0.2)	(3.2)	(1.7)
Benefits paid (5)	(3.0)	(5.3)	(6.0)
Actuarial gains and losses recognised in the SoRIE (6)	10.8	3.8	9.2
Actuarial gains and losses recognised through profit	0.0	0.0	0.1
Changes in scope of consolidation (7)	0.8	0.8	(1.2)
Non-current liabilities associated with assets held for sale	0.0	(0.2)	0.0
and discontinued operations At 31 December (8)	104.0	80.5	61.1

(1): Net plan assets/(liabilities) carried in the balance sheet at 1 January for defined benefit plans.

(2): Translation differences on the recognition of Brazilian pension obligations.

(3): Pension (charges)/revenue arising from defined benefit plans (see point (7) in the previous table).

(4): Management fees paid on plan assets.

(5): Fees paid by the Group (or rebilled by CDC).

(6): Actuarial gains and losses recognised immediately in equity in line with Group accounting policies.

(7): Increase/decrease in interest held in ICDC or other businesses.

(8): (1) + (2) + (3) + (4) + (5) + (6) + (7)

15.3.5 Change in actuarial gains

	31/12/2010	31/12/2009	31/12/2008
In € millions	Post employment plans	Post employment plans	Post employment plans
Actuarial gains and losses recognised in equity at the beginning of the period	16.2	11.8	2.6
Actuarial gains and losses on employee benefits recognised in the balance sheet	10.8	4.3	9.2
Actuarial gains and losses recognised in equity at the end of the period	27.0	16.2	11.8

Note 16. Revenue

Revenue comprises:

• earned premiums;
• premium loading on financial instruments without DPF, reported under "Revenue from other activities".

16.1 Earned premiums and revenue from other activities

Business segment and contract type	31/12/2010	31/12/2009	31/12/2008
Insurance contracts	23,079.9	19,649.3	16,546.8
Life	20,375.9	17,055.6	14,020.9
Pure premiums	19,076.5	15,936.2	13,018.2
Loading	1,299.4	1,119.5	1,002.7
Non-life	2,704.0	2,593.7	2,525.9
Pure premiums	1,938.4	1,876.7	1,852.4
Loading	765.6	717.0	673.5
Financial instruments with DPF	9,160.7	12,873.8	11,727.7
Pure premiums	9,019.9	12,712.0	11,565.3
Loading	140.8	161.8	162.3
Earned premiums	32,240.6	32,523.1	28,274.4

Revenue from other activities	31/12/2010	31/12/2009	31/12/2008
Financial instruments without DPF	75.1	89.8	84.4
Loading	75.1	89.8	84.4
On premiums	74.5	62.6	47.7
On net assets	0.7	27.2	36.7
Services (IAS 18)	116.1	76.8	69.3
Other activities	7.9	2.0	4.7
Total	199.0	168.6	158.4

16.2 Reconciliation to reported revenue

In € millions	31/12/2010	31/12/2009	31/12/2008
Earned premiums	32,240.6	32,523.1	28,274.4
Premium loading on financial instruments without DPF (IAS 39)	74.5	62.6	47.7
Total	32,315.1	32,585.6	28,322.2

16.3 Revenue by partnership centre

In € millions	31/12/2010	31/12/2009	31/12/2008
La Banque Postale	10,613.1	10,984.0	11,718.2
Caisse d'Epargne	10,548.3	10,346.6	8,131.5
CNP Trésor	733.4	673.4	720.1
Financial institutions	1,521.8	1,473.5	1,457.5
Companies and local authorities	1,730.5	1,881.1	2,036.2
Mutual Insurers	844.5	745.4	915.5
Foreign subsidiaries	6,185.9	6,296.9	3,256.7
Other	137.6	184.8	86.5
Total revenue	32,315.1	32,585.6	28,322.2

16.4 Revenue by business segment

In € millions	31/12/2010	31/12/2009	31/12/2008
Savings	23,587.3	24,711.2	20,618.9
Pensions	3,160.5	2,875.8	2,856.5
Personal risk	1,727.7	1,486.3	1,587.1
Loan Insurance	3,024.5	2,643.7	2,563.7
Health insurance	480.3	467.0	349.3
Property & Casualty	334.8	401.6	346.5
Sub-total personal risk and other	5,567.3	4,998.6	4,846.5
Other business segments	0.0	0.0	0.2
Total revenue	32,315.1	32,585.6	28,322.2

In € millions	31/12/2010	31/12/2009	31/12/2008
CNP Assurances	23,660.2	23,999.6	22,758.1
CNP IAM	2,189.1	2,051.9	2,075.5
Préviposte	240.9	216.6	246.8
ITV	34.9	16.9	7.7
CNP International	0.0	0.0	0.1
La Banque Postale Prévoyance	177.7	161.6	147.8
Global	0.0	138.3	143.1
Global Vida	0.0	54.8	38.7
CNP Seguros de Vida	17.1	7.9	6.3
Caixa Seguros	2,445.8	1,878.6	1,521.5
CNP UniCredit Vita	2,472.9	3,502.0	1,179.9
CNP Vida	242.0	264.0	196.7
Marfin Insurance Holdings Ltd	202.9	214.4	0.0
CNP Europe	23.4	0.9	0.0
Barclays Vida y Pensiones	608.2	78.1	0.0
Total revenue	32,315.1	32,585.6	28,322.2

16.5 Revenue by company

16.6 Direct and inward reinsurance premiums

In € millions	31/12/2010	31/12/2009	31/12/2008
Insurance premiums	31,446.9	31,761.4	27,454.2
Inward reinsurance premiums	868.2	824.2	868.0
Total revenue	32,315.1	32,585.6	28,322.2

Note 17. Claims and benefit expense

This note shows assets, liabilities, income and expenses generated by insurance contracts.

In € millions - IFRS 4 and IAS 39 insurance contracts and financial instruments with DPF	31/12/2010	31/12/2009	31/12/2008
Incurred claims	7,300.7	6,988.7	6,630.9
Endowments due	594.3	397.5	368.2
Benefits due	2,137.5	2,010.1	1,736.4
Surrenders	10,921.3	9,545.7	10,312.5
Credited interest and policyholder dividends included in paid
benefits	(24.1)	(14.3)	(28.9)
Benefit and claim handling expenses	108.7	93.0	85.4
Claims and benefits	21,038.4	19,020.6	19,104.5
Change in technical reserves – insurance contracts	10,620.0	11,501.3	2,207.2
Change in technical reserves – financial instruments with DPF	(2,618.7)	2,177.4	(2,170.1)
Change in other technical reserves	405.9	29.1	(256.4)
Change in technical reserves	8,407.2	13,707.8	(219.3)
Credited interest	1,935.0	1,962.4	1,930.5
Policyholder dividends	7,827.0	7,604.4	270.7
Credited interest and policyholder dividends	9,762.0	9,566.8	2,201.2
Claims and benefits expenses	39,207.6	42,295.2	21,086.4

Note 18. Administrative expenses and business acquisition costs

18.1 Expenses analysed by function

In € millions	31/12/2010	31/12/2009	31/12/2008
Commissions	(2,938.4)	(2,837.0)	(2,769.4)
Expenses analysed by function	(223.7)	(211.3)	(207.7)
Business acquisition costs	(3,162.1)	(3,048.3)	(2,977.1)
Contract administration expenses	(373.2)	(351.0)	(370.4)
Other underwriting income and expenses	76.6	69.9	128.9
Other income and expenses	(81.1)	185.6	(240.2)
Employee profit-sharing	(13.8)	(19.4)	(19.2)
Other recurring operating income and expense, net	(18.3)	236.1	(130.5)
TOTAL	(3,553.6)	(3,163.2)	(3,478.0)

18.2 Expenses analysed by nature

In € millions	31/12/2010	31/12/2009	31/12/2008
Depreciation and amortisation expense and impairment losses	32.5	35.2	34.3
Employee benefits expense	380.5	372.7	331.5
Taxes other than on income	117.6	113.5	86.4
Other	393.8	325.6	342.8
TOTAL	924.4	847.0	795.0

18.3 Administrative expenses, net

In € millions	31/12/2010	31/12/2009	31/12/2008
Contract administration costs, net* - Excluding foreign subsidiaries - Including foreign subsidiaries and other businesses	577.5 874.0	549.6 796.7	556.5 752.2
RATIO * Contract administration costs
Technical reserves** - Excluding foreign subsidiaries and other businesses - Including foreign subsidiaries and other businesses	0.22% 0.31%	0.23% 0.30%	0.25% 0.31%
* Excluding CNP Trésor set-up expenses. ** Insurance and financial liabilities, excluding deferred	36.4	35.2	35.7

participation.

