French Insurance Code
In forceThe amount of the contribution to the guarantee fund, provided for in I of article L. 421-10-1, is determined in accordance with the following formula, for an accounting year i :
CFi = max [0; T% x (Mi -Pi)] + max [0; (P%xCi) x CAi/CA]
Where:
1° For the first part, which is based on the difference between the premiums for the last ten financial years and the technical provisions for the last financial year, and for an accounting year i :
a) "Mi" is calculated according to the following formula:
You can consult the full text with its images from the extract of the authenticated electronic Official Journal No. 150 of 1 July 2018, text No. 7, accessible at the following address: https: //www.legifrance.gouv.fr/jo_pdf.do?id=JORFTEXT000037132333
Where:
- "K" is the year difference between the financial year under review and the financial year in which the building sites were opened, in ranks 0 to 10, with 0 corresponding to the inventory year i;
-" Pi-k" is the amount of premiums written and premiums remaining to be written in respect of damage to structures, compulsory under article L. 242-1, including ancillary cover, and relating to the financial year in which the building site was opened in year i-k, net of premiums to be cancelled and acquisition costs which may be taken into account up to a limit of 15% of premiums;
-" Bk" represents the annual coefficient referred to in 1° of I of Article L. 421-10-1, to be applied in accordance with the following table:
k | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
|---|---|---|---|---|---|---|---|---|---|---|---|
Bk | 1 | 1 | 0,95 | 0,85 | 0,75 | 0,65 | 0,55 | 0,45 | 0,35 | 0,25 | 0,20 |
b) "Pi" corresponds to the total amount of technical provisions booked for all damage to works guarantees, which are compulsory under article L. 242-1, including ancillary guarantees. These provisions are gross of reinsurance and net of recoveries, and include claims handling expenses and provisions set aside for claims not yet reported;
c) "T%" represents the rate applicable to this difference, referred to in 1° of I of Article L. 421-10-1;
2° For the second part, which depends on the financing requirements of the section of the guarantee fund dedicated to its intervention in the event of the withdrawal of authorisation of an insurance undertaking covering, in the territory of the French Republic, risks covered by compulsory insurance pursuant to Article L. 242-1, and for an inventory year i:
a) "Ci" represents the total expenses for the last financial year of the section "Operations of the guarantee fund resulting from the withdrawal of authorisation for construction insurance companies";
b) "P%" represents the percentage referred to in 2° of I of Article L. 421-10-1;
c) "CAi/CA" corresponds to the proportion of the insurance undertaking's turnover relating to compulsory works damage cover under Article L. 242-1, including ancillary cover, generated in the territory of the French Republic.
