France: Financial Sector Assessment Program-Technical Note—Issues in Insurance Supervision and Regulation
IMF Staff Country Reports, October 29, 2019
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- France: Financial Sector Assessment Program-Technical Note—Issues in Insurance Supervision and Regulation
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Bibliographic details
- Published: October 29, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513517780.002
Overview
- Focus: issues in insurance supervision and regulation in France.
- Context: France has a very high level of insurance penetration, particularly for life insurance.
- Supervisory practice: for each insurance company, a risk assessment is undertaken on at least an annual basis and is recorded in a supervisory review process tool.
Key findings
- French insurance companies are significant users of the Volatility Adjustment (VA), with companies representing more than 90 percent of the technical provisions in the French insurance industry using the VA.
- Governance concern: the report recommends a minimum number of independent members on Administrative Management or Supervisory Boards.
- Supervision intensity: the Autorité de Contrôle Prudentiel et de Résolution should review the intensity and frequency of on-site supervision and its relationship to off-site supervision.
- Meetings with firms: with several other meetings with insurance companies possible, some of these meetings may be close to being called focused on-site inspections.
Policy recommendations
- Advocate to relevant EU authorities to introduce a minimum number of independent members on Administrative Management or Supervisory Boards, set at least one-third.
- Autorité de Contrôle Prudentiel et de Résolution should:
- review the intensity of on-site supervision,
- review the frequency of on-site supervision,
- reassess the relationship between on-site and off-site supervision to ensure appropriate supervisory coverage and clarity of purpose for meetings with insurance companies.
Supervisory and regulatory practices
- Risk assessment:
- Frequency: at least an annual basis for each insurance company.
- Recording: documented in a supervisory review process tool.
- Use of regulatory instruments:
- Volatility Adjustment (VA): widely used across the industry (more than 90 percent of technical provisions).
Subjects and keywords (as listed)
- Financial conglomerates, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Insurance, Insurance companies, Liquidity risk, Solvency
- Keywords: CR, Europe, Financial conglomerates, France, industry representative, Insurance, Insurance companies, insurance market, insurance premium, insurer, ISCR, life insurance, life insurance insurance company, life insurer, Liquidity risk, parent bank, SCR Ratios, Solvency, Solvency II, twenty-five solo insurance companies
France: Financial Sector Assessment Program-Technical Note—Issues in Insurance Supervision and Regulation (IMF Staff Country Reports, October 29, 2019).
Content in this bundle
- Executive Summary