18.4 Analysis of commission expense

In € millions	31/12/2010	31/12/2009	31/12/2008
Caisse d'Epargne	764.2	751.1	755.6
La Banque Postale	527.6	478.8	494.5
Other	1,646.6	1,607.1	1,519.3
TOTAL	2,938.4	2,837.0	2,769.4

* Pending Auditor Approval 102/129

Note 19. Reinsurance result

In € millions	31/12/2010	31/12/2009	31/12/2008
Ceded premiums	(857.4)	(955.6)	(749.9)
Change in ceded technical reserves	978.7	967.7	597.8
Reinsurance commissions	253.8	243.5	205.0
Investment income	(415.1)	(283.4)	(119.3)
Total	(39.9)	(27.7)	(66.5)

Note 20. Investment income

20.1 Investment income and expense

This note discloses the main income, expenses, profits and losses generated by financial assets and liabilities that have been recognised in profit or loss or directly in equity for 2010, 2009 and 2008.

In € millions		31/12/2010	31/12/2009	31/12/2008
	Interest on debt securities	133.4	(237.7)	503.5
	Interest on loans	7,947.4	7,099.4	6,643.5
Available-for-sale	Income from other financial assets	955.5	1,284.1	1,136.0
financial assets	Capital gains and losses on disposals	488.2	832.7	1,068.6
	Impairments	(211.9)	(174.2)	(2,983.8)
	Net income from available-for-sale financial assets	9,312.5	8,804.4	6,367.9
	Interest on debt securities	(0.8)	(1.5)	1.9
Held-to-maturity	Interest on loans	113.5	69.0	69.3
investments	Other income	1.5	5.8	(0.9)
	Impairments	4.0	(20.4)	(30.6)
	Net income from held-to-maturity investments	118.2	52.9	39.7
	Interest on debt securities	0.0	0.0	0.0
Loans and	Interest on loans	13.7	0.0	0.0
receivables	Other income	0.0	0.0	0.0
	Impairments	0.0	0.0	0.0
	Net income from loans and receivables	13.7	0.0	0.0
Financial assets	Profit (loss) on securities held for trading Profit (loss) on derivative instruments held for trading and	2,576.3	6,014.3	(9,552.7)
at fair value	hedging	(215.1)	(459.4)	235.2
through profit	Capital gains and losses on disposals	109.8	161.5	403.6
	Net income (expense) from financial assets at fair value
	through profit	2,471.0	5,716.4	(8,913.9)
Investment	Rent and other revenue Fair value adjustments	239.5 24.6	187.6 (42.6)	170.6 (8.6)
property	Capital gains and losses on disposals	42.5	303.5	18.6
	Net income from investment property	306.6	448.5	180.6
Other investment expenses Dilution gain		(398.7) 0.0	(346.2) 0.0	(375.2) 0.0
	TOTAL INVESTMENT INCOME (EXPENSE)	11,823.3	14,676.1	(2,700.8)
		(95.0)	(85.4)	(108.5)
Interest on subordinated debt at amortised cost Interest on subordinated debt at fair value		0.0	0.0	0.0
Total finance costs		(95.0)	(85.4)	(108.5)
	TOTAL INVESTMENT INCOME (EXPENSE) NET OF FINANCE COSTS	11,728.2	14,590.6	(2,809.3)

Reconciliation of investment income and expenses to the amounts reported in the income statement

	31/12/2010	31/12/2009	31/12/2008
Investment income (expense) before finance costs	12,348.1	15,191.8	(2,141.8)
Investment and other financial expenses, excluding finance costs	(524.9)	(515.7)	(559.0)
Finance costs	(95.0)	(85.4)	(108.5)
Total	11,728.2	14,590.6	(2,809.3)

20.2 Fair value adjustments to assets

The following tables show fair value adjustments to assets in 2010, 2009 and 2008.

20.2.1 Fair value adjustments to assets – 2010

In € millions		Investments held at 31/12/2010	Investments held at 31/12/2009	Movements in 2010
	Fixed-rate bonds	17,931.5	16,810.5	1,121.0
	Variable-rate bonds	9,592.8	10,286.9	(694.1)
	TCNs (money market securities)	191.3	303.0	(111.7)
	Equities	6,574.1	6,351.8	222.3
Assets at fair value	Mutual fund units	28,276.7	27,420.5	856.2
through profit	Shares in non-trading property companies	1,465.8	1,458.3	7.5
	Other (including lent securities and repos)	0.9	0.5	0.4
	Total	64,033.1	62,631.5	1,401.6
Derivative instruments	Derivative instruments (positive fair value)	3,012.8	2,661.0	351.8
	Derivative instruments (negative fair value)	(2,356.2)	(1,970.7)	(385.5)
	Total	656.5	690.3	(33.8)
	Fixed-rate bonds	177,743.9	162,705.8	15,038.1
	Variable-rate bonds	7,830.3	7,729.0	101.3
	TCNs (money market securities)	7,963.2	6,388.6	1,574.6
	Equities	17,269.4	16,220.2	1,049.2
Available-for-sale	Mutual fund units	10,172.0	14,314.9	(4,142.9)
financial assets	Shares in non-trading property companies	3,140.5	3,783.6	(643.1)
	Non-voting loan stock	66.9	63.9	3.0
	Other (including lent securities and repos)	6,086.1	5,633.0	453.1
	Total	230,272.2	216,839.2	13,433.2
Held-to-maturity	Fixed-rate bonds	1,237.3	1,222.9	14.4
investments	Total	1,237.3	1,222.9	14.4
Loans and receivables	Loans and receivables	3,959.4	2,451.6	1,507.8
	Total	3,959.4	2,451.6	1,507.8
	Investment property at amortised cost	1,769.3	1,769.2	0.1
Investment property	Investment property at fair value	485.3	466.1	19.2
	Total	2,254.6	2,235.4	19.2
TOTAL		302,413.2	286,070.9	16,342.3

In € millions		Investments held at 31/12/2009	Investments held at 31/12/2008	Movements in 2009
	Fixed-rate bonds	16,810.5	15,503.5	1,307.0
	Variable-rate bonds	10,286.9	10,393.0	(106.1)
	TCNs (money market securities)	303.0	407.5	(104.5)
	Equities	6,351.8	5,740.3	611.5
Assets at fair value through profit	Mutual fund units	27,420.5	24,104.7	3,315.8
	Shares in non-trading property companies	1,458.3	1,972.6	(514.3)
	Other (including lent securities and repos)	0.5	0.8	(0.3)
	Total	62,631.5	58,122.4	4,509.1
Derivative instruments	Derivative instruments (positive fair value)	2,661.0	2,234.4	426.6
	Derivative instruments (negative fair value)	(1,970.7)	(1,268.3)	(702.4)
	Total	690.3	966.1	(275.8)
	Fixed-rate bonds	162,705.8	142,422.6	20,283.2
	Variable-rate bonds	7,729.0	8,816.7	(1,087.7)
	TCNs (money market securities)	6,388.6	3,848.8	2,539.8
	Equities	16,220.2	12,648.2	3,572.0
Available-for-sale	Mutual fund units	14,314.9	11,030.1	3,284.8
financial assets	Shares in non-trading property companies	3,783.6	3,464.5	319.0
	Non-voting loan stock	63.9	62.9	1.0
	Other (including lent securities and repos)	5,633.0	5,612.6	20.4
	Total	216,839.2	187,906.4	28,932.4
Held-to-maturity	Fixed-rate bonds	1,222.9	903.8	319.1
investments	Total	1,222.9	903.8	319.1
Loans and receivables	Loans and receivables	2,451.6	2,232.9	218.7
	Total	2,451.6	2,232.9	218.7
	Investment property at amortised cost	1,769.2	2,346.7	(577.5)
Investment property	Investment property at fair value	466.1	520.6	(54.5)
	Total	2,235.4	2,867.3	(631.9)
TOTAL		286,070.9	252,998.8	33,072.1

