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Change in share ownership structure

Prior ACPR authorisation for acquisitions and increases in ownership and prior ACPR notification of disposals of ownership interests

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In accordance with Article L.322-4 of the Insurance Code, acquisitions, disposals, and increases or decreases in ownership of an insurance or reinsurance undertaking, group insurance company or licensed mixed financial holding company having its registered office in France are subject to two different regimes.

  • Prior ACPR authorisation for acquisitions and increases in ownership (Article R.322-11-1 and 2 of the Insurance Code)

Any transaction enabling a person, acting alone or in concert with other persons, as defined in Article L.233-10 of the Commercial Code, to acquire or increase its ownership of one of the enterprises referred to above requires prior authorisation from the ACPR:

  • where such transaction results in the proportion of voting rights held by that person or those persons rising above one-tenth, one-fifth, one-third or one-half of all voting rights;
  • where the insurance or reinsurance undertaking becomes a subsidiary of that person or those persons.

The ACPR undertakes a prudential review of the transaction.

Assessment criteria

In accordance with paragraph III, Article R.322-11-2 of the Insurance Code, the ACPR assesses each of the following criteria:

  • The reputation of the acquiring party.
  • The reputation and experience of any person who, following the planned transaction, will oversee the undertaking’s activities.
  • The financial strength of the proposed acquiring party, in view of the types of activities undertaken and planned within the undertaking that is the subject of the proposed transaction.
  • The undertaking’s ability to fulfil and continue to fulfil the provisions of the Insurance Code, in particular with regard to its effective supervision following the transaction. The ACPR assesses the institution’s ability to meet prudential requirements, and in particular whether the structure of the group to which it will belong enables it to exercise effective supervision, genuinely exchange information with the competent authorities and determine how responsibilities are shared between the competent authorities.
  • The existence of reasonable grounds for suspecting that attempted money laundering is in progress or has been undertaken in relation to the planned acquisition, or that the planned acquisition could increase the risk thereof.
Procedure

In the event of a request for prior authorisation, as a shareholder or future shareholder, you will need to:

  • make contact with the Licensing, Authorisation and Regulation Directorate to submit your plans and review the provisional implementation timetable;
  • complete the corresponding application and submit it to the Secretariat together with all supporting documentation.

In accordance with Article R.322-11-2 of the Insurance Code, the ACPR will acknowledge receipt in writing within two business days of receiving notification of an acquisition of or increase in an ownership interest.

The ACPR has 60 business days from the date on which it acknowledges receipt of the notification to complete its assessment.

During the assessment period, and no later than the 50th business day of the assessment period, the ACPR may ask the acquiring party for additional information.

In such cases, the assessment period is suspended until such time as the additional information is received. This suspension period may not usually exceed 20 business days. It may, however, be extended to 30 business days where the acquiring party is not from the European Economic Area or is not subject to harmonised monitoring under the relevant European Union directives (“unregulated purchaser”).

  • Prior ACPR notification of disposals of ownership interests (Article R.322-11-3 of the Insurance Code)

The ACPR must be notified in advance of any transaction enabling a person, acting alone or in concert with other persons, as defined in Article L.233-10 of the Commercial Code, to dispose of or reduce its ownership of one of the enterprises referred to above:

  • where such transaction results in the proportion of voting rights held by that person or those persons falling below one-tenth, one-fifth, one-third or one-half of all voting rights;
  • where the insurance or reinsurance undertaking ceases to be a subsidiary of that person or those persons.

The ACPR checks that the transaction does not call into the question the conditions to which the license is subject.
The transactions referred to above (which are subject to prior authorisation or notification) need only be immediately notified to the ACPR when they are entered into between persons governed by the law of a European Union Member State and belonging to the group of those already holding effective supervisory power over the target undertaking (financial restructuring within the same group).

Procedure

In the case of advance notification, the shareholder must write to the Licensing, Authorisation and Regulation Directorate indicating the precise terms of the transaction undertaken.
In accordance with Article R.322-11-3 of the Insurance Code, the ACPR will acknowledge receipt in writing within two business days of receiving notification of a disposal of or reduction in an ownership interest.
The ACPR has 60 business days from the date on which it acknowledges receipt of the notification to notify the reporting entity and the undertaking that is the target of the planned transaction of any decision to refuse authorisation.

Updated on: 06/12/2018 10:25