France

BOPS

Alexis Valençon
alexis.valencon@bopslaw.com

1. Insurance intermediation activities

1.1 Is the distribution of insurance products (hereinafter referred to as ‘insurance intermediation

activities’ or ‘insurance intermediation’) limited to insurance intermediaries in your country?

a) French law of insurance intermediation mostly originates in a transposition of EU Directive 2002/92 of 9

December 2002 on insurance intermediation. The directive was transposed by law no. 2005-1564 of 15
December 2005 and Decree No. 2006-1091 of 30 August 2006, whose provisions have been codified in the
French Insurance Code (‘FIC’).

Under Article L. 511-1 of FIC, an insurance intermediary is a ‘person who, against payment, carries out an
insurance or reinsurance intermediation activity’ (for a definition of insurance and reinsurance activities see
1.2 below). Insurance (or reinsurance) intermediaries as defined in Article L. 511-1 FIC are subject to specific
rules provided for by Article L. 512-1 et seq. and Article R. 512-1 et seq. of FIC (duty to register, integrity and
professional requirements, duty to provide information and advice to the insured etc; see 2.1 below).

By virtue of (Article R. 511-2 of FIC), insurance Intermediaries allowed to distribute insurance products in
France are:

 insurance brokers;
 insurance general agents;
 insurance agents;
 agents of insurance intermediaries;
 employees of insurance intermediaries; and
 intermediaries registered in an EU or EEA Member State.

b) Apart from insurance intermediaries as defined above, insurance contracts can be distributed by the
following persons, who are not considered as insurance intermediaries by French law:


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persons who distribute insurance products without compensation;
 persons who distribute insurance products as an ancillary activity to their main professional activity,
under certain restrictive conditions provided for in Article R. 513-1 of FIC (see 1.3 below); and
 insurance companies and their employees (Article L. 511-1-II of FIC).

1.2 What does the term ‘insurance intermediation’ include? Is there any definition set forth by
statutory or case law? In any case, please indicate which activities/services are included in the
above definition, for example, presentation or proposal of insurance products, assistance or
consultancy aimed at drafting the agreement. Are collaboration activities that relate to the
administration or execution of the contracts drafted, even in the case of accidents, included in
the definition? Does the drafting of contracts or insurance agreements in collective form on
behalf of insured individuals also form part of insurance intermediation activities?

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As an example, an association (sport association, parent association etc) that subscribes to a group insurance contract
for the benefit of its members (with an option for the member to subscribe) carries out an intermediation activity.
However, the association will not be considered as an insurance intermediary if it provides this service to its members
without being remunerated (see J. Bigot, D. Langé, Traité de droit des assurances, L’intermédiation d’assurance, LGDJ,
No. 884).
Under French law, any preparatory act that is performed by a person acting as an intermediary with the
perspective of helping someone to conclude an insurance (or reinsurance) contract shall be considered as an
insurance (or reinsurance) intermediation activity (see Article L. 511-1 and Article R. 511-1 of FIC). As a
consequence, the following activities shall be considered as insurance intermediation activities:

 proposing an insurance contract to someone;

 receiving the subscription of an insurance contract before transmitting this subscription to the insurer
(or reinsurer); and
 presenting to someone the coverage conditions of an insurance contract, or conducting any other
preparatory act (eg, assistance, consultancy, drafting of the agreement, etc), in the perspective of
helping this person to conclude the contract.

Logically, acts that are not performed in the perspective of the conclusion of an insurance contract are not
considered as an intermediation activity by French law, such as:

 activities merely consisting of providing information or advice in relation to an insurance product not
for the purpose of helping someone to conclude an insurance contract (Article L. 511-1 FIC); or
 activities related to the execution of an insurance contract in case of a loss (loss adjustment,
liquidation of damages, etc) (Article R. 511-1 of FIC, section 2).

1.3 Are insurance intermediation activities allowed as ancillary activities to other professional
activities (eg, travel or rent-a-car services, etc) and to what extent? Furthermore, are there
exceptions that allow actors, other than insurance intermediaries, to carry out insurance
intermediation activities? Is it a matter related, for example, to the risk covered, the duration or
the cost of the policy premium, etc?