20.2.2 Fair value adjustments to assets – 2009

In € millions		Investments held at 31/12/2008	Investments held at 31/12/2007	Movements in 2008
	Fixed-rate bonds	15,503.5	16,048.2	(544.7)
	Variable-rate bonds	10,393.0	13,003.2	(2,610.2)
	TCNs (money market securities)	407.5	1,359.6	(952.1)
	Equities	5,740.3	12,107.7	(6,367.4)
Assets at fair value	Mutual fund units	24,104.7	30,322.0	(6,217.3)
through profit	Shares in non-trading property companies	1,972.6	2,140.0	(167.4)
	Other (including lent securities and repos)	0.8	0.3	0.5
	Total	58,122.3	74,981.0	(16,858.6)
Derivative instruments	Derivative instruments (positive fair value)	2,234.4	1,972.7	261.7
	Derivative instruments (negative fair value)	(1,268.3)	(1,456.1)	187.8
	Total	966.1	516.6	449.5
	Fixed-rate bonds	142,422.6	131,553.1	10,869.5
	Variable-rate bonds	8,816.7	8,373.5	443.2
	TCNs (money market securities)	3,848.8	4,728.0	(879.2)
	Equities	12,648.2	21,449.6	(8,801.4)
Available-for-sale	Mutual fund units	11,030.1	6,647.7	4,382.4
financial assets	Shares in non-trading property companies	3,464.5	2,918.7	545.8
	Non-voting loan stock	62.9	93.8	(30.9)
	Other (including lent securities and repos)	5,612.6	5,146.4	466.2
	Total	187,906.4	180,910.8	6,995.6
Held-to-maturity	Fixed-rate bonds	903.8	1,134.7	(230.9)
investments	Total	903.8	1,134.7	(230.9)
Loans and receivables	Loans and receivables	2,232.9	2,088.4	144.4
	Total	2,232.9	2,088.4	144.4
	Investment property at amortised cost	2,346.7	2,387.5	(40.7)
Investment property	Investment property at fair value	520.6	445.7	74.8
	Total	2,867.3	2,833.2	34.1
TOTAL		252,998.8	262,464.7	(9,465.9)

20.2.3 Fair value adjustments to assets – 2008

20.2.4 Reconciliation of fair value adjustments to the amounts reported in the "Investments" note

	31/12/2010	31/12/2009	31/12/2008
Fair value of investments	302,413.2	286,070.9	252,998.8
Unrealised gains and losses, net	(1,001.9)	(964.5)	(1,259.4)
Carrying amount of investments	301,411.3	285,106.4	251,739.4

20.3 Impairment

This note discloses the nature and amount of impairment losses on financial assets recognised in profit or loss, by significant category of financial assets.

In € millions	31/12/2010	31/12/2009	31/12/2008
Available-for-sale financial assets	(382.7)	(579.4)	(3,326.2)
Fixed-rate bonds	(21.2)	(12.7)	(216.9)
Variable-rate bonds	0.0	0.0	0.0
TCNs (money market securities)	0.0	0.0	0.0
Equities	(168.5)	(293.4)	(2,093.3)
Equity funds	(33.0)	(42.5)	(286.3)
Non-voting loan stock	(0.4)	(0.2)	0.0
Other (including mutual fund units)	(159.6)	(230.6)	(729.7)
Held-to-maturity investments	0.0	(20.4)	(30.6)
Loans and receivables	0.0	0.0	0.0
Total impairment expense	(382.7)	(599.8)	(3,356.8)
Available-for-sale financial assets	170.8	405.3	342.5
Fixed-rate bonds	43.1	13.7	0.0
Variable-rate bonds	0.0	0.0	0.0
TCNs (money market securities)	0.0	0.0	0.0
Equities	55.6	369.0	143.0
Equity funds	52.1	2.8	2.4
Non-voting loan stock	0.0	0.0	0.0
Other (including mutual fund units)	19.9	19.8	197.1
Held-to-maturity investments	4.0	0.0	0.0
Loans and receivables	0.0	0.0	0.0
Total impairment reversals	174.8	405.3	342.4
Net change in impairment provisions	(207.9)	(194.5)	(3,014.4)

Note 21. Income tax expense

The purpose of the table below is to disclose the main components of income tax expense (credit).

The income tax expense for the period was materially impacted by the French tax reform concerning the capitalisation reserve (see Note 1.4)

In € millions	31/12/2010	31/12/2009	31/12/2008
Current tax	578.6	427.3	443.7
Deferred tax	(555.8)	16.9	(255.8)
Income tax expense	22.8	444.2	187.9
In € millions	31/12/2010	31/12/2009	31/12/2008
Profit for the period	1,288.1	1,122.3	814.4
Tax rate	1.74%	28.36%	18.75%
Income tax expense	22.8	444.2	187.9

	31/12/2010		31/12/2009		31/12/2008
Tax proof - in € millions	Rate	Amount	Rate	Amount	Rate	Amount
Profit before tax		1,310.9		1,566.5		1,002.3
Income tax at the standard French tax rate	34.43%	451.3	34.43%	539.4	34.43%	345.1
Permanent differences	-45.90%	(601.8)	-14.50%	(227.2)	-7.27%	(72.9)
Capital gains and losses taxed at reduced rate	6.31%	82.7	11.18%	175.1	-13.09%	(131.2)
Tax credits and tax loss carryforwards used	-0.05%	(0.7)	-1.62%	(25.4)	1.48%	14.8
Effects of differences in foreign tax
rates	0.00%	0.0	-1.13%	(17.7)	-3.84%	(38.5)
Other	6.96%	91.2	0.00%	0.0	7.03%	70.5
Total	1.74%	22.8	28.36%	444.2	18.74%	187.8

Deferred taxes on:	31/12/2010	31/12/2009	31/12/2008
Fair value adjustments to financial assets held for trading	299.4	548.8	(1,900.7)
Deferred participation asset/reserve	(275.5)	(435.5)	1531.4
Fair value adjustments to other financial assets	90.1	29.2	10.5
Shadow accounting adjustments to items recognised directly in equity	0.0	0.0	0.0
Revaluations of owner-occupied property reclassified as investment property	0.0	0.0	0.0
Timing differences	0.0	0.0	0.0
Other	(669.8)	(125.6)	103.0
Total	(555.8)	16.9	(255.8)

Note 22. Interest rate risk on financial assets

This note provides additional information about the Group's exposure to interest rate risk on financial assets and liabilities, by category.

22.1 Caps and floors

The following tables show the nominal amount of caps and floors by strike price and remaining term at 31 December 2010, 2009 and 2008.

