French Insurance Code
In forceI.-Branches of undertakings referred to in 4° of Article L. 310-2 shall establish adequate technical provisions to cover the insurance and reinsurance obligations underwritten on French territory, calculated in accordance with the provisions of Section I of Chapter I of Title V of this Book, with the exception of Articles L. 351-4 and L. 351-5 and value their assets and liabilities in accordance with the procedures set out in Section II of Chapter I of Title V of this Book, and determine their own funds in accordance with the provisions of Section III of Chapter I of Title V of this Book.
II - Branches of undertakings referred to in 4° of Article L. 310-2 have an amount of eligible own funds consisting of the items referred to in Article R. 351-26.
The Solvency Capital Requirement and the Minimum Capital Requirement are calculated in accordance with the provisions of Chapter II of Title V of this Book.
However, for the purposes of calculating the Solvency Capital Requirement and the Minimum Capital Requirement, only the operations carried out by the branch concerned are taken into consideration, for both life and non-life insurance.
The eligible amount of basic own funds required to cover the Minimum Capital Requirement and the absolute floor of this Minimum Capital Requirement are established in accordance with the fourth paragraph of Article R. 351-26.
The eligible amount of original own funds may not be less than half of the absolute floor required under Article R. 352-29.
One quarter of the absolute floor required under article R. 352-29 must be deposited or recorded in an account with the Caisse des dépôts et consignations or the Banque de France as security. This deposit is included in the eligible basic own funds intended to cover the minimum capital requirement.
The assets representing the Solvency Capital Requirement must be located in France up to the amount of the Minimum Capital Requirement and, for the remainder, within the European Union.
III - A branch of an undertaking referred to in 4° of Article L. 310-2 which has also obtained the approval of one or more Member State supervisory authorities may apply to benefit from the following advantages, which may only be granted jointly:
a) The Solvency Capital Requirement referred to in II of this Article shall be calculated on the basis of all the business carried on within the European Union;
b) The deposit required under the sixth paragraph of II is made only in one of the Member States concerned;
c) The assets representing the minimum capital requirement are located in one of the Member States in which they carry on business.
In the case referred to in a, only transactions carried out by all branches established within the European Union are taken into consideration for this calculation.
The application to benefit from the aforementioned advantages is submitted to the supervisory authorities of the Member States concerned. This application shall indicate the supervisory authority of the Member State which will in future have to verify the solvency of branches established within the European Union for all their operations. The company must give reasons for its choice of supervisory authority.
Where it has been chosen under the above-mentioned procedure, the Autorité de contrôle prudentiel et de résolution may only grant the advantages provided for in the preceding paragraphs of III with the agreement of all the supervisory authorities concerned.
Where it is not the Authority chosen under the above procedure, the Autorité de contrôle prudentiel et de résolution shall inform the other supervisory authorities concerned of its decision concerning the granting of the aforementioned advantages.
These advantages take effect on the date on which the chosen supervisory authority informs the other supervisory authorities that it will verify the solvency of branches established within the European Union for all their operations.
The chosen supervisory authority shall obtain from the supervisory authorities of the other Member States the information necessary to verify the overall solvency of the branches established within their territories.
At the request of one or more of the supervisory authorities of the Member States concerned, the advantages granted under III shall be withdrawn simultaneously by all the supervisory authorities of the Member States concerned.
For the application of Articles L. 352-7 and L. 352-8, in the case of an undertaking which may benefit from the advantages provided for in III, where the Autorité de contrôle prudentiel et de résolution is the supervisory authority chosen in accordance with the seventh paragraph of III, it shall be treated in the same way as the supervisory authority of the Member State in whose territory the head office of the undertaking established in the European Union is located.
In the event of withdrawal of authorisation, the Autorité de contrôle prudentiel et de résolution shall inform the supervisory authorities of the other Member States in which the undertaking carries on business, which shall take the appropriate measures.
If the decision to withdraw authorisation is taken in accordance with the second paragraph of Article L. 352-1, the Autorité de contrôle prudentiel et de résolution and the supervisory authorities of the Member States which have given their agreement in accordance with III shall withdraw their authorisation.
If the supervisory authority of another Member State chosen in accordance with the eighth paragraph of III withdraws the authorisation due to the inadequacy of the overall solvency referred to in the second paragraph of III, the Autorité de contrôle prudentiel et de résolution shall withdraw the authorisation of the branch.