As stated above, apart from insurance intermediaries (subject to the specific legal regime defined by Article L.
512-1 et seq. and Article R. 512-1 et seq. of FIC), insurance intermediation can be carried out by persons who
distribute insurance products as an ancillary activity to their main professional activity. This activity is allowed
under the restrictive conditions set out in Article R. 513-1 of FIC.
Insurance products can only be distributed as an ancillary activity in one of the two following situations:

 an insurance contract can be sold as a complement to the supply of a good. The insurance shall,
however, exclusively cover the risk of breakdown, loss, theft of or damage to the good supplied;
 an insurance contract can also be sold as the complement to a travel contract. The insurance shall
exclusively cover the risk of damage to or loss or theft of baggage or other risks linked to the travel.

For example, a phone service provider can sell, as a complement to the sale of a cell phone, an insurance
covering the risk of theft or loss of the phone and does not have, as a consequence, to register as an
insurance intermediary. By way of further example, a travel agency can sell travel cancellation insurance to a
client as a complement to a flight ticket under Article R. 513-1 of FIC (J. Bigot, D. Langé, Traité de droit des
assurances, L’intermédiation d’assurance, LGDJ, p. 342).

Article R. 513-1 of FIC provides that the insurance contract shall meet the following additional conditions:


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the insurance contract shall only cover the risks listed above and shall not cover civil liability;

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the insurance contract cannot provide for a life insurance;
 the insurance contract only requires knowledge of the insurance cover that is provided; and
 the amount of the annual premium does not exceed €500 and the total duration of the insurance
contract, including any renewals, does not exceed five years.

It should be noted that a bank is not allowed to sell insurance products as an ancillary activity under Article R.
513-1 of FIC (for example, credit insurance as a complement to a loan contract). As a consequence, a bank

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An insurance contract sold as a complement to a travel contract can, however, cover civil liability if this coverage is
ancillary to the main cover for the risks linked to the travel.
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An insurance contract sold as a complement to a travel contract can also provide for a life insurance if this insurance is
ancillary to the main cover for the risks linked to the travel.
distributing insurance products must register as an insurance intermediary and will be subject to the specific
rules provided for by Article L. 512-1 et seq. and Article R. 512-1 et seq. of FIC (see 3.4.3 below).

2. Insurance intermediaries’ requirements

2.1 In order to act as an insurance intermediary, is there need for an authorisation and/or to be
enrolled in a register? If yes, what are the requirements to be authorised/enrolled in the
register as an insurance intermediary (individual or legal entities, integrity and/or professional
requirements, etc)? Briefly explain how it works.

Insurance Intermediaries shall be registered with a professional authority and have to meet several conditions
to be registered.

Obligation to register

In order to carry out their activity, insurance intermediaries have to be entered on a special register held by
the ORIAS (Organisme pour le Registre des Intermédiaires en Assurance). This professional authority is
competent in France to review the applications for the registration or renewal of registration of insurance
intermediaries (Articles L. 512-1 of FIC).

By way of exception, insurance intermediaries registered in another EU or EEA Member State and carrying
out an activity in France are allowed to distribute insurance products without having to register with the
ORIAS, although they are considered as insurance intermediaries under French law (Article R. 512-1 of FIC;
see 1.1 above and 2.3 below).

As mentioned earlier, employees of insurance intermediaries are considered as insurance intermediaries

themselves as defined in Article 511-1 of FIC (see 1.1 above). However, they have no duty to register with the
ORIAS (Article R. 512-1 of FIC).

Conditions to register

In order to be entered in the register held by ORIAS, insurance intermediaries must:

 hold a professional indemnity insurance covering liability arising from professional negligence;


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have lodged a financial guarantee;

 have paid the annual registration fee (Article L. 512-1 of FIC);

 fulfilled the professional requirements provided for by French law (eg, professional training,
professional experience in the insurance sector, degrees, diplomas, etc) (Article L. 512-5 of FIC); and

 fulfilled integrity requirements.