22.1.1 Caps and Floors at 31 December 2010

		Residual life
In € millions	1 year	2 years	3 years	4 years	5 years	6 years	7 years	8 years	9 years	≥ 10 years	Total
>= 4% <5%	550	2,405	5,160	2,659	3,420	3,588	3,092	4,293	3,740	2,757	31,664
>= 5% <6%	1,895	1,415	1,310	1,450	4,542	3,590	3,509	2,310	880	600	21,501
>= 6% <7%	810	1,115	400	0	0	0	0	0	0	0	2,325
>= 7% <8%	0	0	0	0	0	0	0	0	0	0	0
>= 8% <9%	0	0	0	0	0	0	0	0	0	5	5
>= 9% <10%	0	0	0	0	0	0	0	0	0	0	0
Total	3,255	4,935	6,870	4,109	7,962	7,178	6,601	6,603	4,620	3,363	55,495

22.1.2 Caps and Floors at 31 December 2009

	Residual life
In € millions	1 year	2 years	3 years	4 years	5 years	6 years	7 years	8 years	9 years	≥ 10 years	Total
>= 4% <5%	330	550	2,405	5,160	2,649	1,408	1,310	295	2,330	5,138	21,575
>= 5% <6%	1,130	1,895	1,415	260	280	975	1,520	2,211	1,650	1,180	12,516
>= 6% <7%	100	810	1,115	400	0	0	0	0	0	0	2,425
>= 7% <8%	656	0	0	0	(70)	(300)	(255)	(235)	(335)	(900)	(1,439)
>= 8% <9%	0	0	0	0	0	0	0	0	0	5	5
>= 9% <10%	0	0	0	0	0	0	0	0	0	0	0
Total	2,216	3,255	4,935	5,820	2,859	2,083	2,575	2,271	3,645	5,423	35,083

22.1.3 Caps and Floors at 31 December 2008

						Residual life
										≥ 10
In € millions	1 year	2 years	3 years	4 years	5 years	6 years	7 years	8 years	9 years	years	Total
>= 4% <5%	80	330	550	2,405	5,065	2,485	1,290	1,110	190	3,719	17,224
>= 5% <6%	1,317	1,130	1,895	1,400	245	100	575	1,250	1,926	2,235	12,073
>= 6% <7%	680	100	810	1,115	400	0	2	5	0	0	3,112
>= 7% <8%	76	656	0	0	0	0	0	0	0	0	732
>= 8% <9%	0	0	0	0	0	0	0	0	0	0	0
>= 9% <10%	0	0	0	0	0	0	0	0	0	0	0
Total	2,153	2,216	3,255	4,920	5,710	2,585	1,867	2,365	2,116	5,954	33,142

22.2 Effective Interest rates

This note shows effective interest rates on fixed-rate bonds and zero coupon bonds at the balance sheet date and the purchase date.

Effective interest rates are presented for the Group's main insurance subsidiaries:

• France
• Italy
• Brazil
• Spain

22.2.1 Effective interest rates at purchase

31/12/2010

	France	Italy	Brazil	Spain
Fixed rate debt securities	Euro	Euro	Real	Euro
Fixed rate bonds	4.32%	3.71%	11.91%	4.76%

31/12/2009

	France	Italy	Brazil	Spain
Fixed rate debt securities	Euro	Euro	Real	Euro
Fixed rate bonds	4.52%	3.89%	10.74%	4.72%

31/12/2008

	France	Italy	Brazil	Portugal	Spain
Fixed rate debt securities	Euro	Euro	Real	Euro	Euro
Fixed rate bonds	4.63%	4.38%	12.64%	4.59%	5.31%

22.2.2 Effective interest rates at balance sheet date

31/12/2010

	France	Italy	Brazil	Spain
Fixed rate debt securities	Euro	Euro	Real	Euro
Fixed rate bonds	3.60%	3.42%	11.92%	8.81%

31/12/2009

	France	Italy	Brazil	Spain
Fixed rate debt securities	Euro	Euro	Real	Euro
Fixed rate bonds	3.23%	3.50%	10.94%	2.89%

31/12/2008

	France	Italy	Brazil	Portugal	Spain
Fixed rate debt securities	Euro	Euro	Real	Euro	Euro
Fixed rate bonds	4.03%	3.83%	12.69%	3.68%	4.92%

22.3 Carrying amounts by maturity

In € millions				31/12/2010
Type of instrument	Due within 1 year	Due in 1 to 2 years	Due in 2 to 3 years	Due in 3 to 4 years	Due in 4 to 5 years	Beyond 5 years	Total
Fixed rate bonds	20,100.1	11,881.3	14,388.4	13,527.7	13,419.0	98,285.3	171,601.8
Zero coupon bonds	2,932.3	667.6	103.3	254.1	173.0	6,902.9	11,033.2
Adjustable rate bonds	385.7	268.9	197.4	65.9	24.4	1,553.0	2,495.3
Variable rate bonds	2,379.9	713.0	421.8	362.7	630.7	642.3	5,150.4
Index-linked fixed rate bonds	393.1	1,022.9	957.8	25.4	265.2	7,188.6	9,853.0
Other bonds	2,469.9	1,877.6	2,938.4	3,471.3	1,781.7	11,469.6	24,008.5
Total	28,661.0	16,431.3	19,007.1	17,707.1	16,294.2	126,041.7	224,142.2

22.3.1 Carrying amounts by maturity at 31 December 2010

22.3.2 Carrying amounts by maturity at 31 December 2009

In € millions				31/12/2009
Type of instrument	Due within 1 year	Due in 1 to 2 years	Due in 2 to 3 years	Due in 3 to 4 years	Due in 4 to 5 years	Beyond 5 years	Total
Fixed rate bonds	13,676.3	16,465.7	12,087.8	14,147.6	12,982.9	85,679.9	155,040.2
Zero coupon bonds	2,366.5	222.9	633.6	132.5	238.9	4,893.3	8,487.7
Adjustable rate bonds	705.3	349.1	163.7	38.8	53.0	1,315.8	2,625.7
Variable rate bonds	3,028.2	695.0	439.1	269.9	320.7	701.3	5,454.2
Index-linked fixed rate bonds	37.4	399.3	1,020.2	953.8	25.9	7,284.9	9,721.5
Other bonds	2,370.6	4,085.9	2,134.5	2,987.2	2,602.5	11,622.9	25,803.6
Total	22,184.3	22,217.9	16,478.9	18,529.8	16,223.9	111,498.1	207,132.9

22.3.3 Carrying amounts by maturity at 31 December 2008

In € millions 31/12/2008
Type of instrument	Due within 1 year	Due in 1 to 2 years	Due in 2 to 3 years	Due in 3 to 4 years	Due in 4 to 5 years	Beyond 5 years	Total
Fixed rate bonds	12,830.1	10,725.3	13,709.4	10,309.6	12,701.8	72,964.2	133,240.4
Zero coupon bonds	2,553.2	398.8	92.6	360.3	132.3	3,736.1	7,273.3
Adjustable rate bonds	2,181.2	427.9	129.5	126.3	31.8	1,085.9	3,982.6
Variable rate bonds	909.0	305.6	317.4	344.4	133.7	533.9	2,544.0
Index-linked fixed rate bonds	990.3	38.8	395.2	985.8	931.6	6,431.4	9,773.1
Other bonds	4,806.6	2,586.1	2,405.2	2,138.4	3,050.0	12,716.7	27,703.0
Total	24,270.4	14,482.5	17,049.3	14,264.8	16,981.2	97,468.2	184,516.4

22.4 Carrying amounts at maturity – held-to-maturity investments

22.4.1 Carrying amount at 31 December 2010

		31/12/2010
Carrying amount of financial instruments measured at amortised cost	Due within 1 year	Due in 1 to 2 years	Due in 2 to 3 years	Due in 3 to 4 years	Due in 4 to 5 years	Beyond 5 years	Total
Held-to-maturity investments	231.1	152.5	169.2	118.7	135.5	399.6	1,206.6
Loans and receivables	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Total	231.1	152.5	169.2	118.7	135.5	399.6	1,206.6

22.4.2 Carrying amount at 31 December 2009

	31/12/2009
Carrying amount of financial instruments measured at amortised cost	Due within 1 year	Due in 1 to 2 years	Due in 2 to 3 years	Due in 3 to 4 years	Due in 4 to 5 years	Beyond 5 years	Total
Held-to-maturity investments	161.9	220.8	129.2	134.1	95.8	462.6	1,204.4
Loans and receivables	3.0	0.0	0.0	0.0	0.0	0.0	3.0
Total	164.9	220.8	129.2	134.1	95.8	462.6	1,207.4

22.4.3 Carrying amount at 31 December 2008

	31/12/2008
Carrying amount of financial instruments measured at amortised cost	Due within 1 year	Due in 1 to 2 years	Due in 2 to 3 years	Due in 3 to 4 years	Due in 4 to 5 years	Beyond 5 years	Total
Held-to-maturity investments	99.4	137.5	198.2	119.1	81.2	319.6	955.0
Loans and receivables	15.4	0.0	0.0	0.0	0.0	0.0	15.4
Total	114.8	137.5	198.2	119.1	81.2	319.6	970.4

22.5 Average life of securities

The following tables show the average remaining life of securities, weighted by carrying amount, in years.

