Application of corporate governance rules

Material aspects of application of Best Practices of WSE-Listed Companies 2021 at PZU

• PZU sees to it that there is due communications with stakeholders by having a clear and reliable information policy. The Rules of PZU’s Information Policy towards Capital Mar et Players are available on the Company’s website, Https://www.pzu.pl/_fileserver/item/1543244 ;
• PZU maintains a corporate website at www.pzu.pl, which features all disclosures required by the law and indicated in WSE BP 2021. Under Investor Relations www.pzu.pl/ri, which is available in Polish and English, the following is published, in particular:
  • the Strategy 2021–2024 with measurable financial and non-financial objectives, and the ESG strategy as its integral part that includes environmental issues, climate change risks and indicators, sustainable development, social and labor issues (available at: : https://www.pzu.pl/_fileserver/item/1529177) );
  • the Strategy 2025–2027 with broad aspects of sustainability development (available at: https://www.pzu.pl/_fileserver/item/1557443 );
  • presentations including a discussion of quarterly financial results, the market environment, and progress on strategic financial targets and ESG targets;
  • recordings and transcriptions of result conferences, shareholder meetings and other key corporate events (such as strategy publication);
  • statements of selected financial data;
  • aggregate recommendations of analysts with an average target price of shares, as well as the consensus for quarterly and annual projected consolidated results;
  • calendars for financial report publication, performance meetings, chats and participation in investor conferences.
• PZU presents a description of its ESG activities, including how climate is accounted for in its decisionmaking processes, an equal pay index, and a statement of expenses incurred by the PZU Group to support culture, sport, physical activity, social organizations and foundations, charities, media, and trade unions. This information can be found in the integrated online annual report, the Management Board’s report on the Company’s activity and the report on non-financial information. All documents are available on the PZU website, in Polish and English.
• Every quarter, PZU organizes result conferences for investors and analysts involving representatives of the Management Board and chat sessions for retail investors held by the CFO. The meetings are to discuss financial results, the degree to which the strategy is implemented, and the most important events affecting the PZU Group’s operations.
• PZU representatives regularly contact investors (both institutional and retail) and analysts, allowing them to ask questions and obtain clarifications pertaining to matters of their interest. Contact occurs both within electronic communication channels and through in-person meetings during investor conferences organized by Polish and foreign brokerage houses as well as on-site meetings.
• PZU endeavors to respond to investors’ questions immediately, and with respect to e-mail questions – within three working days.

More in chapter 7.4. Statements

Material aspects of application of Best Practices of WSE-Listed Companies 2021 at PZU

• Supervisory Board Members and Management Board Members are subject to periodic suitability assessments. Supervisory Board Members are assessed by the Shareholder Meeting, and Management Board Members – by the Supervisory Board. The assessment includes verification process based on the criteria of competence, guarantee (of reputation and reliability), independent judgment (including no conflict of interest) and sufficient time dedication to the position of the Supervisory Board Member or the Management Board Member, as the case may be. In 2024 and till the publication date of this report all Members of the Management Board and of the Supervisory Board had the relevant competencies, skills and experience, as described later in the statement, and a positive suitability assessment.
• Members of the PZU Management Board and of the PZU Supervisory Board strove to apply the rules relating to them to the fullest possible extent, which included:
  • in 2024, functions on the PZU Management Board were the main area of the professional activity of PZU Management Board Members;
  • the PZU Supervisory Board Members dedicated sufficient time to perform their duties, with the majority of Members attending all PZU Supervisory Board meetings in 2024;
  • the PZU Supervisory Board Chair did not combine this function with that of Chair of the Audit Committee operating within the PZU Supervisory Board;
• As at the end of 2024, 9 out of 10 PZU Supervisory Board Members (including 3 out of 4 Audit Committee Members, i.e. the Chair and two Members) met the independence criteria laid down in the Act of 11 May 2017 on Statutory Auditors, Audit Firms and Public Supervision. All Supervisory Board Members have submitted declarations that they do not have actual and material relations with any shareholder holding at least 5% of the total vote in the Company;
• As at the date of signing of the Activity Report, i.e. 26 March 2025, 7 out of 9 Supervisory Board Members (including the Chair of the Audit Committee and all of its Members) met the independence criteria laid down in the Act of 11 May 2017 on Statutory Auditors, Audit Firms and Public Supervision. 6 Supervisory Board Members have submitted declarations that they do not have actual and material relations with any shareholder holding at least 5% of the total vote in the Company. Independence within the understanding of the Best Practices of WSE Listed Companies (DPSN 2021) was met by 5 members of the Supervisory Board.
• PZU sets aside administrative and financial resources required to ensure the efficient operation of the Company’s Supervisory Board. Supervisory Board meetings are held at the Company’s registered office. PZU has a team to work with statutory bodies.
• As regards Principles 2.1 WSE BP & 2.2 WSE BP, PZU employs a diversity policy towards members of PZU governing bodies, adopted by the PZU Supervisory Board and Shareholder Meeting, which specifies the diversity targets and criteria in such areas as gender, education, specialist knowledge, age, and professional experience, and lays out the timeline and method for monitoring the achievement of those targets. In line with the policy, the Shareholder Meeting and Supervisory Board, in selecting the members of the Supervisory Board and the Management Board, respectively, strive for gender parity in PZU governing bodies, with the minimum gender minority participation at 30%. At the end of 2024, the gender diversity condition for the minority share of no less than 30% was not satisfied in the PZU Management Board. The condition was met in the PZU Supervisory Board.
• The Supervisory Board effectively supervises PZU’s operations, verifies the wor of the Management Board in implementing the strategic goals as established, and monitors the performance of PZU and the PZU Group. The Management Board provides the Supervisory Board with access to information on matters concerning PZU. Each year, the Supervisory Board prepares and provides the Shareholder Meeting with an annual report on its activities containing all elements specified under Principle 2.11 WSE BP, including an assessment of the company’s position, an assessment of the internal control, ris management and compliance systems, an assessment of the compensation policy functioning, an assessment of how PZU complies with its disclosure obligations, an assessment of the reasonableness of expenses incurred by PZU and the PZU Group to support culture, sport, charities, media, social organizations and trade unions, an assessment of the implementation of key sustainable development commitments, and an assessment of the implementation level of the diversity policy with respect to the Management Board and the Supervisory Board.

