E _ Further Information ② As part of our audit, we evaluated the appropriateness of selected Upon request from the U.S. Securities and Exchange controls established by the Company for the purpose of selecting Commission (“SEC”), AllianzGI U.S. has provided substantial actuarial methods, determining assumptions and making information to the SEC in connection with an SEC investigation of estimates for the measurement of certain technical provisions in the Funds, and Allianz is fully cooperating with the SEC's ongoing property-casualty insurance. investigation. In addition, the U.S. Department of Justice (“DOJ”) is With the support of our property-casualty insurance continuing its investigation concerning the Funds, and AllianzGI valuation specialists, we have compared the respective actuarial U.S. is also fully cooperating with the DOJ in the investigation and methods applied and the material assumptions with generally is continuing its own review of the matter. recognized actuarial methods and industry standards and Allianz SE's executive directors have assessed the facts on examined to what extent these are appropriate for the valuation. the basis of the information currently available to Allianz. Our audit also included an evaluation of the plausibility and In light of the discussions with plaintiffs and U.S. integrity of the data and assumptions used in the valuation and a Governmental Authorities concerning the Structured Alpha matter reconstruction of the claims settlement processes. Furthermore, we and in anticipation of settlements with major investors in the recalculated the amount of the provisions for selected lines of Funds, Allianz decided to recognize a provision of € 3.7 billion for products, in particular lines of products with large reserves or the existing legal risks under the “other liabilities” balance sheet increased estimation uncertainties. For these lines of products we item in the consolidated financial statement. The provision reflects compared the recalculated provisions with the provisions the elements of the expected obligation in the Structured Alpha calculated by the Company and evaluated any differences. We matter, for which, as of today, a reliable estimate could be also examined whether any adjustments to estimates in loss determined. Final settlements with major investors were reached reserves at Group level were adequately documented and shortly thereafter and Allianz believes that these settlements substantiated. Our audit also included an evaluation of the Group represent a substantial majority of the Structured Alpha civil Actuarial department's reporting to the Group Reserve litigation exposure. Committee. Discussions with remaining plaintiffs, the DOJ as well as the Based on our audit procedures, we were able to satisfy SEC are ongoing. Based on the executive directors’ in depth ourselves that the estimates and assumptions made by the assessment, it is currently not possible to estimate the timing or the executive directors are appropriate overall for measuring the nature of any global or coordinated resolution of these matters. It technical provisions in property casualty insurance. is expected that additional expenses will be incurred that cannot reliably be estimated and consequently are not included in the ③ The Company's disclosures on the measurement of the provisions provision. for claims outstanding in property-casualty insurance are included Due to the significant amount of the provision and the in sections 2 and 14 of the notes to the consolidated financial considerable judgment on the part of the executive directors, this statements. matter was of particular significance in the context of our audit. ❸ Accounting treatment of the legal risks in connection with ② As part of our audit, we evaluated, among other things, the AllianzGI U.S. Structured Alpha Funds Company's procedures and measures for recording legal risks and assessing the outcome of pending legal proceedings and ongoing ① Since July 2020, multiple complaints have been filed in U.S. Federal investigations and their accounting treatment. Our audit also Courts and also in certain U.S. State Courts against Allianz Global included a substantive examination of the pending legal Investors U.S. LLC, New York ("AllianzGI U.S.") and in certain proceedings against AllianzGI U.S. and its affiliated companies complaints, against certain of AllianzGI U.S.’s affiliates, including and the ongoing investigations of the SEC and DOJ in connection Allianz SE, Munich, and Allianz Asset Management GmbH, Munich, with AllianzGI U.S. Structured Alpha Funds, as well as an (“Affiliate Allianz Defendants”), in connection with losses suffered evaluation of the assessments made by the executive directors on by investors in AllianzGI U.S.’s Structured Alpha funds (“Funds”) the basis of the claims asserted against the relevant Group during the Covid-19 related market downturn. companies. The actions brought to date have included institutional In this context, the Company provided us with information in investor plaintiffs and individual plaintiffs, with certain plaintiffs writing on the pending legal proceedings and the ongoing asserting claims on behalf of putative classes. An investment investigations as well as the assessments of the executive directors consultant has also asserted third-party claims against AllianzGI regarding a possible outcome of the legal proceedings and U.S.. Plaintiffs in the currently pending 26 actions have alleged investigations, which we evaluated. We also obtained losses of approximately USD 6,3 billion. In addition to the explanations of and assessed the assumptions underlying the complaints filed to date, other investors in the Funds, or other third estimates made by the executive directors, as well as the legal parties, may bring similar actions. assessment of the facts. Plaintiffs in these actions have dismissed without prejudice We also held meetings with the internal legal department all claims against Affiliate Allianz Defendants, including Allianz SE and the Company's external legal counsel in order to receive and Allianz Asset Management GmbH, with only one exception updates on current developments and the reasons for the where Allianz Global Investors Distributors LLC is kept as a executive directors' respective estimates. As of the balance sheet defendant next to AllianzGI U.S.. AllianzGI U.S. continues to defend date, we also obtained external legal conformations that support against the allegations contained in the complaints. Annual Report 2021 − Allianz Group 199