22.5.1		Average remaining life of securities – 31 December 2010

France	Italy	Brazil	Spain
6.6	4.3	2.2	5.2

22.5.2 Average remaining life of securities – 31 December 2009

France	Italy	Brazil	Spain
6.5	3.8	2.9	5.3

22.5.3 Average remaining life of securities – 31 December 2008

France	Italy	Brazil	Portugal	Spain
6.5	3.6	2.2	5.2	5.3

Note 23. Interest rate risk on financial liabilities

This note shows the breakdown of technical reserves, by guaranteed yield.

31/12/2010
Guaranteed yield Technical reserves (in € millions)
0%1	131,955.8	46.6%
]0%-2%]	14,514.3	5.1%
]2%-3%]	51,050.0	18.0%
]3%-4%]	1,761.8	0.6%
]4%-4,5%]	4,984.9	1.8%
>4,5%2	1,762.4	0.6%
Linked liabilities	36,694.7	13.0%
Other3	40,264.0	14.2%
TOTAL	282,987.9	100.0%

(1) Corresponds to technical reserves for life insurance contracts without a guaranteed yield.

(2) Technical reserves for contracts with a guaranteed yield of more than 4.5% mainly concern Caixa Seguros in Brazil, where bond rates are above 10% (see Note 22.2).

(3) Comprises all other technical reserves, except for mathematical reserves and linked liabilities, i.e. non-life technical reserves, policyholder surplus reserves and claims reserves.

31/12/2009
Guaranteed yield	Technical reserves (in € millions)	%
0%1	121,694.0	46.0%
]0%-2%]	8,856.1	3.3%
]2%-3%]	52,096.1	19.7%
]3%-4%]	2,874.0	1.1%
]4%-4,5%]	4,975.8	1.9%
>4,5%2	1,782.2	0.7%
Linked liabilities	36,591.2	13.8%
Other3	35,837.4	13.5%
TOTAL	264,706.8	100.0%

(1) Corresponds to technical reserves for life insurance contracts without a guaranteed yield.

(2) Technical reserves for contracts with a guaranteed yield of more than 4.5% mainly concern Caixa Seguros in Brazil, where bond rates are above 10% (see Note 22.2).

(3) Comprises all other technical reserves, except for mathematical reserves and linked liabilities, i.e. non-life technical reserves, policyholder surplus reserves and claims reserves.

31/12/2008
Guaranteed yield	Technical reserves (in € millions)	%
0%1	110,717.4	45.8%
]0%-2%]	7,919.9	3.3%
]2%-3%]	49,278.9	20.4%
]3%-4%]	3,891.2	1.6%
]4%-4,5%]	5,568.7	2.3%
>4,5%2	1,224.2	0.5%
Linked liabilities	33,772.7	14.0%
Other3	29,140.0	12.1%
TOTAL	241,513.0	100.0%

(1) Corresponds to technical reserves for life insurance contracts without a guaranteed yield.

(2) Technical reserves for contracts with a guaranteed yield of more than 4.5% mainly concern Caixa Seguros in Brazil, where bond rates are above 10% (see Note 22.2).

(3) Comprises all other technical reserves, except for mathematical reserves and liabilities relating to linked liabilities, i.e. non-life technical reserves, policyholder surplus reserves and claims reserves.

Note 24. Liquidity risk

24.1 Future cash flows from assets

This note discloses future cash flows from assets (redemptions, interest payments, etc.) by period.

24.1.1 Future cash flows from assets at 31 December 2010

Intended holding period	< 1 year	1 to 5 years	5 to 10 years	10 to 15 years
Available-for-sale financial assets	28,349	95,308	88,438	36,469
Assets held for trading	5,334	13,068	55,128	1,445
Held-to-maturity investments	244	789	225	118
Loans and receivables	17	-	-	-

24.1.2 Future cash flows from assets at 31 December 2009

Intended holding period	< 1 year	1 to 5 years	5 to 10 years	10 to 15 years
Available-for-sale financial assets	20,909	76,667	78,664	44,629
Assets held for trading	3,106	13,837	5,671	1,838
Held-to-maturity investments	179	607	472	136
Loans and receivables	14	-	-	38

24.1.3 Future cash flows from assets at 31 December 2008

Intended holding period	< 1 year	1 to 5 years	5 to 10 years	10 to 15 years
Available-for-sale financial assets	21,151	70,335	65,343	43,602
Assets held for trading	5,849	12,190	6,225	2,305
Held-to-maturity investments	124	660	194	104
Loans and receivables	16	1	1	2

24.2 Payment projections by maturity

This note discloses estimated future payments on savings, pension and Property & Casualty contracts, including total and partial surrenders.

The total of these projections is higher than the liabilities reported in the balance sheet because the cash flows are capitalised.

24.2.1 Payment projections by maturity at 31 December 2010

	31/12/2010
In € millions	Within 1 year	In 1 to 5 years	In 5 to 10 years	In 10 to 15 years	Beyond 15 years
Insurance and financial liabilities (incl. linked liabilities)	16,919.6	75,250.6	64,480.8	47,053.3	173,962.9

24.2.2 Payment projections by maturity at 31 December 2009

	31/12/2009
In € millions	Within 1 year	In 1 to 5 years	In 5 to 10 years	In 10 to 15 years	Beyond 15 years
Insurance and financial liabilities (incl. linked liabilities)	16,481.2	70,623.1	61,239.2	45,392.4	158,919.1

24.2.3 Payment projections by maturity at 31 December 2008

		31/12/2008
In € millions	Within 1 year	In 1 to 5 years	In 5 to 10 years	In 10 to 15 years	Beyond 15 years
Insurance and financial liabilities (incl. linked liabilities)	13,437.1	69,584.4	57,366.5	46,096.5	137,638.7

24.3 Contracts with immediate surrender option

In € millions	31/12/2010
Contracts with immediate surrender option	249,334.9
Contracts with no immediate surrender option	34,404.6

Contracts with an immediate surrender option represented a total liability of €249.3 billion at 31 December 2010 (€235.5 billion at 31 December 2009). This amount, corresponding to insurance and financial liabilities recognised in the balance sheet, relates to products with a clause allowing for their surrender or transfer by the policyholder.

Loan insurance products, group personal risk products, certain annuity products and "Madelin Act" pension products do not include a surrender or transfer option.

The maximum surrender risk indicated above does not take into account the behaviour of policyholders, who tend to significantly extend the effective duration of their contracts, as reflected in Note 24.2 – Payment projections by maturity.

Note 25. Reconciliation of unit-linked assets and liabilities

In € millions	31/12/2010	31/12/2009	31/12/2008
Investment properties held to cover linked liabilities	1,008.7	1,122.1	1,276.8
Financial assets held to cover linked liabilities	36,343.6	35,462.6	32,499.6
Investments in associates held to cover linked liabilities (consolidated mutual funds and non-trading property companies)	0.0	0.0	0.0
Other assets held to cover linked liabilities (e.g., non-financial assets held by consolidated non-trading property companies)	0.0	0.0	0.0
Total assets held to cover linked liabilities – carrying amount	37,352.3	36,584.7	33,776.4
Linked liabilities – financial instruments without DPF	8,463.3	9,455.7	10,678.0
Linked liabilities – insurance contracts and financial instruments with DPF (other than guaranteed capital reserves)	28,946.7	27,135.6	23,094.7
Total linked liabilities	37,410.0	36,591.3	33,772.7
Guaranteed capital reserves	18.4	28.2	32.4
Total linked liabilities	37,428.5	36,619.5	33,805.1

The asset-liability mismatch on unit-linked contracts mainly relates to provisions for outstanding claims included in linked liabilities but not matched by linked assets.

