Guarantee funds for insurance undertaking failures

Summary

General

The FGAP intervenes, under certain conditions set out in the Insurance Code, in the event of default by life and health insurance companies authorised in France and submit to the Insurance Code (articles L. 423-1 to L. 423-8 of the French Insurance Code). This fund provides compensation to policyholders, subscribers and beneficiaries who have subscribed insurance policies with these companies. These policies cover the risks of accident (class 1), sickness (class 2), life and capital death (and all operations falling under classes I to IX).

The decision to request the intervention of the FGAP in case of an insurance company's default is up to the ACPR, after a written consultation of the fund.

The liquidator will submit a claim for compensation to the FGAP wherever possible. The compensation guaranteed by the fund is calculated for each policyholder, subscriber or beneficiary for all their insurance contracts with the defaulting company, up to a maximum of 70 000 euros. The cap is increased to 90 000 euros for disability annuities and annuities resulting from death insurance contracts (article R. 423-7 of the French Insurance Code).

FGAP and European passport

The FGAP does not intervene in the event of the failure of non-french life and health insurance companies operating in France under the freedom to provide services or the freedom of establishment (FoS/FoE). However, the legal texts do not exclude of the FGAP scope the activities of undertakings authorized in France, operating under the FoS/FoE within the European Union or the European Economic Area.

For more information, particularly on the terms and conditions of the fund, please visit the FGAP website.

General

The FGAO is in charge, under certain conditions set out in the Insurance Code, of protecting insurance subscribers, members or beneficiaries of insurance contracts whose subscription is made compulsory by a legislative or regulatory provision, against the consequences of the withdrawal of authorization (before the 1st of July 2018, the legal texts did not refer to the notion of ‘withdrawal of authorization’ but refer to the notion of ‘default’) of insurance companies submit to the Insurance Code (article L. 421-9 of the French Insurance Code). The FGAO is thus involved in motor third-party liability insurance (covered by article L. 211-1 of the French Insurance Code) and construction damage insurance (covered by article L. 242-1 of the same code).

The decision to request the intervention of the FGAO in case of an insurance company's authorisation withdrawal is up to the ACPR, after a written consultation of the fund.

Please be advised that the guarantee fund's coverage is limited to the terms and conditions outlined in the contract. The claims covered must occur within the period of contract validity and no later than noon on the fortieth day following the withdrawal of the insurer's authorisation. The claims must be reported by the insured individual or be the object of an initial claim by a third party victim. It must have taken place in France or in the territory of a state referred to in Article L. 211-4 of the French Insurance Code with the exception of France. Finally, it should have been caused by vehicles and their trailers and semi-trailers, which were normally based in France. Please refer to Article L.421-9 I, paragraph 2 of the French Insurance Code for further information.

FGAO et European passport

Since 1 July 2018, the FGAO can only intervened in the event of the authorisation withdrawal of an insurance undertaking operating on the French territory.

Thus, the FGAO may intervene in the event of an authorisation withdrawal of an insurance undertaking operating in FoS/FoE on the territory of the French Republic in the motor third-party liability or construction damage insurance sectors. Therefore, companies operating in FoS/FoE on the French territory in these sectors must contribute to this fund for policies taken out or renewed from 1 July 2018.

However, the FGAO is unable to provide coverage in the event of an authorisation withdrawal of a French insurance undertaking operating tn FoS/FoE in the motor third-party liability or construction damage insurance sectors within the European Union or the European Economic Area.

For more information, in particular on the conditions for intervention by the fund, please visit the FGAO website.

General

Since the 1^st of July 2018, the purpose of the FGAPDS has been to compensate, under certain conditions set out in the Insurance Code, the beneficiaries of policies taken out by self-employed healthcare professionals in the event of an authorisation withdrawal of  an insurance undertaking operating in the medical liability sector, pursuant to Article L.426-1 II of the French Insurance Code.

The FGAPDS provides coverage for claims that meet the following criteria:

• Claims that arise in France and deal with damages of a significant nature, as outlined in Article L. 1142-1 of the Public Health Code.

• Claims that fall under the scope of the contract, where the adverse event transpired during the contract's effective period or prior to this period, and no later than noon on the fortieth day following the decision to withdraw the insurer's authorization.

• Claims that are submitted within the timeframe stipulated in Article L. 251-2, not later than ten years after the fortieth day following the decision to withdraw the authorisation. Insurance contracts mentioned in sections 1 to 4 of Article L. 421-9 are not eligible for compensation.

FGAPDS et European passport

In the event of an authorisation withdrawal for insurance companies operating in France, the FGAPDS is able to intervene. Thus, insurance companies operating in FoS/FoE in the French medical liability sector are eligible for FGAPDS protection. Therefore, these companies are required to join this fund.

However, in the event of an authorisation withdrawal, the FGAPDS cannot cover activities carried out by French insurance undertakings operating in FoS/FoE in the medical liability sector within the European Union or the European Economic Area.

Should you require further information, please visit the « Caisse centrale de réassurance » website.

General

Should provident Institutions and their unions, as governed by the Social Security Code and engaged in insurance operations, default, the FPGIP may intervene to ensure the rights to benefits of the participating members and beneficiaries of their operations are covered. The terms and conditions of the FPGIP's intervention are set out in the fund's regulations (articles L. 931-38 of the Social Security Code and 5 of the FPGIP's regulations).

The decision to use the FPGIP in the event of default by a provident institution or union is up to ACPR, after a written consultation of the fund.

The liquidator will submit a claim for compensation to the FPGIP wherever possible. The compensation guaranteed by the fund is calculated for each participant, member, subscriber or beneficiary for all their membership forms or contracts, with the defaulting provident institution or union, up to a maximum of 70 000 euros. The cap is increased to 90 000 euros for annuities due to incapacity or disability, annuities for incapacity to drive, annuities providing cover for the risk of dependency and annuities resulting from membership forms or contracts in the event of death or in the event of life (article 6 of the FPGIP regulations).

For more information, particularly on the terms and conditions of the fund, please visit the FPGIP website.

FPGIP et European passport

The FPGIP does not intervene in the event of the failure of European insurance companies operating in France under the FoS/FoE regime.

However, the legal texts do not prevent the fund interventio in case of failure of French provident institutions or French union of provident institutions operating under the FoS/FoE regime in the European Union or the European Economic Area.

General

The articles L. 431-1 and the following ones of the French Mutual Code define a framework for the intervention of this fund. Indeed, it is designed to intervene in case of default by mutual insurers or their unions. The purpose of the fund is to protect the rights of their participating and honorary members, their beneficiaries and the beneficiaries of benefits.

However, the establishment of this fund depend on the drafting of statutes and internal regulations, which are currently in development.