More in chapter 7.5. Statements

Material aspects of application of Best Practices of WSE-Listed Companies 2021 at PZU

• PZU maintains effective internal control, risk management and compliance systems, as well as an effective internal audit function:
  • The PZU Group’s internal control system has been developed at the level of the leading entity i.e., PZU) and is applicable to all members of the PZU Group, in consideration of their distinct nature, proportionality and adequacy.
  • In order to ensure the proper quality and continuous improvement of the internal audit function, internal on an annual basis) and external not less than once every five years) assessments of the PZU’s internal audit activities are conducted. A third-party assessment of the internal audit function at PZU conducted by PwC Advisory and an analysis of coordination of the Group’s internal audit run by the Internal Audit Department demonstrated general compliance with the International Standards for the Professional Practice of Internal Auditing and the Code of Ethics developed by the IIA;
  • PZU exercises supervision over the entire PZU Group’s ris management system. This supervision is based on mutual cooperation agreements entered into with the subsidiaries and the information provided thereunder. PZU manages risk at the PZU Group level on an aggregate basis, especially with respect to capital requirements. In addition, PZU, as a leading entity, manages risk concentration on the level of the whole financial conglomerate. PZU makes efforts aimed at ensuring adequate and uniform standards of compliance solutions in all subsidiaries and monitors compliance risk throughout the entire Group.
• Within the PZU structure, there are separate units responsible for performing the tasks of each system and function – the Internal Audit Department, the Compliance Department, the Risk Department and the Actuarial Department:
  • The Managing Director on Audit, who heads the Internal Audit Department, reports functionally to the Audit Committee of the PZU Supervisory Board and organizationally directly to the CEO of PZU (the person delegated to temporarily perform the function of the CEO of PZU). Appointment and dismissal of a person to head the Internal Audit Department requires the opinion of the Audit Committee of the PZU Supervisory Board. The person managing internal audit may directly contact the Supervisory Board and Audit Committee Chairperson, and in particular immediately provide the Audit Committee with material information with respect to material irregularities found. − The Managing Director on Regulations, who supervises the Compliance Department, reports organizationally to the CEO of PZU (the person delegated to temporarily perform the function of the CEO of PZU). The appointment and dismissal of a person to the position of the head of the compliance unit requires the opinion of the Audit Committee of the PZU Supervisory Board. The Managing Director on Regulations, as well as the Director of the Compliance Department, have direct access to the PZU Management Board Members and PZU Supervisory Board Members to whom the compliance function reports.
  • The Director of the Risk Department reports organizationally to the PZU Management Board Member responsible for risk management (in 2024, temporarily, this Director reported organizationally to the CEO of PZU due to the dismissal from the PZU Management Board of the Management Board Member responsible for risk management).
  • The actuarial function is supervised at PZU by the Company’s Chief Actuary, who is also the Director for Underwriting Ris in the Actuarial Department at PZU. The Company’s Chief Actuary reports to the PZU Board Member supervising the Actuarial Office and submits an annual Actuarial Function Activity Report to the PZU Management Board.
• The annual activity report concerning the Internal Audit Department, featuring, among others, an assessment of the internal control, compliance and risk management systems, is adopted by the virtue of the resolution of the PZU Management Board. The report is presented to the Audit Committee of the PZU Supervisory Board. The assessment presented in the report is discussed by the PZU Audit Committee Chair at the meeting of the PZU Supervisory Board.
• The PZU Supervisory Board monitors the efficiency of the internal control, risk management system and compliance function, along with the efficiency of the internal audit function based on, among others, the interim reports it receives; it also carries out an annual assessment concerning the efficiency of those systems and functions and includes relevant disclosures in its annual report.
• The compensation of persons responsible for risk management and compliance and of the Head of the Internal Audit Department depends on the completion of the assigned tas s, regardless of PZU’s financial performance.

