French Insurance Code
In forceI.-Reinsurance is the activity of an undertaking, other than a securitisation vehicle referred to in Article L. 310-1-2, which consists of accepting risks ceded either by an insurance undertaking, another reinsurance undertaking or a supplementary professional retirement fund, or by mutual insurers, their unions or a supplementary professional retirement insurer or union, governed by Book II of the Mutual Code, or by provident institutions, their unions or a supplementary professional retirement insurer or union, governed by Title 3 of Book 9 of the Social Security Code, or by any member of the association of underwriters known as "Lloyd's".
Limited financial reinsurance (known as "finite reinsurance") refers to reinsurance under which the reinsurer's maximum potential loss, resulting from a significant transfer of both underwriting risks and payment maturity risks, exceeds, by a significant but limited amount, the premiums due by the ceding company over the entire term of the contract. This reinsurance also has at least one of the following two characteristics:
1° It explicitly takes into account the time value of money ;
2° It provides for contractual sharing which aims to smooth the economic impact of the reinsured risk over time in order to achieve a specified level of risk transfer.
II - Undertakings carrying on reinsurance business and having their registered office in France are subject to State supervision.
III - In addition to the undertakings mentioned in Article L. 310-2, the following undertakings not engaged in direct insurance are authorised to carry on reinsurance business in France:
1° Reinsurance undertakings having their registered office in France and authorised under the conditions defined in Article L. 321-1-1 ;
2° Under the conditions laid down in Title VI of this Book, undertakings having their registered office in another Member State of the European Community or in another State party to the Agreement on the European Economic Area and carrying on this business either from their registered office or from their branches duly established in the territory of a Member State of the European Community or of another State party to the Agreement on the European Economic Area;
3° Companies whose registered office is in a State that is not a party to the Agreement on the European Economic Area, in the cases and under the conditions laid down by decree of the Conseil d'Etat. These conditions may include the obligation for these undertakings to guarantee their commitments to reinsured insurance undertakings authorised in France.
