This technical note explores key attributes of effective resolution regimes (KA) for insurance companies on France. The safety net in the sector is composed by two policyholder protection schemes, which can provide support in liquidation proceedings. The report highlights that there is consensus with the authorities that the new framework reflects many, however, not all elements needed for full compliance with the KAs, and the 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, as well as the cases when those are applicable, and its interaction with other relevant policy-making entities. The new framework targets all institutions considered systemic, given their size and other relevant features. Its’ current implementation 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.

This paper discusses key findings of the Detailed Assessment of Observance of Insurance Core Principles for France. The assessment reveals that insurance regulation and supervision are still predominantly carried out using a Solvency I approach. The insurance sector remained resilient through the recent global financial crisis. A thorough approach to assessing insurer technical provisions and their coverage by admissible assets has led to financially sound insurers. Individual French insurance companies have not needed any government or industry support.