France: Financial Sector Assessment Program-Technical Note-Key Attributes of Effective Resolution Regimes for Insurance Companies

IMF Staff Country Reports, October 29, 2019

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Canonical URL: France: Financial Sector Assessment Program-Technical Note-Key Attributes of Effective Resolution Regimes for Insurance Companies

This technical note explores key attributes of effective resolution regimes (KA) for insurance companies in France.
The safety net in the sector is composed by two policyholder protection schemes, which can provide support in liquidation proceedings.
The report highlights consensus with the authorities that the new framework reflects many, however, not all elements needed for full compliance with the KAs, and identifies areas where further progress is needed.

Alignment of the framework with KAs in terms of the institutional organization and infrastructure is high.
The scope and responsibilities of the Prudential Supervision and Resolution Authority are clearly established in the law.
The law specifies the cases when those responsibilities are applicable and the Authority’s interaction with other relevant policy-making entities.

The new framework targets all institutions considered systemic, given their size and other relevant features.
Current implementation of RRP requirements is guided solely by the threshold in terms of total assets.
Any holding company, group, mutual, or foreign subsidiary above this level is subject to Recovery and Resolution Planning requirements.

Two policyholder protection schemes form the sector safety net and can provide support in liquidation proceedings.

The framework incorporates many elements needed for full compliance with the KAs but not all elements are present.
There is identified need for further progress in the areas where the framework does not yet fully meet the KAs.

International Monetary Fund. Monetary and Capital Markets Department