France Insurance Industry – Governance, Risk and Compliance

France Insurance Industry Regulation Overview

The insurance industry in France is supervised by the Prudential Supervisory Authority (Autorité de Contrôle Prudentiel – ACPR) along with the International Association of Insurance Supervisors (IAIS), European Insurance and Occupational Pensions Authority (EIOPA), and Federation of European Risk Management Associations (FERMA).

The France insurance industry governance regulation report provides a detailed analysis of the insurance regulations for life, property, motor, liability, personal accident, and health, and marine, aviation, and transit insurance. The report specifies various requirements for the establishment and operation of insurance and reinsurance companies and intermediaries. The report also gives insurers access to information on prevailing insurance regulations and recent and upcoming changes in the country’s regulatory framework, taxation, and legal system. It includes the scope of non-admitted insurance in the country as well.

France Insurance Industry – Key Regulators and Legislation

Prudential Supervisory Authority (Autorité de Contrôle Prudentiel – ACPR): ACPR has been responsible for the supervision of the insurance industry in France since January 21, 2010. The ordinance defines the purpose, organization, composition, and functioning of the ACPR. The ACPR supervises compliance with laws and regulations applicable to insurers, pension funds, and union businesses.

International Association of Insurance Supervisors (IAIS): The IAIS is a membership-driven global organization that represents insurance regulators and supervisors. It formulates and issues various global insurance principles, standards, and guidance, provides training and support on issues related to insurance supervision and organizes meetings and seminars for insurance supervisors. The IAIS works closely with other financial sector standard-setting bodies and international organizations to promote financial stability.

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France Insurance Industry - Compulsory Insurance

Some of the key compulsory insurance required within the France insurance industry are:

• Motor Third-Party Liability Insurance
• Aviation Liability Insurance
• Marine Liability Insurance
• Professional Indemnity Insurance
• Social Security Insurance

France Insurance Industry Analysis by Compulsory Insurances

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France Insurance Industry - Company Registration and Operation

Insurance Code stipulates that insurers planning to set up headquarters in France or any other EU member state under the principle of freedom of services are mandatorily required to obtain a license from the ACPR. Similarly, insurance companies from non-Member States intending to operate in the French insurance industry must establish a branch and obtain a license and authorization for the branch operations and approval for an appointed representative from the ACPR. However, France does not require insurers and reinsurers from the EEA Member States to obtain an operating license in the French insurance industry. The French government allows 100% foreign direct investment in the country’s insurance industry.

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France Insurance Industry – Taxation

Tax is imposed upon insurance premiums within the insurance industry in France. French Tax Administration administers and supervises the taxation in France. It is responsible for achieving an effective, efficient, transparent, and taxpayer-oriented tax administration in the country. Rules and regulations stipulated in the Code Général des Impôts (CGI) govern federal taxation. The government has signed double-taxation treaties with more than 120 nations. The other taxes imposed are Corporate Income Tax, Corporate Capital Gains Tax, and Value Added Tax.

Corporate Income Tax: Any company incorporated in France or has its management and control in the country is considered a resident company for tax purposes. Both resident and non-resident companies are taxed on the income generated in France, whereas income sourced from abroad is not subject to taxation in the country. The corporate income tax rate (CIT) is reduced from 26.5% to 25% for companies starting January 1, 2022. The new rate applies to all companies irrespective of their turnover. From January 1, 2023, small corporations with taxable profits of up to EUR42,500 ($50,774.1) are eligible for the reduced CIT rate of 15%. Any excess over EUR42,500 ($50,774.1) is subject to the standard corporate income tax rate.

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Scope

This report provides:

• Details of the insurance regulatory framework in France
• Details of the rules and regulations governing insurance products and insurance entities
• Lists and analysis of key trends and developments pertaining to the country’s insurance regulatory framework
• Analysis of the rules and regulations pertaining to the establishment and operation of insurance businesses in the country
• Details of the taxation imposed on insurance products and insurance companies

Key Highlights

• ACPR regulates the French insurance industry.
• Non-admitted insurance is not permitted in the French insurance industry. However, insurance companies from EEA Member States are permitted to operate without obtaining license from the ACPR.
• Composite insurance is not permitted in France. However, a reinsurer may carry on both life and non-life reinsurance business.
• 100% foreign direct investment is permitted in the French insurance industry.
• Solvency II came into force in France on January 1, 2016, and new risk management standards for insurers were introduced.

Reasons to Buy

• Provides FAQ-style analytical insights comprising 129 knowledge elements on insurance compliance applicable to the country.
• Gain insights into the insurance regulatory framework in France.
• Track the latest regulatory changes and expected changes impacting the France insurance industry.
• Gain detailed information about the key regulations governing the country’s establishment and operation of insurance entities.
• Understand key regulations and market practices pertaining to various types of insurance products.