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Supervising the insurance sector

The ACPR is responsible for prudential supervision of the insurance sector

The ACPR looks after prudential supervision of the French insurance sector, which commands a substantial share of assets at both European and international levels (see box above). The ACPR issues the licences and authorisations required by law and performs ongoing monitoring of the financial position and operating conditions of insurance entities, to ensure that they are able at all times to honour their commitments to policyholders, members and beneficiaries.


Prudential supervision is conducted through ongoing supervision by staff who specialise in the insurance sector and have all the requisite skills, including financial, legal and risk modelling expertise. Ongoing supervision comprises documentary audits based on information provided by reporting entities and on-site inspections, in which teams of inspectors carry out investigations on insurers’ premises.

A view to preserving financial stability

France has a number of major bancassurance groups that combine banking and insurance businesses under one roof. This leads to risks that are specific to each area but also to risks linked to potential spillover between the two sectors (reputational risk being an example). To better identify these risks, the ACPR has an inspection team that deals specifically with the insurance subsidiaries of bancassurance groups. The team benefits from the ACPR’s dual powers in the areas of banking and insurance.


Insurance supervision also draws on research done within the Financial Stability Unit (see 1.3, above). This research makes it possible to obtain individual comparisons that are useful to day-to-day prudential supervision, and to analyse sector and macroeconomic risks.


The ACPR therefore carries out its financial stability responsibilities by examining the risks that could affect all or a large section of the insurance sector. In recent times, the impact of low interest rates on life insurers, for example, has been a source of constant attention, both at national level and within Europe as part of stress tests conducted by EIOPA.


This situation prompted the ACPR to lend its weight to efforts by the public authorities to provide the HCSF with the macroprudential powers to take precautionary and preventive measures in response to interest rate developments. These actions require a link to be made between the overall, cross-cutting vision of the financial system and individual consequences. The ability to make this link lies at the heart of the powers assigned to the ACPR.


Significant resolution powers in the insurance sector

In 2016, France’s lawmakers further strengthened the powers and tasks of the ACPR, notably by adding a resolution component to its insurance responsibilities, so expanding the ACPR’s powers to prevent and deal with difficulties. This was a first for Europe in this sector and highlights the legislature’s confidence in the ACPR’s ability to carry out new types of tasks in the areas under its purview.


In fact, it was the Sapin 2 Act No. 2016-1691 on Transparency, Prevention of Corruption and Economic Modernisation that added to the ACPR’s assignments by providing for the creation of a resolution regime in the insurance sector. Specifically, Article 47 V of the Act authorised the government to expand the powers of the ACPR to prevent and deal with difficulties experienced by insurance entities. By being named as the resolution authority for the insurance sector, the ACPR was thus entrusted with the new task of handling the recovery or resolution of insurance entities.

Involved in developing the regulatory framework and international cooperation

The ACPR is responsible for supervising the insurance sector at a time when the international and European frameworks have taken on particular importance. Prudential rules are being gradually harmonised internationally through the International Association of Insurance Supervisors (IAIS) and also within the European Union through EIOPA. The ACPR is playing its part in this process.


The ACPR represents France within IAIS and contributes actively to work on strengthening international prudential regulation. Efforts are being focused particularly on preparing an international capital standard (ICS) for internationally active insurance groups and, under a mandate from the FSB, on identifying systemically important insurers.


Within Europe, the ACPR represents France in EIOPA and contributes extensively to its work. EIOPA is responsible for harmonising prudential rules in the insurance sector, taking care of coordination between national supervisory authorities and playing a mediation role. It also performs consumer protection functions.


The ACPR played an especially active role within EIOPA in establishing the new Solvency II framework. It drew up instructions and published specific notices to bring France’s prudential framework into compliance with EIOPA’s Solvency II guidelines. The ACPR also participated in tracking consumer protection issues.


In total, ACPR personnel are involved in about 70 international working groups.


Updated on: 06/12/2018 10:24