The integrity and professional requirements apply to the insurance intermediary itself when the intermediary is
a natural person. When the insurance intermediary is a legal person, the requirement applies to persons
within the management structure of such an undertaking (eg, directors, officers, general managers, members
of the executive board, the board of directors, etc.) and employees directly involved in insurance or
reinsurance intermediation (see Articles L.512-4 and 512-5 of FIC).

2.2 In what form can anyone access and verify the registration/authorisation or verify the fact that
the insurance intermediary is a professional (eg, via the web)?

The register held by the ORIAS is freely accessible to the public (Article L. 512-1 of FIC) and can be consulted
on the ORIAS website (www.orias.fr).

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Except if the insurance intermediary acts as an agent of the insurance company (ie, under a power of attorney) with
respect to the payment of the premiums or insurance indemnities (Art. 512-7 of FIC). In this case, the intermediary does
not have to lodge a financial guarantee (see D. Langé, Jcl. Responsabilité civile et assurance, fasc. 630, 86).
2.3 Are insurance intermediaries with a registered office in another country allowed to operate in
your country and how (eg, under the right of establishment or freedom to provide services in
your country, as in the EU)? If yes, under what conditions? In such a case, are they bound by
the same obligations as the insurance intermediaries with a registered office in your country?
Please describe.

France has transposed Article 6 of EU Directive 2002/92 on insurance intermediation providing for a right of
intermediaries registered in an EU Member State to carry out their activities in another Member State without
being required to register in the hosting state.

According to article R. 511-2 of FIC, intermediaries registered in another EU Member State, or in a State Party
to the Agreement on the European Economic Area (all EU member states, Norway, Liechtenstein, and
Iceland) do not have to register with the ORIAS and are not, as a consequence, subject to the requirements
provided for by Article L. 512-1 et seq. and Article R. 512-1 et seq. of FIC exposed above (see 2.1).

In order to carry out their activity in France, these intermediaries shall only be registered for their insurance
intermediation activity with the competent authority of their home state and shall notify to this authority their
intent to commence an activity in France. The authority of the home member state shall inform the ORIAS,
which will enter the foreign intermediary on a special register (Article 515-2 of FIC; Daniel Langé, Jcl.
Responsabilité civile et assurance, fasc. 630, 95).

Apart from registration requirements, that are governed by the laws of the state of origin of the EU/EEA
insurance intermediary, French law may be applicable to the latter’s activity in France. It will be the case, for
example, if the contract concluded between the EU/EEA insurance intermediary and his or her client provides
that French law governs the agreement.

In any case, EU/EEA insurance intermediaries in France will be subject to French overriding mandatory
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provisions, that are applicable irrespective of the law governing their activity.

Apart from the European intermediaries mentioned above, French law does not allow any other foreign
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intermediary to carry out his or her activity in France without being first registered with the ORIAS.

3. Different types of insurance intermediaries

3.1 Please list the different types of insurance intermediaries acting in your country such as
agents, brokers, banks, financial intermediaries or financial advisers.

Article R. 511-2 of FIC provides a list of insurance intermediaries allowed to carry out an intermediation
activity in France:

 insurance brokers (see 3.4.2 below);

 insurance general agents (see 3.4.1 below);
 insurance agents (see 3.4.1 below);

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agents of insurance intermediaries;
 employees of insurance intermediaries; and
 intermediaries registered in an EU or EEA Member State.

The above list does not consider those persons who can distribute insurance contracts under French law in
addition to insurance intermediaries, as listed under 1.1. above.

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In this respect, see Art. 9 of Regulation No. 593/2008 of 17 June 2008 and Art. 16 of Regulation No. 864/2007 of 11
July 2007.
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http://acpr.banque-france.fr/vous-etes/intermediaires/intermediaires-dassurance/foire-aux-questions.html.
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Brokers, insurance agents and insurance general agents are allowed to recruit agents to help them distributing
insurance products. As an example, a sub-agent recruited by an insurance general agent is an ‘agent of an insurance
intermediary’ under Art. R. 511-2 of FIC (see 3.4.1.4).
3.2 Do insurance intermediaries need to enter into a written contract with the insurers (or receive a
mandate from the insurers)?