More in chapter 7.6. Statements

Material aspects of application of Best Practices of WSE-Listed Companies 2021 at PZU

• On 29 June 2022, the PZU Shareholder Meeting adopted a resolution on the adoption of WSE BP 2021 in which it declared that, acting within its powers, it will be guided by WSE BP 2021 to the extent that it is addressed towards the Shareholder Meeting and shareholders, taking into account the generally applicable provisions of the law and PZU’s Articles of Association.
• In determining the time and place for the Shareholder Meeting, PZU ensures that as many shareholders as possible may take part – Shareholder Meetings ta e place in Warsaw, at the PZU’s registered office. Media representatives may be present at a PZU Shareholder Meeting;
• PZU does not allow shareholders to participate in the shareholder meeting using means of electronic communication (Principle 4.1). PZU believes that there are many technical and legal factors that may affect the proper course of the shareholder meeting if an e-Shareholder Meeting is introduced. The legal doubts pertain to the ability to identify shareholders and check the legitimacy of participants in the shareholder meeting. The risk of the occurrence of technical difficulties, e.g. with the internet connection or possible external interference in the IT systems may disrupt the work of the shareholder meeting and evince doubts concerning the efficacy of the resolutions adopted during its course.
• PZU live-streams Shareholder Meetings and information concerning the planned broadcast is published in advance on the Company’s website. After the Shareholder Meeting concludes its session, the recording is published on the PZU’s website under the Investor Relations section (https://www.pzu.pl/en/investor-relations/shares-and-bonds/shareholders-meetings );
• Members of the Management Board and of the Supervisory Board take part in the Shareholding Meeting, in a composition allowing them to give substantive answers to questions asked during the Meeting. The Management Board presents the participants of the Shareholder Meeting with the Company’s financial results and other material information, including non-financial information, and answers shareholders’ questions;
• PZU endeavors to ensure that draft resolutions be submitted no later than three days before the shareholder meeting. The PZU Management Board appends justifications to its draft resolutions on matters and decisions which do not pertain to the business of the meeting, unless such justifications arise from the documentation presented to the Shareholder Meeting. Draft resolutions submitted by shareholders should also be submitted with justifications. PZU publishes draft resolutions with justifications on the PZU website under the Investor Relations section on the day of the Shareholding Meeting announcement (https://www.pzu.pl/en/investor-relations/shares-and-bonds/shareholdersmeetings );
• In 2024, Principle 4.9.1 was incidentally violated. The principle states that where the shareholder meeting deliberates on the appointment of a person to the supervisory board or the appointment of a supervisory board for a new term, candidates for the board shall be put forward within a timeframe allowing the shareholders present at the shareholder meeting to make a decision with due consideration, but no later than three days prior to the shareholder meeting; candidate submissions, together with the complete documents concerning them, shall be immediately published at the Company’s website. Seeing that some candidates for the PZU Supervisory Board were put forward by a Company’s shareholder on 14 February 2024 i.e., one day before the PZU Extraordinary Shareholder Meeting), there has been an incidental violation of Principle 4.9.1. PZU published a current report on the submission of candidates for the PZU Supervisory Board by a shareholder and posted complete materials on the submitted candidates on its website as soon as they were received.
• PZU pays out the dividend to its shareholders regularly in line with PZU’s dividend policy and KNF’s position. The amount of the dividend proposed by the PZU Management Board is no less than 50% of the PZU Group’s consolidated financial result. Since 2010, i.e. since its first listing at WSE, PZU has been paying out the dividend every year, except for 2020, when KNF and EIOPA recommended that insurers temporarily suspend the payment of dividend.

