French Insurance Code
In forceI.-Approved mutual insurance companies and agricultural mutual insurance and reinsurance funds, which have drawn up duly approved accounts for the last two financial years, may issue bonds, profit participation certificates and subordinated securities under the conditions provided for by articles L. 228-1, L. 228-5, L. 228-36 to L. 228-90 and L. 228-97 of the French Commercial Code, and subject to the penalties provided for by articles L. 242-10 and L. 242-30 of said Code and, in the case of bonds, by articles L. 245-8 to L. 245-12 (1° to 5°) and L. 245-13 to L. 245-17 of said Code. The issue may be made by public offering.
For the purposes of law no. 66-537 of 24 July 1966, the term "shareholders" refers to "members". The sanctions relating to the board of directors, management board or manager of a company provided for by the provisions mentioned in the previous paragraph apply to persons or bodies responsible for administration or management in accordance with the articles of association.
Prior to the issue of bonds, redeemable shares or subordinated debt securities, any company or fund concerned must be entered in the Trade and Companies Register.
II - Notwithstanding Article L. 228-41 of the aforementioned Code, the General Meeting of members alone is authorised to determine the essential characteristics of the issue of bonds, profit participation certificates or subordinated securities. However, it may delegate to the Board of Directors or the Management Board, within the framework thus defined, the powers necessary to determine the practical details. The Board of Directors or the Management Board shall report to the next General Meeting on the exercise of this delegation. Under no circumstances may the purpose of issue contracts be to give preferential treatment to a category of members, persons who are linked to the company by an employment contract, de jure or de facto directors of the company or any other person. Contracts entered into in breach of this provision are absolutely null and void.
III -As regards the remuneration of redeemable shares, the variable portion may not be calculated by reference to a criterion representative of the volume of business of the issuing company.
IV - A decree of the Conseil d'Etat will set out the terms and conditions for the application of this article, in particular the control exercised by the Autorité de contrôle prudentiel et de résolution over these issues.
