French Insurance Code
In forceI.-The supervisory board and the members mentioned in 1° and 2° of I of Article L. 612-8-1 of the Monetary and Financial Code may refer the situation of a person mentioned in Article L. 311-1 to the resolution board of the Autorité de contrôle prudentiel et de résolution with a view to implementing one or more resolution measures. However, in the case provided for in 6° of II of this article, only the member of the resolution college mentioned in 2° of I of the aforementioned Article L. 612-8-1 may refer the matter to the resolution college.
The persons exercising effective management within the meaning of Articles L. 322-3-2 of this Code, L. 211-13 of the Mutual Code and L. 931-7-1 of the Social Security Code, the Board of Directors or the Supervisory Board shall refer the matter to the Supervisory Board without delay if they consider that the failure of the person mentioned in the first paragraph is proven or foreseeable within the meaning of II. The supervisory board will inform the resolution board and inform it of any measures taken with regard to this person.
II.The failure of a person referred to in Article L. 311-1 is proven or foreseeable if that person meets one of the following conditions:
1° It is likely to no longer comply with the conditions for its authorisation set out in Articles L. 321-10, L. 321-1-1 or L. 382-2 of this Code, L. 211-8, L. 211-8-1 or L. 214-7 of the Mutual Code and L. 931-4, L. 931-4-1 or L. 942-7 of the Social Security Code;
2° If, at the end of the period referred to in Article L. 352-7, the Autorité de contrôle prudentiel et de résolution considers that the implementation of the recovery plan provided for in that same article has not enabled significant progress to be made in restoring the level of eligible own funds corresponding to the Solvency Capital Requirement referred to in Articles L. 352-1 and L. 356-15 or in reducing the risk profile in order to guarantee coverage of the Solvency Capital Requirement;
3° For the supplementary occupational pension funds mentioned in Article L. 381-1 of this Code, the supplementary occupational pension mutuals and unions mentioned inArticle L. 214-1 du code de la mutualité et les institutions de retraite professionnelle supplémentaire mentionnées à l'article L. 942-1 du code de la sécurité sociale, si l'Autorité de contrôle prudentiel et de résolution estime que la mise en place du plan de convergence mentionné à l'article L. 385-8 du présent code n'a pas permis, dans un délai cohérent avec l'horizon des mesures prévues par ce plan, d'enregistrer des progrès significatifs pour couvrir l'exigence de marge de solvabilité;
4° Pour les groupes mentionnés aux deuxième et troisième alinéas de l'article L. 356-2, if the group no longer covers the group's minimum solvency capital requirement on a consolidated basis;
5° A person referred to in Article L. 311-1 is likely to be unable to pay its debts, other than the commitments it has entered into with respect to its policyholders, subscribers, participating members or beneficiaries, or its other commitments when they fall due;
6° Exceptional support is likely to be required from the public authorities.
III.In cases where a matter is referred to it pursuant to I, the resolution college may only take a resolution measure if all of the following conditions are met:
1° The supervisory college or the resolution college, when a matter is referred to it by the members mentioned in 1° and 2° of I of Article L. 612-8-1 of the Monetary and Financial Code and after receiving the assent of the supervisory board, has established that the failure of a person referred to in Article L. 311-1 is proven or foreseeable within the meaning of II;
2° This failure cannot be avoided, within a reasonable timeframe, other than by implementing a resolution measure;
3° A resolution measure is necessary with regard to the objectives of the resolution mentioned in I of Article L. 311-22, and where the compulsory liquidation procedure provided for in Chapter VI of Title II of Book III of this Code, in Section 3 of Chapter II of Title I of Book II of the Mutual Code and in Section 5 of Chapter I of Title III of Book IX of the Social Security Code, would not enable these objectives to be achieved to the same extent;
4° The value of the assets of the person concerned, valued in accordance with Article L. 351-1, is greater than the value of its liabilities valued in accordance with the procedures provided for in the same Article.
The adoption of the measures mentioned in Article L. 311-14 is not a prerequisite for the adoption of a resolution measure.
When the resolution college finds that the conditions mentioned in 1° to 4° have been met, the person concerned is considered to be subject to a resolution procedure. This decision is taken after an adversarial procedure, the total time of which may be reduced to 48 hours if it appears that a longer period would be likely to impede the resolution measures that the resolution board intends to take.
Where this is justified by particularly urgent circumstances and where the conditions mentioned in 1° to 4° are met, the resolution board may, on a provisional basis, order the precautionary measures mentioned in Articles L. 311-30 and L. 311-31 without an adversarial procedure. An adversarial procedure is then immediately initiated with a view to lifting, adapting or confirming these precautionary measures.
IV.When the collège de résolution or, where applicable, the collège de supervision finds that the conditions mentioned in 1° and 2° of III have been met, it shall inform the following without delay:
1° The Minister responsible for the economy and, where applicable, the Minister responsible for mutual societies or the Minister responsible for social security;
2° The supervisory board or, where applicable, the resolution board;
3° The guarantee fund for compulsory non-life insurance, the guarantee fund for policyholders against the failure of personal insurance companies, the guarantee fund against the failure of mutual societies and unions carrying on insurance business or the joint guarantee fund for provident institutions;
4° Where applicable, the competent authorities of the Member States of the European Union or parties to the European Economic Area in which the person has duly established a branch, as well as the resolution authorities of these States;
5° Where applicable, the competent authorities of other Member States of the European Union or parties to the European Economic Area and the competent authorities of other States, under the conditions set out in Article L. 311-57.
