French Insurance Code
In forceIf the ratio, assessed at the end of the financial year, between the sum of the special technical provision and the net unrealised gains and losses on the assets allocated to the special technical provision, on the one hand, and the theoretical mathematical provision, on the other hand, has been less than 0.9 for three financial years, the insurance undertaking shall draw up a convergence plan designed to re-establish a ratio of 1 within a period of seven years. This plan is adopted by the Board of Directors or the Supervisory Board within two months of the end of the third financial year. It is sent to the Autorité de contrôle prudentiel et de résolution within thirty days of its adoption. The members of the agreement are informed of the principles of this plan as part of the annual information statement provided for in article L. 441-3-1.
The undertaking shall report annually to the Autorité de contrôle prudentiel et de résolution on the implementation of this plan and its effects on the report defined in the first paragraph.
If, at the end of the convergence plan, the ratio referred to in the first paragraph is less than 1, the undertaking shall state this in the report provided for in Article L. 355-5, explaining the reasons why the theoretical mathematical provision has not been re-established, and shall inform the members of the agreement in the annual information statement provided for in Article L. 441-3-1.
In the same case, or if the insurance undertaking has not drawn up a convergence plan in accordance with the first paragraph, the agreement will be converted under the conditions provided for in Article R. 441-27 if, at the end of ten successive financial years, the ratio referred to in the first paragraph is less than 0.9.
For the purposes of this article, no account shall be taken of financial years ending before 1 January 2017.