a) Brokers, because they must be independent from insurance companies, are not allowed to enter into an
exclusivity agreement with one or more insurance companies (Article L. 520-1-II of FIC; see Daniel Langé, Jcl.
Responsabilité civile et assurance, fasc. 640, 18). Contracts (without any exclusivity) can be concluded by the
broker with the insurance companies whose products he or she distributes. However, there is no obligation to
do so (see Daniel Langé, Jcl. Responsabilité civile et assurance, fasc. 640, 76).

b) Insurance general agents and insurance agents necessarily act under a contract of agency concluded with
one or more insurance companies and have to provide the ORIAS with a proof of the existence of the agency
contract(s) concluded in order to be registered (Article R. 511-2 of FIC; Article A. 512-1 of FIC). The agency
contract does not, however, have to be concluded in a written form (see J. Bigot and D. Langé, Traité de droit
des assurances, L’intermédiation d’assurance, LGDJ, p. 384).

c) Agents and employees of insurance intermediaries have a contractual relationship with the insurance
intermediary on behalf of which they distribute insurance products.

3.3 Can an insurance intermediary enter into a contract with the insurers (or receive a mandate
from the insurer) and in turn enter into one or more agreements with other insurance
intermediaries (the so-called horizontal distribution)?

Horizontal distribution is allowed in France. Law No. 2005-1564 of 15 December 2005 created a new category
of insurance intermediary: the agent of an insurance intermediary, which is allowed to contract an agency
agreement with insurance intermediaries and distribute insurance products on their behalf (Article R. 512-1 of
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FIC). It should, however, be noted that the activity of agents of insurance intermediaries is restricted by
Article R. 511-2 of FIC to the following activities:

 proposing an insurance contract, or, more generally, helping someone to conclude an insurance
contract;
 receiving, on behalf of the insurer, the payment of the premiums due by the insured; and
 as far as life insurance is concerned, receiving and transferring the sums due to the insured.

As a consequence, the function of the agent of an insurance intermediary is limited to the distribution of
insurance products on behalf of another insurance intermediary. He or she cannot be in charge of a contract
management activity (ie, monitoring the execution of the insurance contract).

It should, however, be underlined that this restriction does not apply to banking institutions when they carry
out bank insurance activities (and some transportation insurances) (see Article R. 511-2, 4° of FIC; Article R.
511-2 of FIC; P.-G. Marly, A la recherche du statut de bancassureur, Revue de droit bancaire et financier, No.
6, 2006, étude 22).

3.4 The insurance intermediaries more in detail:

3.4.1 The agent

3.4.1.1 Does the role of insurance agent exist in your country? If yes, describe the agent’s functions.

Under French law, there are two categories of insurance agents:

 the insurance general agent; and

 the insurance agent.

Insurance general agents

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Brokers, insurance agents and insurance general agents are allowed to recruit agents to help them distributing
insurance products. As an example, a sub-agent recruited by an insurance general agent is an ‘agent of an insurance
intermediary’ under Art. R. 511-2 of FIC (see 3.4.1.4).
Insurance general agents are insurance intermediaries acting on behalf of insurance companies and
distributing their products on a given territory/district. Their legal status is precisely regulated by both legal or
regulatory rules and professional rules.

The activity of insurance general agents is regulated (since 1 January 1997) by:

 legislative provisions (Articles L. 511-1 et seq. and R. 511-1 et seq. of FIC);

 a regulatory status adopted by a decree in 1996 (Decree No. 96-902 of 15 October 1996);
 the federal convention of 16 April 1996 concluded between the French federation of insurers, the
FFSA (Fédération Française des Sociétés d’Assurances) and the French syndicate of insurance
general agents, the FNSAGA (Fédération Nationale des Syndicats d’Agents Généraux
d’Assurances);
 collective bargaining agreements concluded at company-level.

Before the adoption of the abovementioned regulatory status of 1996 and federal convention, insurance
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general agents were subject to either one of the two following regulatory statuses:

 agents distributing property and casualty insurances were subject to a regulatory status adopted in
1949 by Decree No. 47-317 of 5 March 1949; and
 agents distributing life insurances were subject to a regulatory status adopted in 1950 by Decree No.
50-1608 of 28 December 1950.

