Achmea Bank Holding’s Executive Board members are:

M. van Ee (CEO)	M. Wissels (CFO)

Implementation of and Compliance with the Banking Code

The Banking Code of the Netherlands Bankers’ Association came into operation on 1 January 2010. In this section, Achmea Hypotheekbank describes in broad terms how it applied the Banking Code in 2010. This section of the report also serves as a declaration regarding corporate governance specifically concerned with the Banking Code, as referred to in Section 2a of the Decree establishing more detailed requirements concerning the contents of an Annual Report.

Supervisory Board
Achmea Hypotheekbank amended its Supervisory Board rules as part of the implementation of the Banking Code. The Board has five members to perform its supervisory role, giving it ample strength with reference to Achmea
Hypotheekbank’s profile as a retail mortgage bank. Achmea Hypotheekbank has a profile reflecting the ideal composition of the Supervisory Board. As and when a vacancy arises, a specific profile will be drawn up based on the general requirements. The present members of the Supervisory Board possess appropriate expertise in the fields
of banking, insurance, risk management and duty of care and keep abreast of the latest thinking in these areas. The two members delegated to serve on the Audit & Risk Committee possess many years’ experience in the banking sector and bank-related risk management in particular. The same two members also make up the Remuneration
Committee and, in that capacity, oversee the implementation of the remuneration policy.

The Supervisory Board meets in plenary session at least five times a year, and holds more frequent meetings in practice, including informal meetings. The members have the opportunity and are able to devote the necessary time to their duties in order to perform them effectively (also between meetings). Two of the members are appointed
as representatives of the sole shareholder Achmea Holding. They do not receive separate remuneration for their membership of the Supervisory Board but are paid by Achmea Holding since their Supervisory Board duties are part of their job description. The remaining members receive appropriate remuneration for their activities, which is
not determined by the bank’s results.

Education permanente
A programme of éducation permanente (EP) was initiated in 2010 for the Supervisory Board and Executive Board members combined, under which the first topics to be covered were ‘Duty of Care: Customer First’ and ‘Balance Sheet Management’. The Audit & Risk Committee also attended a detailed presentation on hedge accounting.
An evaluation of these sessions led to a decision to continue pursuing the present course of action in 2011, with all the topics specifically identified by the Monitoring Committee due to be covered.

Executive Board
In order to ensure that it acts in compliance with the Banking Code, the Executive Board has also amended the Executive Board rules. The Executive Board is normally made up of two members but there were in fact three members temporarily in 2010 to ensure a smooth changeover at the top. The Chairman of the Executive Board is responsible for the bank’s overall risk policy and chairs the general management meetings and the specific meetings of the Senior Management Group as well as the Product Committee and the Project Committee. The other Executive Board member combines the functions of Finance Director and Risk Management Director. In this combined capacity, he chairs the Credit Committee and Operational Risk Committee, the Asset & Liability
Committee (ALCO) and the Pricing Committee. The modus operandi is laid down in the ‘Risk Management Governance & Policy Frameworks’. Just as for the Supervisory Board, profiles have also been drawn up for the members of the Executive Board. The present members of the Executive Board have the right background, knowledge and experience to enable them to perform their duties effectively. They have signed the standard moral
and ethical conduct declaration, as found on the Achmea Hypotheekbank website.

Focus on the customer and customer interests
An awareness programme under the banner of ‘Duty of Care: Customer First’ specifically involved initial steps to anchor duty of care firmly within the culture prevailing throughout the bank. These efforts will be pursued in 2011, including simplification and clarification of customer information to enable customers to understand our products better. There will also be a rationalisation and simplification of the product range. A reappraisal of the existing product portfolio was embarked upon in 2010 to identify what today are seen as duty-of-care issues and to make changes to the products on offer where necessary. The Executive Board has also asked all staff to comply with the moral and ethical declaration and its underlying principles in their day-to-day activities and steps have been taken to ensure that newly recruited staff are explicitly made aware of this requirement in their contract of employment so that they appreciate the importance attached to the fundamental philosophy behind the declaration.

Risk Management and Audit
The above changes to the internal governance structure of Achmea Hypotheekbank, involving various management committees, reflect the principle of three lines of defence. Risk policy was also reviewed in 2010 and, where necessary, augmented and refined. The Supervisory Board Audit & Risk Committee scrutinised and approved the
revised governance structure and updated risk policy. The Committee meets at least four times a year, with the members of the Executive Board retiring from part of one of these meetings at which the independent internal audit department, Group Internal Audit Services (GIAS), and the external auditors are represented. The Audit & Risk
Committee approved the bank’s risk appetite and oversaw the proper enforcement of the policy. In 2011, the bank’s risk appetite policy will be translated into specific operational guidelines. The risk analysis conducted by GIAS will be agreed with the Nederlandsche Bank (DNB) and the external auditors. The audit plan for the year derived from this risk analysis was approved by the Supervisory Board Audit & Risk Committee.

Product approval process
The product approval process was revised by Achmea Hypotheekbank in 2010 and standardised across the organisation. In addition the Product policy was updated. The changes introduce better safeguards than those previously in place for ensuring that products are not released onto the market prematurely, i.e. before they represent added value for the target groups among which they will be distributed or before communication surrounding all aspects of them is of a sufficiently high standard to allow both customers and any distribution partners involved to be properly informed. GIAS reviewed this product approval process and reported accordingly.

Remuneration policy
Achmea Hypotheekbank’s remuneration policy is the same as that of the parent company Achmea Holding. This policy was revised in 2010 to reflect the ‘Principles for Controlled Remuneration Policy’ drawn up by the Netherlands Authority for the Financial Markets (AFM) and the Nederlandsche Bank (DNB) in May 2009. A limit of one year’s salary for the amount of termination payments now applies to the members of the Executive Board. In the new remuneration policy, any variable remuneration component will not amount to more than the fixed component. Moreover, it will not be paid in financial instruments but in cash, with 50% being paid as a lump sum in the year following that to which it relates and the other 50% paid into a blocked savings account, with one third of the latter amount being released annually over a period of three years. The targets which are set reflect the interests of all four stakeholders, taking a long-term view and having regard for the declared risk appetite.
The targets are both financial and non-financial in nature.