More in chapter 7.7. Statements

Material aspects of application of Best Practices of WSE-Listed Companies 2021 at PZU

• PZU has internal regulations (in particular, rules for managing conflicts of interest, principles of ethics applicable to members of corporate bodies, PZU Group Best Practices) on the management of a conflict of interest and conclusion of transactions with related parties in the event that a conflict of interest may arise, which guarantee compliance with the principles found in Chapter 5 WSE BP 2021. These regulations also apply to all PZU Group companies, appropriately to the profile and scale of their operations.
• No PZU shareholder is treated preferentially in relation to other shareholders with respect to transactions with related parties. PZU has regulations concerning transfer pricing. As a general rule, for each transaction between related parties, an analysis is prepared to confirm that the transaction was concluded at arm’s length.
• According to PZU’s Articles of Association, if the value of a transaction with a related party exceeds 5% of total assets, the PZU Supervisory Board is obliged to decide whether to approve the transaction.
• In order to reduce the risk of conflict of interest, in accordance with the principles of ethics applicable to members of corporate bodies, Members of the PZU Management Board and of the PZU Supervisory Board are obliged to:
  • avoid actions which may give rise to a conflict of interest; − undertake actions necessary to identify a conflict of interest;
  • obtain approval (from the Management Board or the Supervisory Board or the Shareholder Meeting, as appropriate) for membership on the supervisory or management boards of public companies other than PZU Group companies, and entities whose operations may potentially be deemed as competitive;
  • seek to eliminate or mitigate the adverse impact of a conflict of interest on the operations of a PZU Group company and its relationship with other PZU Group companies, clients, and third parties;
  • inform (the Management Board or the Supervisory Board or the Shareholder Meeting, as appropriate) of an extant or possible conflict of interest, and to refrain from taking part − in discussions and voting on a matter in which a conflict of interest has arisen;
  • inform the compliance unit about a potential conflict of interest and actions taken.
• Potential conflicts of interest involving Management Board or Supervisory Board Members are analyzed within the framework of suitability assessment before these persons are appointed to those bodies, and within cyclical suitability reassessments. An annual analysis of additional actions taken by members of corporate bodies is also carried out.

More in chapter 7.8. Statements

Material aspects of application of Best Practices of WSE-Listed Companies 2021 at PZU

• PZU has a remuneration policy for PZU Management Board Members and PZU Supervisory Board Members, adopted by the PZU Shareholder Meeting. The objectives of the compensation policy are as follows:
  • supporting the implementation of the PZU Group’s strategy; − matching the level and structure of compensation to the PZU’s ris profile;
  • ensuring proper financial management of PZU and its long-term stability;
  • pursuing a bonus policy that is flexible and adapted to the PZU’s business position, by lin ing the variable compensation system of the company’s managers to the achievement of the management targets as determined and ensuring that this variable compensation is in proper proportion with fixed compensation;
  • preventing conflicts of interest.
• The compensation of Management Board Members is composed of a fixed and a variable portion. Variable compensation for a given financial year depends on the achievement of management targets selected by the Supervisory Board from a list, including the improvement of economic and financial indicators, and actions of social interest, including those which make the Company contribute to environmental protection.
• Compensation of Supervisory Board Members does not depend on PZU’s performance. They receive a fixed monthly compensation (regardless of the number of meetings), which is the product of the average monthly compensation in the corporate sector without distributions of bonuses from profit in Q4 of the previous year and the following multiplier of 2.75 The chairpersons of committees operating within the Supervisory Board receive compensation increased by 9%.
• Compensation rules do not provide for long-term incentive plans.

More in chapter 7.9. Statements

Material aspects concerning the application of Corporate Governance Rules for Regulated Institutions