The function of the insurance general agent is to distribute the products of his or her insurance company and
monitor the execution of the contract on behalf of the latter (receive premiums, pay insurance indemnities etc.)
(see J. Bigot, D. Langé, Traité de droit des assurances, L’intermédiation d’assurance, LGDJ, No. 541 et seq.).

The contract concluded with the insurance company (Traité de nomination) will determine in details the
functions attributed to the agent. As an example, the contract can grant to the agent the authority to conclude
insurance contracts on behalf of the company with the clients, but it is not necessarily the case (J. Bigot, D.
Langé, Traité de droit des assurances, L’intermédiation d’assurance, LGDJ, No. 547).

Insurance agents

The insurance agent also distributes the insurance products of an insurer under an agency contract. He or
she is, however, subject to a more flexible legal status. His or her activity is not subject to specific rules, but is
regulated by general agency law and by the contractual provisions agreed with the insurance company (J.
Kullmann (dir.) Lamy Assurances, No. 4823).

In particular, the contract can provide for an exclusivity agreement with the insurer, but it can also allow the
agent to distribute the insurance products of several companies (see Daniel Langé, Jcl. Responsabilité civile
et assurance, fasc. 630, 56; J. Kullmann (dir.) Lamy Assurances, No. 4823).

By way of example, department stores selling insurance products, or banking institutions selling insurance
products as a complement to a loan agreement (bank insurance business) often choose to carry out their
activity under the regime of insurance agents (see 3.4.3.1; P.-G. Marly, A la recherche du statut de
bancassureur, Revue de droit bancaire et financier, No. 6, 2006, étude 22). It should, however, be noted that
the insurance agent’s activity is restricted by Article R. 511-2 of FIC to:

 proposing an insurance contract, or, more generally, helping someone to conclude an insurance
contract;
 receiving, on behalf of the insurer, the payment of the premiums due by the insured; and
 as far as life insurance is concerned, receiving and transferring the sums due to the insured.

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It shall be further underlined that some insurance agents who started their activity before 1996 are still subject to the
statuses of 1949 and 1950. When the new status and the federal convention were adopted in 1996, insurance general
agents who were already operating could decide to opt for the new status or keep on carrying out their activity under
the previous status. Approximately, one third of insurance agents did not opt for the new status and are still subject to
the statuses of 1949 and 1950 (J. Kullmann (dir.), Lamy Assurances, No. 4766).
As a consequence, insurance agents cannot be in charge of a contract management activity (ie, monitoring
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the execution of the insurance contract) (J. Kullmann (dir.) Lamy Assurances, No. 4823).

3.4.1.2 In particular, does an agent act on behalf of the insurer or the insured? Who pays the agent’s
remuneration? To what kind of remuneration is the agent entitled?

Insurance general agents

Insurance general agents act on behalf of and are paid by insurance companies (D. Langé, Jcl.
Responsabilité civile et assurance, fasc. 635-20, 48). The agent is required to conclude an agency
agreement in order to be allowed to carry out his or her activity and to be registered with the ORIAS (Article R.
511-2 of FIC; Article A. 512-1 of FIC).

Moreover, the insurance general agent is necessarily bound by an exclusivity agreement concluded with an
insurance company. The agent can either:

 act on behalf of a single insurance company; or

 act on behalf of several companies, provided that these companies do not compete and sell products
of different insurance branches (point II-D-2 of the federal convention of 1996; Article 4 of the statuses
of 1949 and 1950).
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The insurance general agent is not allowed (with some restrictive exceptions ) to distribute the products of a
competitor of his or her insurance company(ies).

Insurance general agents are paid by commissions on the products they distribute and by management fees
for the insurance contracts whose execution they monitor (D. Langé, Jcl. Responsabilité civile et assurance,
fasc. 635-20, No. 48; federal convention of 16 April 1996, II-D-3).

However, other types of remuneration can be paid to the agents in addition to the commissions on sales and
management (J. Kullmann (dir.), Lamy Assurances, No. 4766).

