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The licensing of direct insurance institutions is governed by three principles: speciality, specialisation, licensing by class
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The licensing of direct insurance institutions is governed by three principles:
- The principle of speciality: an insurance institution may only carry on those activities for which it is licensed. However, it may, under certain conditions, be authorised to present guarantees on behalf of other licensed institutions with which it has entered into an agreement to that effect.
- Principle of specialisation: institutions are licensed to conduct business exclusively in life insurance or non-life insurance. However, this principle may be softened to cover all personal risks. Institutions licensed for life insurance may also be licensed to cover sickness and accident risks.
- Principle of licensing by class: classes are defined at European Union level. The are 18 European Union non-life classes and 6 life insurance classes in France, plus the special class of tontines (covered solely by the Insurance Code). Insurance undertakings are authorised to conduct business in all these classes; the scope is narrower for mutual insurers and provident institutions.
N.B. The principle of specialisation is softened for French institutions engaged solely in reinsurance: a reinsurance institution may be licensed in life or non-life insurance for all classes (Article L.321-1-1 of the Insurance Code; Article L.211-8-1 of the Mutual Insurance Code; Article L.931-4-1 of the Social Security Code).
Reference texts :
| Provisions | Insurance Code | Mutual Insurance Code | Social Security Code |
|---|---|---|---|
| Principle of speciality and possibility of marketing agreement | L 321-1 R 322-2 | L 211-8 L 116-1 | L 931-4 R 931-1-1 |
| Principle of specialisation | L 321-1 | L 211-8 R 211-4 | L 931-4 |
| Licensing by class or sub-class | R 321-14 | R 211-3 | R 931-2-2 |
| List of insurance classes | R 321-1 | R 211-2 | R 931-2-1 |
Updated on: 06/07/2018 15:12