French Insurance Code
In forceI.- The income generated by the guarantee fund comprises the proceeds of the contribution provided for in article L. 422-1, compensation received from liable parties and recoveries made from compensation debtors, income from invested funds and profits on reimbursements and the realisation of assets, payments from the State budget, donations and legacies and any other resources that may be allocated to the guarantee fund. Expenditure includes compensation and costs paid in respect of claims assumed, operating, recourse and investment costs incurred and losses on the realisation of assets.
II.-The guarantee fund may use the excess of its resources over its current expenditure to acquire the financial instruments referred to in article L. 211-1 of the Monetary and Financial Code and real estate assets.
It invests all of its assets in accordance with the "prudent person" principle referred to in article L. 353-1 of this code. In this respect, the guarantee fund is subject to the obligations imposed on insurance and reinsurance undertakings by the first, second and fourth paragraphs of I and by III of article R. 353-1, under conditions set by order of the Minister for the Economy.
Each year, the Board of Directors adopts an investment policy contributing to the long-term equilibrium of the guarantee fund.
The guarantee fund implements an internal investment management control system to ensure the measurement, evaluation and control of these investments, in particular with regard to the evaluation of asset quality and asset-liability management, as well as the monitoring of transactions on forward financial instruments. In particular, the system provides for the internal allocation of responsibilities among staff, ethical rules, delegation of powers, dissemination of information and internal control and audit procedures.