Note 26. Risk management

26.1 Credit risk

The credit risk management strategy approved by the Executive Committee consists of holding investment grade securities and diversifying bond portfolios to avoid concentrations of credit risks by issuer or geographic area.

The CNP Assurances Credit Risks Committee meets periodically to set exposure limits.

A monthly reporting system has been set up to monitor credit risks by issuer and by type of security, such as equity instruments, subordinated debt and secured debt. A qualitative analysis of credit risks by issuer is performed by in-house credit analysts, mainly based on rating agency reports and investment bank and asset management research.

An internal system has been developed for monitoring issuer and counterparty risk based on a quantitative model used by investment banks.

The primary purpose of this model is to measure the short, medium and long-term risks of loss on the bond portfolios held by Group companies. It covers all the Group's segregated portfolios and can be used by the financial strategists to allocate risk. Simulations can be performed to examine the risk attached to each credit portfolio.

As of 31 December 2010, 89.4% of the Group's bond portfolio was invested in bonds rated A to AAA by the leading rating agencies, including more than 39% rated AAA.

Note 9.7 analyses the Group's bond portfolio by issuer rating.

26.2 Currency risk

The bulk of asset portfolios are invested in the securities of euro zone issuers.

As a result, the portfolios' exposure to currency risks is very limited. Less than 1% of the investments of the French companies in the Group are denominated in currencies other than the euro.

The Group performs currency stress testing for the impact of fluctuations in excess of +10% in the euro/dollar, euro/sterling and euro/Brazilian real exchange rates on profit and equity. The impact on profit and equity of fluctuations in the euro/dollar and euro/sterling exchange rates are due to financial assets held by the Group and denominated in US dollars or sterling, however, exposure to fluctuations in the Brazilian real are due to the full consolidation of the Brazilian subsidiary, Caixa Seguros.

Currency risk sensitivity analysis at 31 December 2010

(€m)	10% increase in €/\$ exchange rates	10% increase in €/£ exchange rates	10% increase in €/BRL exchange rates
Impact on earnings	(21.6)	(4.1)	(19.6)
Impact on equity	(15.2)	(4.8)	(71.1)

Currency risk sensitivity analysis at 31 December 2009

(€m)	10% increase in €/\$ exchange rates	10% increase in €/£ exchange rates	10% increase in €/BRL exchange rates
Impact on earnings	(19.9)	(4.1)	(13.8)
Impact on equity	(16.0)	(8.0)	(60.4)

26.3 Sensitivity of MCEV© to market risks

Sensitivity analyses are performed to efficiently identify and manage earnings and equity volatility. One of the key analyses used by management concerns the sensitivity of Market Consistent Embedded Value (MCEV©) to market and insurance risks.

The Group's Embedded Value reporting is now based on CFO Forum MCEV© Principles (Market Consistent European Embedded Value Principles developed by a group of finance directors from Europe's top insurance companies set up in 2002), after adjusting for a liquidity premium in the rates used to discount financial liabilities to present value.

The Brazilian subsidiary Caixa Seguros has continued to apply the Group's traditional reporting procedure and smaller Group entities use deterministic models. CNP Assurances uses valuation techniques for measuring financial options based on market consistent financial assumptions at 31 December 2010.

The calculation of Embedded Value necessarily relies on numerous assumptions with respect to economic conditions, operating conditions, policyholders' behaviour, taxes and other matters, many of which are beyond the Company's control. Although the assumptions are reasonable, actual future experience may vary from that assumed in the calculation of the Embedded Value results.

MCEV© is the sum of:

• adjusted net asset value (ANAV), which corresponds to the market value of assets attributable to shareholders after deducting intangible assets, subordinated debt and other items included in In-force covered business;

• the value of in-force business, comprising the present value of future profits (PVFP) net of taxes generated on In-force business at the measurement date. This value is calculated using a Market Consistent methodology except for Caixa Seguros where the traditional methodology is used. According to this MCEV© methodology, no risk premium is included in the projected returns or discount rates. Reference rates are based on the swap yield curve. In-force business includes the Embedded Value of the financial options and guarantees present in the portfolio of insurance contracts, excluding the timevalue of said options and guarantees.

The market risk sensitivity of MCEV© is tested to measure the impact of interest rate and equity volatilities. MCEV© principles and the Group's traditional value reporting procedure cover CNP Assurances SA, the Group's main subsidiaries in France, the Brazilian subsidiary and the Italian subsidiary. Sensitivity tests are conducted using the following scenarios:

• the impact of an immediate positive or negative 100-basis point change in the yield curve. This would affect inter alia the fair value of policies with a guaranteed yield and risk discount rates;
• the impact of an immediate 10% fall in equity and property prices.

The results of all sensitivity analyses are net of tax and minority interests and, if applicable, net of policyholder participation.

Market risk sensitivity of MCEV© to interest rate and equity volatilities at 31 December 2010

(€m)	100 bps increase	100 bps decrease	10% decrease in
	in interest rates*	in interest rates	equity prices
Impact on MCEV©	0.0	(115.0)	(493.0)

Market risk sensitivity of MCEV© to interest rate and equity volatilities at 31 December 2009

(€m)	100 bps increase in interest rates*	100 bps decrease in interest rates	10% decrease in equity prices
Impact on MCEV©	54.0	(222.0)	(3.0)
Scope: consolidated Group (excluding in-force business of CNP Seguros de Vida and Barclays Vida y Pensiones).

Sensitivity to insurance risks are presented in Note 26.5.2.8.

26.4 Asset/liability management

ALM techniques – Renewal and surrender rate assumptions – Effects of changes in surrender rate assumptions:

The Group performs regular simulations to test the behaviour of the various portfolios according to different interest rate and equity price scenarios.

Asset/liability simulations are carried out using proprietary software that takes into account the specific characteristics of the life insurance business. They are based on a certain number of typical interest rate scenarios. In addition, a large number of scenarios are generated at random to measure the statistical dispersion of results (stochastic simulations).

Exposure to a fall in interest rates

The impact of a possible fall in interest rates on the Group's ability to fulfil its commitments to policyholders is analysed at regular intervals.

Asset/liability simulations have shown that the resistance of the insurance book to a fall in interest rates is satisfactory.

This situation is the result of the following measures, implemented in recent years:

• revision of general policy terms to limit the duration and level of yield guarantees;
• extension and annuitisation at 0% of single premium policies with a guaranteed rate of return;
• conservative approach to determining technical reserves for annuity products;
• matching of interest rate commitments with fixed-rate bonds that have an at least equivalent life.

Exposure to an increase in interest rates

The risk associated with an increase in interest rates is closely monitored and this is a key focus of our asset/liability management.

Liabilities:

• combined unit-linked/non-unit-linked policies include contractual clauses limiting or banning transfers between portfolios in the event of an unfavourable change in market conditions;

• the duration and level of yield guarantees is limited through the development of products offering guaranteed yields that are adjusted at annual intervals, thereby allowing asset managers to reduce the weighting of long-dated bonds in the managed portfolios.

Assets:

• floating rate and index-linked bonds represent around 10% of the portfolios;
• part of the portfolio of fixed-rate bonds is hedged using caps.

In the case of a sharp rise in interest rates to above certain trigger points, the hedges acquired by the Group would generate additional revenues corresponding to the difference between the trigger rate and actual long-term interest rates on the financial markets, thereby improving the return on the hedged assets in a period of rising interest rates. The hedging programme is extended each year, to keep pace with growth in assets under management.