Insurance agents

Insurance general agents also act on behalf of and are paid by insurance companies (J. Kullmann (dir.) Lamy
Assurances, No. 4823). As is the case for insurance general agents, insurance agents are required to
conclude an agency agreement with at least one insurer (Article R. 511-2 of FIC; Article A. 512-1 of FIC).

The remuneration is determined by the contract concluded with the company, which usually provides for a
remuneration by commissions on the premiums generated to the benefit of the insurance company (J.
Kullmann (dir.), Lamy Assurances, No. 4823).

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It should, however, be underlined that this restriction does not apply to banking institutions (and some
transportation insurances; see article R. 511-2, 4° of FIC) when they carry out bank insurance activities (article R. 511-2
of FIC; P.-G. Marly, A la recherche du statut de bancassureur, Revue de droit bancaire et financier, No. 6, 2006, étude
22).
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Depending on the status applicable, the insurance general agent may be allowed to place a risk with another
company, when it could not place it with his or her company. Insurance agents subject to the statuses of 1949 and 1950
are allowed, for example, to place the risk with another company when his or her company refused to cover this risk
(either totally or partially), or because the client needs a product that the company does not sell (ie, an insurance
product of another insurance branch). As far as agents subject to the status of 1949 are concerned, the company has,
however, the right, in some cases, to oppose against the placement with another insurer (eg, when the risk could not
be placed with the company because it refused to cover it) (article 3 of the statuses of 1950 and 1949). Lastly, agents
subject to the status of 1996 can be granted the right to place the risk with another company by the collective
bargaining agreements concluded at company-level (J. Bigot, D. Langé, Traité de droit des assurances, L’intermédiation
d’assurance, LGDJ, No. 550).
3.4.1.3 If an agent acts on behalf of the insurer, describe the type of work relationship with the insurer
(eg, subordinate, para-subordinate or freelance, self-employed etc). Does the ‘principal-agent
model’ exist, that is, is one appointed by the insurer to manage a particular branch or
subsidiary?

Insurance general agents

The insurance general agent is closely related to the company(ies) he or she is working and can be
considered as a sort of representative of the company(ies) in his or her territory/district. The contracts
concluded between the parties often provide for a right of the insurer to give instructions to the agent (for
example, with respect to the commercial or marketing policy that the company wishes to implement) (see J.
Bigot, D. Langé, Traité de droit des assurances, L’intermédiation d’assurance, LGDJ, No. 569 et seq.).

The insurance general agent runs – legally speaking – an independent activity (article 1 of the status of 1996).
He or she is an independent worker and not an employee of the company (J. Bigot, D. Langé, Traité de droit
des assurances, L’intermédiation d’assurance, LGDJ, p. 426).

As far as the ‘principal-agent model’ is concerned, it shall be underlined that the contract concluded by the
agent with the insurance company is referred to as an ‘agency contract’ by French law (see Article A. 512-1 of
FIC). This type of contract should, theoretically, give the former the authority to perform acts on the latter’s
behalf.

Actually, the authority given to the agent will depend on the terms and conditions of the contract concluded
with the insurer. The contract can provide for a power to conclude insurance contracts with the clients on
behalf of the company, but it is not necessarily the case (J. Bigot, D. Langé, Traité de droit des assurances,
L’intermédiation d’assurance, LGDJ, No. 547).

Insurance agents

The Insurance agent is also the representative of an insurance company and acts as its agent. However, his
or her degree of dependence on the insurer will depend on the terms and conditions of the contract agreed
between the parties. The contract will determine, as an example, if the agent is bound by an exclusivity
agreement (J. Kullmann (dir.), Lamy Assurances, No. 4823).

The insurance agent necessarily runs an independent activity and is not an employee of the insurance
company (according to Article 5. 511-2, the agent can either act as a self-employed person, or as a legal
person).

3.4.1.4 What type of organisation does the agent have? Can he have staff working for him (eg, sub-
agents)?

Since the adoption of the regulatory status of 1996 and of the federal convention of 16 April 1996, insurance
general agents can choose between carrying out their activity as self-employed workers or in the form of a
legal person by creating a corporation.