• PZU has relevant internal rules and regulations concerning its organization and organizational structure. PZU’s organization enables the achievement of long-term strategic objectives and independent monitoring of operational and strategic risks. The strategic objectives are laid down in the PZU Group Strategy adopted by the Management Board and approved by the PZU Supervisory Board.
• The PZU organizational structure is commensurate with the scale of operations, the extent of realized functions and the scale and complexity of risks, and it effectively supports the achievement of the Company’s strategic ob ectives as well as immediate business and operating goals. For the organizational structure, please consult Investor Relations on PZU’s website (https://www.pzu.pl/relacje-inwestorskie/o-grupie/struktura-grupy). Within the PZU organizational structure, key functions are separated, there is an established scope of competence for each PZU Board Member and PZU Group Director, and there is a clear division of tasks and responsibilities among the various units. PZU headquarters is a support center for the PZU Management Board in managing the Company’s operations and coordinating activities within the PZU Group headquarters provides, among other things, corporate governance function and supervision, internal review, key functions of internal audit, risk, compliance and actuarial services, strategy, M&A and project management, HR, legal services, security, cybersecurity, AML, innovations, IT, client experience management, marketing and communications, sustainable development, administration, procurement, real estate, reinsurance, as well as management of finance and investments, products, sales processes and networks, client service processes, claims and benefits processes and IT); specialized units carry out operational activities in the following areas: claims and benefits, assistance, client service, insurance operations, insurance accounting and collection, analysis and reporting of employee operations, while organizational units in the field structure, including PZU Branches, are responsible for insurance sales and client service;
• PZU has detailed emergency and crisis management methods, including the PZU Group’s Corrective Measures Plan a document applicable to the PZU Group’s significant companies, particularly the ban s operating within the Group) and the Business Continuity Plan. PZU has a Crisis Management Team, the purpose of which is to supervise the operation of the business continuity management system, manage the crisis situation and undertake activities related to the management of the Crisis Situation;
• the Compliance Department and the Legal Department at PZU monitor the law and the recommendations of the supervisory authorities, ensuring that PZU’s activities comply with the law and supervisors’ requirements. Irregularities at PZU may be reported anonymously. The Whistleblowing Procedure ensures confidentiality, discretion and personal data protection for whistleblowers. An employee who reports a potential irregularity in good faith is not at risk of any sanctions; nor does he or she incur any consequences pertaining to his or her employment relationship due to that report. The Management Board provides the Supervisory Board with quarterly risk reports, which include information on compliance risk management and serious fraud, as well as with quarterly internal audit reports.

Material aspects concerning the application of Corporate Governance Rules for Regulated Institutions

• PZU operates with the interests of all stakeholders in mind. No shareholder is privileged in access to information. To this end, PZU adheres to the provisions included in among others) the Rules of PZU’s Information Policy towards Capital Market Players and Correspondence Procedure in the Area of Investor Relations, Best Practices of the PZU Group, Rules for Managing Conflicts of Interest, and Principles of Ethics Applicable to Members of Corporate Bodies.
• PZU ensures that shareholders have equal access to information, including such featured on shareholder meetings. All disclosures are published, among other places, under Polish and Englishlanguage Investor Relations in PZU’s website. The Investors Relations has a separate tab dedicated only to Shareholding Meetings, where draft resolutions with justifications are posted each time a Shareholder Meeting is announced.
• Shareholders have an impact on the PZU’s operations by passing resolutions at the PZU Shareholder Meeting. Each PZU share entitles the holder to one vote at the General Meeting. However, PZU’s Articles of Association limit the voting rights of shareholders in such a way that no shareholder other than the State Treasury may exercise more than 10% of the total number of votes existing in PZU at the Shareholder Meeting;
• PZU’s Articles of Association clearly define the competencies of the Management Board, Supervisory Board and Shareholder Meeting, ensuring the separation of ownership and management functions. As at the end of 2024, 9 out of 10 Supervisory Board Members met the criterion of independence laid down in the Act of 11 May 2017 on Statutory Auditors, Audit Firms and Public Supervision.; and as at the date of signing the Activity Report (i.e. 26 March 2025) – 7out of 9.
• PZU does not allow active electronic participation in Shareholder Meetings due to reasons presented with respect to the application of Principle 4.1 WSE BP 2021. PZU shareholders may watch online livestreams of the Shareholder Meeting.
• In the view of certain capital and personal links, PZU pays particular attention to the relationships and transactions within the PZU Tax Group and with related parties. For this purpose, it applies relevant policies and procedures. All transactions are performed in compliance with legal and tax requirements, in a transparent manner, meeting market standards and with documentation of transfer pricing to confirm that the prices used in transactions with related parties reflect the arm’s length principle.
• Decisions concerning the payout of dividend are taken in line with the Capital and Dividend Policy of the PZU Group and the recommendations of KNF. In line with the policy, PZU endeavors to maximize the rate of return on equity for the parent company’s shareholders, in particular by maintaining the level of security and retaining capital resources for strategic growth objectives through organic growth and acquisitions. The dividend amount recommended by the Board of Directors is a minimum of 50% of the PZU Group’s consolidated profit.

