French Insurance Code
In force1° The loans referred to in 12° of article R. 332-2 must have a total term of at least two years and meet the following conditions:
They must be secured by a guarantee given by a credit institution, finance company or insurance company not belonging to the same group as the lender or borrower and approved by one of the States party to the Agreement on the European Economic Area, or a pledge of securities meeting the conditions set out in article R. 332-17, up to a limit of 75% of the nominal amount of the said securities. Companies included in the same scope of consolidation or preparation of the combined financial statements referred to in the third paragraph of article L. 345-2 are deemed to belong to the same group within the meaning of this article.
However, loans may be unsecured when the borrower is either a company in which one of the Member States of the OECD or one of its public institutions holds more than half of the capital, or a company whose shares are traded on a recognised market as defined in the last paragraph of A of article R. 332-2.
Loans may also be unsecured if they are of sufficiently high credit quality and are granted, under a programme approved by the Autorité de contrôle prudentiel et de résolution, to :
a) Legal entities governed by private law in the Member States of the European Union, whose principal activity is commercial, industrial, agricultural, craft or real estate business, with the exception of financial activities and undertakings for collective investment other than undertakings for collective investment in real estate ;
b) Legal entities governed by the private law of the Member States of the European Union whose purpose, exclusively or, as the case may be, mainly in addition to carrying on a commercial, industrial, agricultural, craft or real estate activity, excluding financial activities, is to hold directly or indirectly one or more interests in the capital of legal entities referred to in a, or, exclusively, to finance, for the benefit of a Member State of the European Union, a local authority or public body of a Member State of the European Union or a person referred to in a, the export, acquisition or operation of capital goods or infrastructure.
The approval of the Autorité de contrôle prudentiel et de résolution takes into account the adequacy of the credit risk analysis and measurement system put in place by the insurance undertaking. The content of this system and the criteria for selecting eligible credit transactions are specified by an order of the Minister for the Economy.
The fourth to seventh paragraphs of this 1° do not apply to mutual insurers and unions governed by Book II of the Mutual Code, or to provident institutions and unions governed by Title 3 of Book 9 of the Social Security Code.
2° Receivables representing securities loans are accepted as collateral for regulated commitments if they have been guaranteed in cash or by a surety given by a credit institution, finance company or insurance company approved by one of the Member States of the European Union, or by a pledge of securities meeting the conditions set out in Article R. 332-17.