26.5 Insurance risk

26.5.1 Contract terms and conditions

26.5.1.1 Types of insured risk by class of business and overview of the business lines

Three classes of business have been identified – savings, pensions and personal risk – in accordance with the differing nature of the Group's commitment.

Savings contracts: mainly financial commitments

Savings contracts fall into two broad categories:

• Traditional savings contracts, where the insurer is committed to paying a capital sum plus any guaranteed yield and a share of the investment yield over and above the guaranteed minimum in the event of death or when the contract is surrendered or matures;
• unit-linked products, where the policyholder bears the financial risk and the insurer's commitment is limited to the additional cover provided, consisting generally of a guaranteed death benefit.

Pension products: technical and financial commitments

Commitments associated with annuity-based pension products depend on:

• the benefit payment period, which is not known in advance;
• the interest rate, corresponding to the return on the capital managed by the insurer.

Personal risk contracts, giving rise to a technical commitment

The risk associated with these contracts is determined primarily by the insured's age, gender and socio-professional category.

26.5.1.2 Description of the main policyholder guarantees

• traditional savings contracts – which give rise to a commitment to pay a capital sum – fall into four broad categories:

• deferred capital insurance with counter-insurance of premiums, giving rise to the payment of a lump sum or annuities;
• term life insurance, giving rise to the payment of a capital sum when the contract matures, regardless of whether the insured is still alive or not;
• endowment insurance, giving rise to the payment of a capital sum to the insured when the contract matures or to a named beneficiary if the insured dies before the maturity date;
• investment certificates, giving rise to the payment of a capital sum.

These contracts generally pay a minimum yield (credited interest) plus policyholder dividends.

Unit-linked savings contracts do not involve any capital guarantee for the insurer, except for contracts that also include death and/or disability cover. For these latter contracts, the insurer's commitment is limited to any positive difference between cumulative gross or net premiums and the value of the units.

Pension contracts – which give rise to a commitment to pay a life annuity – fall into the following categories:

• voluntary individual pension accounts ("Article 82" accounts) giving rise to the payment of a life annuity from retirement. Retirement age is decided by the insured and a reversionary pension may be paid to a named beneficiary. The contract includes an option to convert the annuity into a lump sum;
• compulsory individual pension accounts ("Article 83" accounts) giving rise to the payment of a life annuity. The total annuities paid to the insured are based directly on the insured's salary during the contribution period and a reversionary pension may be paid to a named beneficiary;
• defined benefit plans ("Article 39" plans) funded by contributions based on total payroll. The contributions are paid into a mutual fund. When each plan participant retires, the total amount of future pension benefits is transferred from the mutual fund to the pension fund. Benefits are paid in the form of annuities;
• points-based pay-as-you-go group pension plans ("Article L.441-1" plans) giving rise to the payment of annuities corresponding to the number of points earned during the contribution period multiplied by the value of one point. Annuities are adjusted based on changes in the value of a point.
• immediate and deferred annuity contracts, giving rise to the payment of annuities immediately or at the end of a specified period.

Contracts to fund length-of-service awards payable to employees in France on retirement are also qualified as pension contracts. Under these contracts, the insurer's liability for the payment of benefits is limited to the amount held in the related fund.

Personal risk contracts comprise various types of primary guarantees covering such risks as death, temporary or permanent disability, long-term care, health and unemployment. The main types of contracts are as follows:

• term life insurance, renewable term insurance, long-term insurance and whole life insurance contracts, which pay a lump sum in the case of death or permanent disability of the insured. Most of them include an accidental death option whereby the death benefit provided for under the primary guarantee is doubled or tripled;
• contracts paying a temporary or life annuity to dependent children or the spouse on the death of the insured;
• death/disability contracts providing for the payment of a lump sum in the case of death of the insured or a per diem allowance for temporary disability or a lump sum or annuities for permanent disability. Temporary disability benefits are payable on a monthly basis, in some cases after a waiting period;

• loan insurance contracts, which cover all or part of an outstanding loan in the case of death of the insured, or monthly repayments – less a specified deductible – during a period of temporary disability or until the insured is recognised as being permanently disabled, or all or part of the monthly repayments in the case of permanent disability, or all or part of the monthly repayments after a waiting period in the case of unemployment. Death cover is compulsory and the loan will not be paid out until evidence of cover is provided;

• long-term care insurance contracts, providing for the payment of a fixed annuity covering part of the cost of longterm care. The amount of the annuity depends on the option selected by the insured;
• supplementary health insurance contracts, which cover all or part of the healthcare costs incurred by the insured, the insured's spouse and dependent children, that are not reimbursed by the social security authorities;

In addition, the Group's subsidiaries in Portugal (Global Nao Vida) and Brazil (Caixa Seguros) write Property & Casualty and liability insurance, including building insurance and auto insurance. The cover provided under these contracts is determined in accordance with local insurance regulations. Commitments under Property & Casualty and liability insurance are marginal in relation to those arising from the personal insurance written by the Group.

26.5.1.3 Participation clauses

Non-unit-linked savings contracts, certain group personal risk contracts and certain pension contracts include participation clauses. Under the terms of these clauses, the parties agree to share – on the basis defined in the contract – part of the income generated by the investment of the funds corresponding to the contract's technical reserves and, in the case of pension and personal risk contracts, part of the underwriting result.

26.5.1.4 Participation policy

Most contracts contain a discretionary participation feature, whereby the participation allocated to the insured is determined by the insurer as part of its marketing policy subject to compliance with the contract terms and the applicable laws. Participation is determined based on investment income for the year and the insurer has full discretion over the volume of capital gains realised during the period. The insured do not have individual rights to the participation until it is allocated to benefits or mathematical reserves. Participation that has been attributed but not yet allocated is accumulated in the policyholders' surplus reserve.

26.5.1.5 Basis for determining participation rates

Participation rates are determined based on the local accounts.

26.5.2 Valuation of insurance liabilities (assumptions and sensitivities)

26.5.2.1 Technical reserve models

Technical reserves are defined as follows:

• mathematical reserves correspond to the difference between the present values of the respective commitments of the insurer and the insured;
• policyholder surplus reserves correspond to the participation attributed to the contract beneficiaries that is not payable in bonuses in the year following the one in which the surplus was generated;
• administrative expense reserves are intended to cover future contract administration costs that are not otherwise covered;
• escalating risks reserves correspond to the difference between the present values of the respective commitments of the insurer and the insured under temporary and permanent disability and long-term care contracts;
• unearned premium reserves cover the portion of written and accrued premiums for the period between the reporting date and the next premium payment date or the contract expiry date. They are recorded for all types of contracts;
• premium deficiency reserves cover the portion of claims and benefits and the related handling costs for the period between the reporting date and the earliest possible premium adjustment date or the contract expiry date that is not covered by the unearned premium reserve;
• outstanding claims reserves cover the estimated principal amounts and internal and external expenses payable to settle all outstanding claims, including total future annuity payments.

26.5.2.2 Modelling objectives

The approach used to ensure that technical reserves are adequate focuses on:

• managing the risks associated with a fall in interest rates;
• taking swift action to adjust technical reserves following a change in mortality tables;
• using experience-based data concerning annuities in payment when observed losses appear unusually low compared with expected mortality rates.

26.5.2.3 Procedure for determining the main assumptions

The assessment of technical reserves is supported by:

• detailed knowledge of effective dates and the timing of accounting recognition and processing of the various technical and management events, as well as of the exact specifications of period-end processing operations and their scheduling, in order to accurately determine the underwriting and loss years;
• the creation of files at each period-end to check the consistency of reserves with technical flows;
• recurring audits of management system calculations, based on random tests and detailed repeat calculations;

• detailed risk assessments, based on prospective guaranteed yield calculations taking into account commitments in excess of regulatory limits, and on detailed statistical and other analyses of personal risk contracts, including loss monitoring (by contract/underwriting year/loss year) and tracking of the utilisation of reserves.