Material aspects concerning the application of Corporate Governance Rules for Regulated Institutions

• The Management Board is a managing body at PZU and is collegial in nature. At the end of 2024, it was composed of 7 persons. Management Board Members meet legal criteria (including those in the Insurance and Reinsurance Activity Act and Act on the Management of State Property), regulatory requirements, WSE BP 2021, and CGR. Management Board Members have the adequate level of knowledge, experience and skills to head the PZU business and their competencies complement each other allowing for a collegial level of management. The Supervisory Board assesses and reassesses the suitability of candidates for and members of PZU Management Board – individually and jointly. Verification is based on the criteria of competence, guarantee (of reputation and reliability), independent judgment (including no conflict of interest) and sufficient time dedication to the position of the Management Board Member. The individual suitability assessments of PZU Management Board Members conducted in 2024 confirmed that all Members of the Management Board had adequate knowledge and skills and meet all the suitability criteria necessary to hold their positions.
  • The Management Board is the sole body authorized to manage PZU’s operations and the sole to be responsible for it. The Management Board acts in the interest of PZU, in accordance with the Management Board’s Rules and Regulations, guided by law, recommendations of supervisory authorities, and internal regulations, having the safety of the Company in its mind.
  • The President of the Management Board directs the work of the Management Board. The Management Board Members are jointly responsible for the decisions which are reserved for their remit, regardless of the internal division of responsibility for the respective areas of operations. The PZU Management Board Members exercise oversight with respect to processes within their areas. The scopes of the areas supervised by individual Management Board Members are clearly and unambiguously defined in the Order of the President of the PZU Management Board on organizational oversight performed in the Company by PZU Management Board Members.
• Management Board Members are not involved in social or profit-making activity which could lead to a conflict of interest with respect to PZU’s operations, or adversely affect their reputation as a Management Board Member. The rules for identifying, managing and preventing conflicts of interest and the rules for excluding a member of the managing body in the event of a conflict of interest or the possibility of a conflict of interest are laid down in the Management Board’s Rules and Regulations and the Code of Ethics for Members of Management Boards of PZU Group Companies.

Material aspects concerning the application of Corporate Governance Rules for Regulated Institutions

• The Supervisory Board is a supervising body at PZU. Members of the Supervisory Board meet legal criteria (including those in the Insurance and Reinsurance Activity Act and Act on the Management of State Property), regulatory requirements, WSE BP 2021, and CGR. Supervisory Board Members have the adequate level of knowledge, experience and skills to supervise the PZU business and their competencies complement each other allowing for a collegial level of oversight. The Shareholder Meeting assesses and reassesses the suitability of candidates for and members of the Supervisory Board – individually and jointly. Verification is based on the criteria of competence, guarantee (of reputation and reliability), independent judgment (including no conflict of interest) and sufficient time dedication to the position of the Supervisory Board Member. In 2024, and to the date of signing this Activity Report, i.e., 26 March 2025, all members of the Supervisory Board and the Supervisory Board as a body had a positive suitability assessment.
• The Supervisory Board permanently and continually supervises PZU’s operations in all areas and may undertake necessary supervisory action in an ongoing manner. The competences of the Supervisory Board are regulated by the Articles of Association and the Rules and Regulations of the Supervisory Board. The Supervisory Board and respective Members thereof are guided by objective assessment and judgment, and among others may avail themselves of the services of experts and advisory companies.
• The Chair of the Supervisory Board directs the work of the Supervisory Board. At the end of 2024, it was composed of 10 persons. 9 out of 10 Members of the Supervisory Board met the independence criteria laid out in the Statutory Auditor Act (including 3 out of 4 Audit Committee Members, i.e. the Chair and two Members). As at the date of signing the Activity Report, i.e. 26 March 2025, the Supervisory Board consisted of 9 persons. 7 out of 9 Members of the Supervisory Board met the independence criteria laid out in the Statutory Auditor Act (including the Chairman and all Members of the Audit Committee).
• The Audit Committee of the Supervisory Board, in accordance with its Rules and Regulations, monitors the performance of auditing activities at PZU based on the principles and schedule agreed upon in advance with the auditor, in particular the performance of the audit by the audit firm, taking into account any conclusions and findings of the Polish Audit Supervision Agency. In 2024, the Audit Committee made the assessment of:
  • PZU’s financial statements and the PZU Group’s consolidated financial statements for the year which ended on 31 December 2023, and the Management Board’s report on the activity of the PZU Group and PZU in 2023, with the report on non-financial information;
  • the solvency and financial condition report of PZU and PZU Group for the year which ended on 31 December 2023;
• Supervisory Board Members exercise their functions actively, as testified to by the number of and high attendance rate at sessions of the Supervisory Board and separately held sessions of the Supervisory Board Committees in 2024. The competences, qualifications, and professional experience of the Management Board Members and their guarantee of due oversight ensure the due performance of the Supervisory Board’s duties.
• Supervisory Board Members are not involved in social or profit-making activity which could lead to a conflict of interest with respect to PZU’s operations, or adversely affect their reputation as a Supervisory Board Member. The rules for identifying, managing and preventing conflicts of interest concerning PZU Supervisory Board Members have been set out in the Code of Ethics for PZU Supervisory Board Members.
• The PZU Supervisory Board assesses compliance with CGR, and the statement in this regard is included in the PZU Supervisory Board’s annual report, made available at (https://www.pzu.pl/grupapzu/spolki/pzu-sa/zasady-ladu-korporacyjnego).

