French Insurance Code
In forceLife assurance undertakings which:
a) Carry on the occupational retirement provision business referred to inArticle 7 of Order no. 2006-344 of 23 March 2006;
b) Or are authorised by the Autorité de contrôle prudentiel et de résolution and provide retirement benefits paid with reference to retirement, or approaching retirement, if the premiums paid in respect of these benefits benefit from a tax deduction granted to subscribers;
And provided that:
i) all the assets and liabilities corresponding to these activities are segregated, managed and organised separately from the other activities of the insurance undertakings, without any possibility of transfer ;
ii) That the activities of the undertaking mentioned in a and b are carried out only on French territory;
iii) the average duration of the undertaking's commitments corresponding to these activities exceeds an average of twelve years.
May be authorised by the Autorité de contrôle prudentiel et résolution to apply to the calculation of the Solvency Capital Requirement an "equity risk" sub-module which is calibrated using a value-at-risk measure, over a given period adapted to the period usually observed for the retention of equity investments by the undertaking concerned, ensuring a level of protection for policyholders or contract members equivalent to the level provided for in Article R. 352-2, provided that the approach provided for in this Article is used only for the assets and commitments mentioned in point i. When calculating the Solvency Capital Requirement, these assets and liabilities are fully taken into account in the assessment of diversification effects, without prejudice to the need to safeguard the interests of policyholders, contract holders and beneficiaries in other Member States.
The provisions of the preceding subparagraphs shall only be used where the undertaking concerned, with regard to its management of assets and liabilities, has a level of solvency and liquidity as well as strategies, processes and reporting procedures such as to ensure, on an ongoing basis, that it is able to hold investments in shares for a period corresponding to the period during which it normally holds its investments in shares. The undertaking must be able to demonstrate to the Autorité de contrôle prudentiel et de résolution that this condition is met in order to provide beneficiaries and policyholders with a level of protection equivalent to that provided for in Article R. 352-2.
Insurance and reinsurance undertakings shall not revert to the approach described in Article R. 352-6, except in duly justified circumstances and provided that the Autorité de contrôle prudentiel et de résolution so authorises.
The calculation methods and parameters to be used for the calculation of the duration-based "equity risk" sub-module are specified in Article 170 of Commission Delegated Regulation (EU) No 2015/35 of 10 October 2014.
The Autorité de contrôle prudentiel et de résolution shall decide on the authorisation referred to in the first paragraph within three months.