26.5.2.4 Assumptions based on market or company-specific variables

Discount rates for savings and life insurance contracts are capped at a level corresponding to a conservative estimate of the expected return on the corresponding assets. Non-life technical reserves are discounted at market interest rates. All other assumptions are determined by reference to internal experience-based data.

26.5.2.5 Use of assumptions that do not reflect historical experience

Assumptions are generally based on past experience and do not differ from those that would be expected to be used based on observed historical data. However, for liability adequacy testing purposes, the Group uses dynamic surrender rates which factor in possible increases in surrender rates that are not supported by past experience. In addition, the allocation keys used to allocate unrealised capital gains are based on the present value of future profits as determined for the Embedded Value calculations. As such, they do not reflect observed historical data but consist of a reasonable projection of future unrealised gain allocations, based on the principles applied to calculate the Group's Embedded Value published each year.

26.5.2.6 Assumption correlations

Apart from the use of dynamic surrender rates reflecting the correlation between surrender rates and the level of guaranteed yields for liability adequacy testing purposes, correlations among the various assumptions are not taken into account.

26.5.2.7 Uncertainty concerning insurance cash flows

Uncertainties concerning insurance cash flows mainly relate to the timing of surrenders and the payment of death and other benefits.

26.5.2.8 Sensitivity of MCEV to changes in surrender rates and loss ratios

At 31 December 2010, a 10% fall in surrender rates would have a positive impact of €136 million on MCEV©; a 5% fall in observed losses (mortality and disability) would have a positive impact of €133 million on MCEV©.

26.5.3 Concentration of insurance risk

26.5.3.1 Use of reinsurance to reduce concentrations of insurance risk

The Group's reinsurance programmes are designed to avoid earnings fluctuations and increase its underwriting capacity. The objectives of the reinsurance policy defined by the Board of Directors are as follows:

• to implement a reinsurance programme covering direct business and inward reinsurance written for provident institutions and subsidiaries;
• to protect underwriting results by entering into non-proportional treaties which are geared to the size of the Group and provide excess-of-loss cover per risk and per occurrence: (catastrophe risk);
• to share risks on large-scale new business.

26.5.3.2 Loss exposure per risk and per occurrence

All portfolios are covered by catastrophe excess-of-loss reinsurance obtained from professional reinsurers.

• Individual policies: death and permanent and total disability risks for all portfolios of individual policies (direct business and inward reinsurance written by CNP Assurances for its LBPP, CNP Vita and CNP Vida subsidiaries) are reinsured on the market as follows: for each catastrophic loss event – defined as an event involving at least five victims – the Group retains ten times the annual social security ceiling (€34,620 in 2010) and the reinsurers cover 1,000 times this ceiling per event and 2,000 times the ceiling per loss year.
• Group policies:
• a) death and disability risks on all Group policies (direct business net of risks ceded to co-insurers, and all quota-share reinsurance purchased from CNP Assurances by provident institutions and mutual insurers) are covered through the Bureau Commun des Assurances Collectives pool. The system provides successively for the retention of the two largest claims per insurer, €30 million in co-insurance cover (of which CNP Assurances' share is 26%) and reinsurance cover purchased by the pool from external reinsurers. There are four levels of reinsurance cover, as follows: level 1: 20 XS €30 million; level 2: 100 XS €500 million; level 3: 250 XS €150 million; and level 4: 100 XS €400 million with 200% paid reconstitution except for nuclear and NBC terrorism risks. A loss event is defined as involving three or more victims;
• b) catastrophic risks insured by CNP Assurances for provident institutions and mutual insurers are reinsured on the market. A loss event is defined as involving three or more victims. The Group and provident institutions (acting as a matter of priority on behalf of the two or three largest claimants) retain €1.25 million per loss event and the reinsurers cover €37 million per loss event and €60 million per loss year, except for nuclear, and nuclear, biological and chemical terrorism risks, for which the ceiling is €30 million per loss year.

All portfolios are also covered after 40 times the ceiling per loss year for high capital payouts in the case of IPA3 death of an insured.

Reinsured portfolios are analysed each year, covering:

• the age pyramid, risk dispersion and concentration of insured populations;
• the number, size and cause of paid claims, including a detailed analysis of the largest claims;
• underwriting and reinsurance results.

Reinsurance balances are net settled at quarterly, half-yearly or annual intervals depending on the treaty. There are currently no disputed balances.

26.5.4 Financial options, guarantees and embedded derivatives not separated from the host contract

Exposure to interest rate and market risks associated with embedded derivatives not measured at fair value. Non-unit-linked savings contracts with a guaranteed yield have been classified by level of commitment, as follows (in

declining order):

• contracts offering a guaranteed rate of return and a guaranteed profit share when the contract matures;
• contracts offering a higher fixed rate of return (generally 75% of the TME rate) over a maximum of eight years;
• contracts offering a guaranteed rate of return representing less than 60% of the TME rate at the time of payment.

Technical reserves on unit-linked savings contracts are analysed by guaranteed yield in Note 22.

26.5.5 Credit risk arising from insurance business

26.5.5.1 Credit risk arising from outward reinsurance – Terms and conditions of guarantees received and given

The Group regularly checks the solvency of its reinsurance partners. The discriminating criteria applied for the selection of these partners include their credit rating.

Excess-of-loss contracts have been placed with reinsurers who are rated between A-and AAA.

26.5.6 Insurance-related legal risks

Certain specific risks are associated with insurance contracts, including the risk of disputes with the insured or beneficiaries.

The number of new lawsuits concerning the interpretation of policy terms dropped 5% in 2010, while the number of outstanding lawsuits fell by 11% to 1,439 at the year-end. This was a greater drop than in 2009 (3%) because of the fall in the number of new disputes and a 5% year-on-year increase in the number of claims dismissed.

The contested policies represent only a minute proportion of the total number of individual and group policies managed by the Group.

Two-thirds of lawsuits concern temporary disability clauses and a smaller number concern death benefits.

Certain issues raised in connection with lawsuits go beyond a simple dispute between CNP Assurances and the insured. These issues could have serious consequences for the entire insurance industry if the courts all ruled against the insurer.

There is also evidence of certain emerging insurance risks. The legal security of the business must be underpinned by strict application of existing legislation in a highly-regulated environment in which legal interpretations and outcomes can be difficult to predict. It is also vital to carefully monitor pending legislation and the Group actively participates in all of the representative professional bodies and all of the work related to new legislation in order to be fully aware of all of the potential impacts.

26.6 Risk management

Risk management objectives and methods – Underwriting and risk selection policy – Pricing policy – Risk assessment methods.

The Group has established management information systems designed to ensure that it fulfils its commitments to shareholders. These management information systems:

• roll down Group objectives to the level of the individual businesses;
• track the progress made by each business in meeting these objectives, in order to allow corrective action to be taken on a timely basis;
• analyse the components of profit and value creation.

They are used to support underwriting and pricing decisions, based on specific analyses performed for each individual insurance application.

In particular:

• budgets and business plans provide the basis for analysing the components of profit, assessing forecast profitability and measuring the impact of product decisions on future profits;

• embedded value and new business calculations reflect the business's current capital resources and its ability to create value. Each year, differences between forecast and actual value creation are analysed and presented at the same time as the financial statements.

General forecasting system:

Asset and liability projections are produced annually, in the fourth quarter, and used to calculate policyholder dividend rates for the year, as well as to produce budgets and business plans.

Medium and long-term projections are used to produce financial trajectories and perform In-force and new business calculations, in connection with the annual business valuation exercise.

Forecasting models are tailored to the types of products concerned. They include:

• asset/liability models for savings and pension products;
• specific loan insurance models which break down the insurance book by underwriting year;
• models tailored to individual and group personal risk products, incorporating risk measurement factors and statistical data;
• models designed to simulate future annuity commitments.

The results of the detailed analyses are consolidated by type of risk according to a central scenario based on the assumption that conditions in the financial markets will remain stable and that the Group will hold onto its market shares. Alternative scenarios are also used to assess the sensitivity of earnings to changes in premium income, conditions on the financial markets and policyholder behaviour.