Material aspects concerning the application of Corporate Governance Rules for Regulated Institutions

• The rules for compensating Management Board and Supervisory Board Members are regulated by the Compensation Policy for Members of the PZU SA Management and Supervisory Boards, adopted by the Shareholder Meeting in 2020. On 7 June 2023, the Ordinary Shareholder Meeting introduced a provision in the Policy stating that the Policy also aims to ensure that sustainability requirements are properly integrated into the risk management process at the PZU Group level.
• The compensation rules for PZU employees are regulated by the PZU Compensation Policy adopted by the PZU Management Board in 2016. The Policy was updated in 2022, in particular, to clarify how the Policy incorporates ESG risks included in the risk management system.
• The Supervisory Board prepared the Report on the Compensation Policy at PZU, which is a part of the Supervisory Board’s Report for 2023, and presented it to the Ordinary Shareholder Meeting on 18 une 2024. The Supervisory Board assessed that the Company had properly carried out the adopted Policy with all compensation rules dedicated to the various groups of people forming the Company. The Shareholder Meeting reviewed and then approved the PZU Supervisory Board’s Report for 2023.
• The compensation of the Supervisory Board Members is determined by the Shareholder Meeting, and the compensation of the Management Board Members – by the Supervisory Board. The PZU Management Board establishes the Compensation Policy for persons who are PZU Group Directors at PZU and at the same time Members of the Management Board at PZU Życie, and the Compensation Policy for senior management and Authorized Persons (as referred to in the Solvency II Delegated Regulation).
• The Compensation Policy is not an incentive to ta e excessive ris within PZU’s operations. The rules governing variable compensation aim to support proper and efficient risk management, discourage excessive risk-ta ing, and assist in the implementation of the PZU Group’s Strategy.
• The variable compensation of the Management Board Members for a given financial year depends on the level of achievement of the management objectives set by the Supervisory Board. In 2024, these included the improvement of economic and financial indicators (gross insurance revenue, financial result attributable to the parent company); preparation of PZU Group’s strategy and ESG objectives in the CSRD area. 40% of the variable compensation is deferred for three consecutive years. A Management Board Member may acquire the right to 1/3 of the deferred compensation provided that during this period no circumstances arise that prove that the conditions for payment of a given portion of variable compensation have not been satisfied. In 2024, the Supervisory Board decided to pay the Deferred Variable Compensation for 2020-2022.
• The compensation of the Management Board Members and persons exercising key positions is financed and paid out from PZU funds.

Material aspects concerning the application of Corporate Governance Rules for Regulated Institutions

• PZU has a transparent information policy that takes into account the needs of investors and clients. The PZU website has a dedicated Investor Relations section aimed at capital market players. Communication with investors is carried out on the basis of the Rules of PZU’s Information Policy towards Capital Mar et Players. The document, which is published on the PZU’s website, includes the scope, manner and timing of disclosures, the principles and tools used in communication with capital market players, and incorporates regulations applicable to the status of a public company. The product section of the website presents, in a simple and accessible way, information on the main features of the products, as well as the General Terms and Conditions of Insurance and information supporting clients in their contact with PZU, including contact details and complaint handling rules.
• Since 2014, PZU has published integrated interactive Annual Reports. They describe the most important events, achievements and plans of the PZU Group, and include tools for a multifaceted analysis of financial results, corporate events and macroeconomic data. The reports include interactive infographics, animations and video clips, which offer a succinct presentation of the PZU Group’s activities.
• PZU provides investors with equal access to information, among other things: it ensures proper execution of information obligations obligatory for listed companies, all materials after being sent to the WSE via the ESPI system are published immediately in Polish and English on the website in the Investor Relations section.
• In addition to periodic reports required by law, PZU prepares quarterly performance presentations, which are published on the Investor Relations section of the website, along with financial data in Excel format and recordings of result conferences. PZU also posts at the website recordings of shareholder meetings and other important corporate events.
• PZU’s information policy with respect to capital mar et players specifies deadlines for responding to questions submitted by e-mail and telephone – PZU makes efforts to respond promptly, in the case of questions submitted by e-mail within a 3 working days.

