French Insurance Code
In forceInsurance and reinsurance undertakings shall immediately inform the Autorité de contrôle prudentiel et de résolution if they become aware that the Solvency Capital Requirement no longer complies with the provisions of Article L. 352-1 or that there is a risk that it will no longer do so within the next three months.
They submit a realistic recovery plan to the Autorité de contrôle prudentiel et de résolution for approval within two months of establishing that the Solvency Capital Requirement has not been met.
Where a recovery plan has been submitted to the Autorité de contrôle prudentiel et de résolution for approval, the latter shall refrain from issuing the certificate referred to in the third paragraph of Article L. 324-1 or in the first paragraph of Article L. 324-1-2, for as long as it considers that the rights of policyholders and beneficiaries of insurance contracts or the contractual obligations of reinsurance undertakings are threatened.
The Autorité de contrôle prudentiel et de résolution shall require the undertaking concerned to take the necessary measures to re-establish, within six months of the failure to cover the Solvency Capital Requirement being identified, the level of eligible own funds covering the Solvency Capital Requirement or to reduce its risk profile in order to guarantee coverage of the Solvency Capital Requirement. The authority may, if necessary, extend this period by a further three months.
The Autorité de contrôle prudentiel et de résolution may ask the European Insurance and Occupational Pensions Authority to declare the existence of an exceptional unfavourable situation affecting insurance or reinsurance undertakings representing a significant share of the market or of the activities concerned. The Autorité de contrôle prudentiel et de résolution may then extend the period referred to in the fourth paragraph.
Where the period has been extended pursuant to the fifth paragraph, the undertaking concerned shall submit a progress report to the Autorité de contrôle prudentiel et de résolution every three months setting out the measures taken and the progress made to restore the level of eligible own funds corresponding to the Solvency Capital Requirement or to reduce its risk profile in order to ensure coverage of the Solvency Capital Requirement. If, in the light of this report, the authority considers that no significant progress has been made, it shall interrupt the extension of the deadline.
