The FGAP is mobilised, under certain conditions provided for in the French Insurance Code, in the event of the failure of life and health insurance companies authorised in France under the French Insurance Code (Articles L. 423-1 to L 423-8 of the French Insurance Code). It ensures the compensation of policyholders, underwriters, members and beneficiaries who have subscribed insurance contracts hedging the following risks: Accidents (class 1), Sickness (class 2), Life-death, capitalisation (and all transactions falling within classes 20 to 26).
The decision to resort to the FGAP in the event of the failure of an insurance company falls within the competence of the ACPR, after written consultation of the fund.
Where possible, the claim for compensation shall be addressed to the FGAP by the liquidator. The amount of compensation guaranteed by the fund shall be calculated for each policyholder, underwriter, member or beneficiary for all insurance contracts related to the defaulting company, up to EUR 70,000. This cap will be increased up to EUR 90,000 for disability or invalidity annuities and the death benefits resulting from life insurance policies (Article R. 423-7 of the French Insurance Code).
FGAP and European passport
The FGAP is not mobilised in the event of the failure of “incoming” insurance companies operating in France under the freedom to provide services or the freedom of establishment (FoS/FE), but the regulation does not exclude the coverage of companies authorised in France, exercising under FoS/FE within the European Union or of the European Economic Area (“outgoing”).
For more information, including the fund's mobilisation conditions, see the FGAP website: http://www.fgap.fr/