French Insurance Code
In forceI.-The Fonds de Garantie des Assurances Obligatoires de dommages (Guarantee Fund for Compulsory Non-Life Insurance) set up by Article L. 421-1 is responsible for protecting insured persons who have taken out, subscribed to or received benefits under insurance contracts which are compulsory under Articles L. 211-1 or L. 242-1, against the consequences of the withdrawal of authorisation of an insurance company covering, on the territory of the French Republic, the risks of civil liability resulting from the use of motorised land vehicles and their trailers and semi-trailers or, outside any search for liability, the payment of the total cost of repairing damage of the kind for which builders within the meaning of article 1792-1 of the Civil Code, manufacturers and importers or the technical inspector on the basis of article 1792 of the same code are liable.
Only claims covered by the contract for which the road traffic accident or disorder occurs before the end of the validity of the insurance policy as defined by the applicable law and which, in the case of road traffic accidents, give rise to a first claim by a third party victim less than five years after that date and which occurred in France or, in the case of accidents occurring on the territory of a State referred to in article L. 211-4 other than France, were caused by vehicles and their trailers and semi-trailers normally based in France.
However, without prejudice to the provisions of article L. 311-31, the intervention of the guarantee fund is suspended when the insurance undertaking is the subject of a resolution measure, under the conditions set out in section 6 of chapter II of title I of book III. If the insurer's approval is not restored, only claims covered by the contract for which the traffic accident or disorder occurs before the end of the validity of the insurance policy as defined by the applicable law and which, in the case of traffic accidents, give rise to a first claim by a third party victim less than five years after that date, are covered.
II - Insurance contracts are excluded from any compensation under this section:
1° For which an insured, a policyholder, a member, a beneficiary of benefits or a third party acting on behalf of one of these persons was able to benefit from information on the situation of the failing company or from special advantages;
2° Relating to transported goods, legal protection or assistance to persons in difficulty, particularly during travel;
3° Covering or indemnifying risks or commitments outside the European Community, or covering or indemnifying third party victims who are nationals or residents of countries outside the European Community;
4° Underwritten by the following persons :
a) Directors, managers, personally liable partners holding, directly or indirectly, at least 5% of the capital of the insurance company, statutory auditors and insured persons having the same capacity in other companies of the group, directors of the mutual insurance company ;
b) Third parties acting on behalf of the policyholders, contract holders, members and beneficiaries of benefits referred to in the first paragraph of I;
c) Insurance companies governed by this Code, provident institutions governed by the Social Security Code or the Rural Code and mutual insurance companies governed by the Mutual Code, except in the case of contracts taken out for the benefit of their employees or customers;
d) Companies included in the scope of consolidation defined in article L. 233-16 of the French Commercial Code, to which the insurance company belongs, except in the case of contracts taken out for the benefit of their employees or customers;
e) Credit institutions, finance companies and persons referred to in Article L. 518-1 of the Monetary and Financial Code, except for policies taken out on behalf of a borrower, a client or their employees;
5° Insuring legal entities and natural persons who are policyholders, members or beneficiaries, in respect of their professional activities; however, policies taken out for the benefit of a natural person who is a client or member outside the context of his professional activities or for the benefit of employees of the legal entities or natural persons mentioned above are covered.
III - In the cases provided for in 1°, 4° and 5° of II, persons who are victims of a loss for which the insured is responsible and who are not in a contractual situation with the insured due to their professional activity are compensated by the fund.
A decree of the Conseil d'Etat shall determine the conditions of application of this article.
