Section VI: Intervention by the fund in the event of the withdrawal of an insurance undertaking's administrative authorisation

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Article L421-10

French Insurance CodeIn force
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Updated 8 Nov 2023

I.-The contribution made by insurance undertakings to finance the intervention of the guarantee fund in the event of the withdrawal of authorisation of an insurance undertaking covering, on the territory of the French Republic, the risks covered by compulsory insurance for land motor vehicles and their trailers and semi-trailers, is divided between these undertakings in proportion to the premiums or contributions for the last financial year, including supplements and reminders and after deducting cancellations, relating to contracts whose underwriting is made compulsory by article L. 211-1, when the risk is situated in France. It is paid by insurance companies in accordance with the same rules and subject to the same guarantees and penalties as the tax on insurance contracts provided for in article 991 of the General Tax Code. It is collected annually by the guarantee fund.

The amount of the contribution made by insurance companies depends on the financing requirements of the section of the guarantee fund dedicated to its intervention in the event of the withdrawal of authorisation of an insurance company covering, on the territory of the French Republic, risks relating to the compulsory insurance of land motor vehicles and their trailers and semi-trailers, taking into account the other resources available to this section. This contribution is between 0% and 12% of the total expenses of the last financial year of this section. This percentage is set by order of the Minister for the Economy, taking into account the funding requirements mentioned above.

II - When the balance of the special reserve relating to operations resulting from the withdrawal of the authorisation of an insurance undertaking covering, on the territory of the French Republic, risks relating to compulsory insurance of land motor vehicles and their trailers and semi-trailers falls below 70 million euros, an extraordinary contribution from insurance undertakings is called in. The amount of this contribution is used to bring the balance of the special reserve in question down to this threshold. This extraordinary contribution is paid by insurance companies under the same guarantees and penalties as the tax on insurance agreements provided for in article 991 of the General Tax Code. It is collected by the guarantee fund.

The extraordinary contribution is proportional to the premiums or contributions for the last financial year, including supplements and reminders and after deducting cancellations, relating to contracts whose underwriting is made compulsory by article L. 211-1, when the risk is located in France.

Member companies have two months from receipt of the Fund's call to pay their extraordinary contribution into the Fund.

Extraordinary contributions paid to the guarantee fund by companies whose membership of the fund has ended may not be repaid by the fund.

III - An order of the Minister for the Economy specifies the accounting management procedures for the operations of the guarantee fund related to the withdrawal of authorisation of an insurance company covering on the territory of the French Republic the risks covered by compulsory insurance of land motor vehicles and their trailers and semi-trailers, in particular the conditions for setting up or taking over the special reserve mentioned in II.

Mariela Petrova

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Mariela Petrova

Mariela Petrova

Avocate au Barreau de Paris

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15+ Years In Corporate Practice

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