SGAM, SGAPS and UMG affiliation

Overview, regulatory references and authorisation procedure, content of the notification pack, issuance of authorisations, transitional arrangements

Overview of the structure of non-ownership-based group structures

Non-ownership-based groups may result from insurance undertakings establishing strong and sustainable financial relations under a structure which, through centralised coordination, exercises a dominant influence over their decisions, including financial decisions.

Group mutual insurance companies (SGAM), mutual insurance union groups (UMG) and group social protection insurance companies (SGAPS) are mainly formed with the goal of managing strong and lasting financial links between their members, documented in their articles of incorporation and formalised in an affiliation agreement. The transposition into French law of the Solvency II directive strengthened the powers that such structures must exercise over their members.

SGAM, UMG and SGAPS must have powers of supervision and sanction over their members. These powers must be documented in the articles of incorporation. However, transitional measures apply to structures established before 2 April 2015, when the transposing ordinance was published (see below).

In particular, mutual insurers and unions of mutual insurers, provident institutions and unions of provident institutions and mutual insurance companies may join such groups provided that their articles of incorporation expressly allow for such a possibility and that they are not already a member of another SGAM, SGAPS or UGM.

There are also mutual insurance groups (GAM), unions of mutual groups (UGM) and social protection insurance groups (GAPS) that exist to facilitate and develop the activities of their members. Such structures are not subject to these stricter requirements and are not classed as prudential group structures. In particular, they are not allowed to establish strong and lasting financial links or to exert a dominant influence over their members.

Regulatory references and authorisation procedure

Prudential groups are defined in the fifth paragraph of Article L.356-1 of the Insurance Code, applicable to undertakings and groups covered by each of the three codes, which transposes Article 212 of Directive 2009/138/EC, known as “Solvency II”.

They are subject to the provisions of Chapter VI, Title V, Book III of the Insurance Code, applicable to groups covered by each of the three codes, and which transpose Title III of the Directive.

Insurance Code
Social Security Code
Mutual Insurance Code
DefinitionL. 322-1-2
L. 322-1-3
L. 931-2-2

L. 111-4-2

Reporting of affiliations and withdrawalsL. 322-1-4
R. 322-161
L. 931-2-2
R. 931-1-16
L. 111-4-2
R. 115-2
Application contentInstruction 2018-I-15 and its annex

The signing of an affiliation agreement with an SGAM, a SGAPS or a UMG, or the termination of such an agreement (including where expelled by the group), must be notified in advance to the ACPR, which may object if the proposed move appears to be contrary to policyholders’ interests.

Content of the notification pack

The minimum content of the pack notifying the ACPR that an affiliation agreement has been entered into or terminated is laid down in the ACPR instruction referred to above.

In summary, the pack must contain the following:

  • administrative information on the undertakings applying for or terminating membership of the group, including articles of incorporation
  • administrative information on the SGAM, SGAPS or UMG, including a list of members and actual or draft articles of incorporation
  • decisions by the bodies that approved membership or termination thereof
  • information on membership or termination thereof, including the affiliation agreement
  • consequences of membership/termination on the prudential situation of the undertakings and the group, including forecast financial position, identification of intragroup transactions and other risks
  • other consequences of membership/termination (commercial, operational, etc.)

Issuance of authorisations

Packs should be sent by post to the following address, as well as by e-mail to the supervisory unit responsible for the group:

Secrétariat général de l’Autorité de contrôle prudentiel et de la résolution
Direction des Agréments, des Autorisations et de la Réglementation
Service des Organismes d’Assurance
61 Rue Taitbout
75436 Paris Cedex 09

The ACPR has a maximum of three months from receipt of the completed pack to object to the membership or termination.

Transitional arrangements for pre-existing structures

SGAM and UMG established prior to the publication of the ordinance on 2 April 2015 are granted a transitional period to comply with the new provisions on SGAM and UMG (or to convert into another type of structure such as a GAM or UGM). This period runs until 31 December 2017. Amendments to articles of incorporation and affiliation agreements in order to comply with these provisions do not require ACPR authorisation. Conversion into a GAM or UGM requires the termination of existing affiliation agreements, which is subject to ACPR authorisation.

SGAM, SGAPS and UMG established after publication of the ordinance on 2 April 2015 must immediately comply with the new provisions.

Provident groups (GPPs) established before 31 December 2015 are granted a transitional period to convert into SGAPS and comply with the applicable provisions (or convert into GAPS). This period runs until 31 December 2017. The conversion of a GPP into an SGAPS requires members of the GPP to become members of the SGAPS, which is subject to ACPR authorisation. The conversion of a GPP into a GAPS does not require ACPR authorisation.

Points of attention

The SGAM, SGAPS or UMG articles of incorporation and the affiliation agreements shall specify in particular (this list is not exhaustive):

  • the terms of centralized coordination or integration at group level, in particular with regard to risk management and other key activities;
  • the terms of exercise of dominant influence, including identifying strategic and financial decisions of the subsidiaries that require prior approval of the SGAM, SGAPS or UMG and the group's supervisory powers, in particular the prevention or enforcement of financial solidarity mechanisms. These arrangements may include sanctioning powers;
  • the financial solidarity mechanism, identifying its trigger conditions and also the tools that can be deployed. In particular, to demonstrate the effectiveness of this mechanism, groups should specify its trigger time, ensure its automaticity and show how it can restore in all cases the solvency of the member in trouble. Furthermore, any limitations on the transferability of own funds restrict their eligibility for the calculation of the group solvency.

The accumulation by the same person of the liability of a key function for various group entities is possible to enable better integration of group’s governance. Nevertheless, the group should ensure that the cumulative burden on one person is not excessive and does not lead to excessively reduce the attention paid to a small or specific risk profile body.


Last update : March 22nd 2016

Updated on: 02/01/2019 12:39