Material aspects concerning the application of Corporate Governance Rules for Regulated Institutions

• PZU SA has internal regulations which cover, among other things, issues related to ensuring compliance of marketing activities with the law, in particular with the laws on competition and consumer protection and on combating unfair competition. PZU also applies the internal PZU Code of Ethics in Advertising, which is a collection of additional standards, independent of the law and the guidelines of the Financial Supervision Commission.
• The Marketing Department uses the practice of verification of planned marketing messages prior to their publication in terms of their transparency, authenticity and accuracy of information contained therein with other PZU entities. The marketing activities are particularly consulted with the Legal Department and the Compliance Department (for compliance risk, including compliance with the law – ris of misleading the consumer, use of messages infringing the addressees’ interests) and pertinent departments responsible for a given product (consistency of the message with the facts – risk of misleading consumers).
• PZU and PZU Życie apply the “Principles regarding the product management system” defining the ey requirements and activities to be performed at each stage of the product life cycle to ensure that the developed and distributed products meet the needs and requirements of the target client groups. Before they are offered to clients, all of the Group’s services and products are carefully reviewed by experts, including relevant legal and compliance departments, for compliance with regulations and requirements to protect clients’ interests and current case law on consumer rights.
• Before a product is sold, a client is given a so-called Product Information Document, a short document about the product that allows the client to learn about the most important terms of the product. The information on the PZU’s website is similarly structured, with the main features of the product presented in a simple way.
• PZU endeavors to make communication with clients simple and understandable. It makes sure that the content is linguistically correct, well-designed and understandable; that is useful and does not raise any doubts.
• The process and rules for handling complaints, including issues of timeliness and quality of processing of client requests, are defined in PZU’s internal regulations. The rules for handling complaints are available on the PZU website (https://www.pzu.pl/kontakt-i-pomoc/skargi-reklamacje/jakrozpatrujemy-skargi-reklamacje);
• Since 2017, PZU has had a Client Ombudsman, who, among other things, participates in mediations before the Financial Ombudsman and the KNF, and conducts individual meetings and negotiations with clients on disputes. In addition, a Health Ombudsman position was established in 2020; the Health Ombudsman, among other things, conducts individual meetings and negotiations with clients on health insurance disputes.

Material aspects concerning the application of Corporate Governance Rules for Regulated Institutions

• PZU has an internal control system in place, adjusted to the scale of its operations and its organizational structure. It is aimed at ensuring the effectiveness and efficiency of operations, reliable reporting, especially financial reporting, compliance of the company’s operations with laws, internal regulations and standards of conduct, and adherence to risk management rules.
• A Compliance Department has been separated at PZU in terms of organization and competence, which performs tas s in ensuring compliance of the insurance company’s activities with the law and internal regulations;
• An effective internal audit function operates at PZU, which involves a regular and orderly assessment of the adequacy and effectiveness of the internal control system and other components of the management system.
• PZU ensures the objectivity and independence of the internal audit and compliance functions. The Managing Director on Audit, who heads the Internal Audit Department, reports functionally to the Audit Committee of the PZU Supervisory Board and organizationally to the President of the Management Board of PZU (the person delegated to temporarily perform the activities of the President of the PZU Management Board). Appointment and dismissal of a person to head the Internal Audit Department requires the opinion of the Audit Committee of the PZU Supervisory Board. The Managing Director of Regulatory Affairs who oversees the activities of the Compliance Office, reports organizationally to the President of the PZU Management Board (the person delegated to temporarily perform the activities of the President of the PZU Management Board). Appointment and dismissal of a person to head the Compliance Department requires the opinion of the Audit Committee of the PZU Supervisory Board. The Managing Director on Audit and the Managing Director of Regulatory Affairs attend meetings of the Audit Committee of the PZU Supervisory Board and the PZU Management Board, and have the opportunity to report and communicate directly with Members of the Management Board and the Supervisory Board of PZU.
• PZU has an adequate and effective risk management system. The Management Board is responsible for organizing and ensuring the operation of this system. The risk management process also involves committees operating at PZU, which make decisions on limiting the level of individual risks to the framework set by the risk appetite.
• The Audit Committee of the PZU Supervisory Board supervises and monitors the effectiveness of the internal control, internal audit and risk management systems at PZU within the framework of the decisions set forth in the PZU’s Articles of Association and the Rules and Regulations of the PZU Supervisory Board.