French Insurance Code
In forceI. - For a given financial year, the total amount of profit sharing guaranteed by the company or the supplementary occupational retirement fund under article A. 132-2 must be less than a ceiling calculated as the difference, when positive, between :
- 80% of the product of the average rate of return on the company's assets calculated for the last two financial years, multiplied by the mathematical reserves of contracts in categories 1, 2, 3, 4, 5, 7, 12 and 16 mentioned in article A. 344-2 at 31 December of the previous financial year; and
- the sum of technical interest allocated to the contracts mentioned in the previous indent during the previous financial year.
For the calculation mentioned in the first indent, the company substitutes the estimated mathematical provisions at 31 December of the previous financial year for the mathematical provisions at 31 December of the current financial year if these appear to be lower. For the same calculation, the company then substitutes the sum of technical interest estimated at 31 December of the financial year for the sum of technical interest during the previous financial year.
II - The guaranteed rates referred to in article A. 132-2 are expressed on an annual basis and are fixed for a continuous period of at least six months and at most the period between the effective date of the guarantee and the end of the following financial year.
However, this period may be less than six months for a given subscriber, provided that all policyholders under a group contract or individual contracts with the same conditions for the allocation of profit sharing have benefited from this guarantee since the beginning of the financial year.
III - The guaranteed rates referred to in II may not exceed the lower of 150% of the maximum technical interest rate defined in articles A. 132-1 and A. 132-1-1 by reference to 75% of the average rate on government bonds on the effective date of the guarantee or the higher of the following two rates :
120% of this same maximum technical interest rate and
110% of the average of the average rates paid to policyholders during the two financial years immediately preceding the effective date of the guarantee.
The average rate paid to policyholders is defined for each financial year for all contracts in categories 1, 2, 3, 4, 5, 7, 12 and 16 mentioned in article A. 344-2 as the cumulative amount of technical interest and bonuses allocated to policyholders divided by the average annual mathematical reserves.
IV - By way of derogation from the provisions of I and III, until the end of the second financial year following the granting of its authorisation, an undertaking may offer interest rates such as those mentioned in II, which must not exceed 120% of the maximum technical interest rate defined in articles A. 132-1 and A. 132-1-1 by reference to 75% of the average rate on government bonds on the effective date of the guarantee.
V. - The total amount of bonuses guaranteed under article A. 132-2 for the current financial year and, where applicable, for the following financial year must be deducted from the amount mentioned in the first paragraph of I.
However, only the amount of profit sharing guaranteed for the current financial year is deducted from the amount mentioned in the first paragraph of I when the company offers a rate for which it has not explicitly set the value.
