French Insurance Code
In forceI.-The contribution made by insurance undertakings to finance the intervention of the guarantee fund 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 is calculated in accordance with the procedures laid down by order of the Minister responsible for the economy.
This contribution comprises two parts:
1° A first part based on the difference between the premiums for the last ten financial years, multiplied by annual coefficients, and the technical provisions for the last financial year, within the meaning of Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings, relating to contracts whose underwriting is made compulsory by article L. 242-1, where the risk is located in France. The rate applicable to this difference is between 0% and 10% and the coefficients applied to the premiums of the last ten financial years are between 0 and 1;
2° A second part which is a function of 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 company covering, on the territory of the French Republic, risks covered by compulsory insurance pursuant to article L. 242-1, taking into account the other resources available to this section. This share is between 0% and 12% of the total expenses for the last financial year of this section. This percentage is set by order of the Minister for the Economy, taking into account the financing requirements mentioned above. This part of the contribution is divided between insurance companies in proportion to the premiums or contributions for the last financial year, including ancillaries and reminders and after deducting cancellations, relating to contracts whose underwriting is made compulsory by article L. 242-1, when the risk is located in France.
It is paid by insurance companies in accordance with the same rules and subject to the same guarantees and penalties as the tax on insurance contracts provided for in article 991 of the General Tax Code. It is collected annually by the guarantee fund.
II - When the balance of the special reserve relating to operations resulting from the withdrawal of authorisation of an insurance undertaking covering risks within the territory of the French Republic which are compulsory insurance risks pursuant to article L. 242-1 falls below 30 million euros, an extraordinary contribution from insurance undertakings is called in. The amount of this contribution is used to bring the balance of the special reserve in question down to this threshold. This extraordinary contribution is paid by the insurance companies under the same guarantees and penalties as the tax on insurance contracts provided for in article 991 of the General Tax Code. It is collected by the guarantee fund.
The extraordinary contribution is proportional to the premiums or contributions for the last financial year, including supplements and reminders and after deduction of cancellations, relating to contracts whose underwriting is made compulsory by article L. 242-1, when the risk is located in France.
Insurance companies have two months in which to pay their extraordinary contribution into the fund from the date of receipt of the fund's call.
Extraordinary contributions paid to the guarantee fund by insurance companies may not be repaid by the fund.
III - An order of the Minister responsible for the economy specifies the accounting management procedures for the operations of the guarantee fund related to the withdrawal of authorisation of an insurance undertaking covering, on the territory of the French Republic, risks covered by compulsory insurance pursuant to Article L. 242-1, in particular the conditions for setting up or taking over the special reserve mentioned in II.
