France’s insurance regulator, the ACPR, has published an information guide for the local captive market and prospective captive owners as activity in Europe’s fastest growing domicile continues to ramp up.
Captive Intelligence reported last week that French winemaker Baron Philippe de Rothschild was the latest company to form a captive in France, while AXA XL’s Marine Charbonnier believes there are between five and 10 further applications awaiting approval.
In light of growing interest, the ACPR has moved to provide further information on the agreed application process and requirements, expected timelines and best practices to obtain approvals. Find that document here.
Under France’s insurance code, a captive is defined as a reinsurance company owned by a non-insurance company or group providing reinsurance coverage relating exclusively to the risks of the company or companies within the wider group.
Detailing the approval procedure for reinsurance captives in France, the ACPR states “in-depth internal reflection” must take place at the prospective owner to assess the advantages, opportunities, costs and obligations of forming and operating a captive, before it contacts the regulator to arrange a first meeting to present the project.
Following the meeting and submission of the application, the ACPR is expected to make a decision on approval within six months, while further calls or meetings with the proposed captive leadership could also take place.
Motivations of the applicant, governance structure, risks covered, business plan and risk management measures are all taken into consideration by the regulator when assessing an application.
Being in the European Union, France’s captives are subject to Solvency II regulation and the ACPR also sets out the reassurances it needs from the proposed captive’s parent as to further supporting the reinsurer financially should it run into difficulties.
To view the full publication, in French, from the ACPR click here.