Company: BBD
Filing Date: 2025-03-31
Form Type: 20-F
Source: 0001292814-25-001244
Chunk: 445

Company: BANK BRADESCO
Filing Date: 2025-03-31
Form: 20-F
Item: Item 19
Chunk 445
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 31, 2024 made in the prior year with actual taxable profits
in 2024.

Measurement of certain liabilities from insurance contracts issued
under the general measurement and the variable fee approach model

As disclosed in Notes 2l, 4 and 21 to the consolidated financial statements,
the Bank has R$ 359,997,742 thousand of insurance liabilities measured under the general measurement model (GMM/BA) and the variable fee
approach (VFA) as of December 31, 2024. These insurance liabilities are measured as the sum of the fulfillment cash flows and, when applicable,
the contractual service margin. The fulfillment cash flows comprise an estimate of the expected cash flows that will arise within the
boundaries of the insurance contract, including for the payment of claims and benefits, adjusted for the time value of money and an explicit
risk adjustment related to the non-financial risk. Insurance liabilities are the output of a complex set of models. The estimation of
the fulfillment cash flows are determined using models and actuarial methodologies which requires assumptions including those related
to income conversion rates for annuity contracts, longevity, loss ratios, discount rates and the non-financial risk adjustments.

We identified the evaluation of the measurement of insurance liabilities
measured under the general measurement model (GMM/BA) and the variable fee approach (VFA) as a critical audit matter. Complex auditor
judgment was required to evaluate the measurement of these insurance liabilities as they involve significant measurement uncertainties
as a result of the complexity of the models and actuarial methodologies, specifically those used to determine income conversion rates
for annuity contracts, longevity, loss ratios, discount rates and the non-financial risk adjustments. Minor changes in these assumptions
could result in significant changes in the measurement of these insurance liabilities. In addition, the audit effort associated with the
evaluation of the measurement of these insurance liabilities required the involvement of professionals with specialized skills and knowledge
of actuarial science.

The following are the primary procedures we performed to address this
critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the measurement
of insurance liabilities measured under the general measurement model (GMM/BA) and the variable fee approach (VFA). This included controls
related to the development and approval of the models and methodologies for determining discount rates, non-financial risk adjustments,
income conversion rates for annuity contracts, longevity and loss ratios. We involved professionals with specialized skills and knowledge
of