By contrast, insurance general agents submitted to the status of 1949 and 1950 can exclusively (with some
restrictive exceptions) act as self-employed workers (Articles 2 and 33 of the status of 1949; Articles 2 and 27
of the status of 1950) and are not allowed to create a corporation.

As a consequence, the agent can recruit employees and/or sub-agents. The latter will be subject to the legal
status of the agents of insurance intermediaries provided for by Article R. 511-2 of FIC (see 3.1 above; see
also J. Bigot, D. Langé, Traité de droit des assurances, L’intermédiation d’assurance, LGDJ, pp. 455-458).

3.4.1.5 Is the relationship between the insurer and the agent regulated by a collective bargaining
agreement? If yes, what does it mainly cover? Can the relationship be exclusive to a particular
area? Is the remuneration established by the collective bargaining agreement? Can the
provisions be waived by the parties’ mutual agreement?

Insurance general agents

a) The regime applicable to the agents subject to the statuses of 1949 and 1950 is exclusively defined by the
regulatory rules provided for by these statuses. No collective-bargaining agreement is applicable to the
relationship between these agents and their insurance company.

b) By contrast, when the status of insurance general agents was reformed in 1996, it was decided to give
more freedom to professional organisations and let them determine the rules governing their own activity.

As a consequence, the activity of insurance general agents subject to the status of 1996 is partially regulated
by professional rules:

 the federal convention of 16 April 1996 concluded between the FFSA and the FNSAGA is applicable
to all insurances general agents; and

 in addition, collective bargaining agreements concluded at company-level between insurance

companies and the syndicates of their agents determine in more detail the rules applicable to the
relationships between the agents and the company concerned.

c) The rules provided for by the federal convention and agreements concluded at company-level have a
binding force for the agents and the companies (Article 2 of the decree of 15 October 1996).

The agency contract concluded between the general agent and its insurance company cannot waive the rules
laid down in the federal convention and the agreements concluded at company-level, except when the
contract provides for terms that are more favourable to the agent (J. Bigot, D. Langé, Traité de droit des
st
assurances, L’intermédiation d’assurance, LGDJ, No. 492; Cour de cassation, 1 civ., 16 January 2007,
appeal on a point of law No. 05-14746).

d) While the federal convention sets the main principles governing the relationship between the agent and its
company, agreements concluded at company-level determine in more detail the rules applicable to the
agent’s activity, including (but not limited to) rules applicable to:

 the agent’s remuneration (in particular the type of remuneration he or she is entitled to);
 the calculation of the indemnity he or she is entitled to when ceasing his or her activity;
 the cancellation of the agency contract;
 the insurance covering the agent’s professional liability; and
 the standards of professional conduct applicable between the agents and the clients.

As far as the remuneration of the agent is concerned, it shall be underlined that a collective bargaining
agreement may only determine how the agent can be remunerated (ie, the type of remuneration he or she is
entitled to). The level of remuneration itself will be agreed between the parties in the agency contract (J.
Kullmann (dir.), Lamy Assurances, No. 4766).

e) As far as territorial exclusivity is concerned, agents subject to the status of 1949 (property and casualty
insurance) benefit from a right of exclusivity with respect to the distribution of the products of the insurer on
their territory (Articles 14 and 15 of the status of 1949).

By contrast, the status of 1950 (life insurance) does not provide for a right of exclusivity in favour of the agent.
However, the agency contract concluded with the company often provided for such a right (J. Bigot, D. Langé,
Traité de droit des assurances, L’intermédiation d’assurance, LGDJ, No. 557).
Lastly, the status of 1996 and the federal convention do not provide for any territorial exclusivity in favour of
the agent. Collective bargaining agreements might – at most – regulate the competition between the agents
acting on behalf of the same insurance company in a specific territory (eg, by restricting the right of the
company to appoint new agents in a given territory; see J. Bigot, D. Langé, Traité de droit des assurances,
L’intermédiation d’assurance, LGDJ, No. 562)

Insurance agents

As mentioned above, the activity of insurance agents is regulated by general agency law and by the
contractual provisions agreed with the insurance company (J. Kullmann (dir.), Lamy Assurances, No. 4823).
There are no collective bargaining agreements applicable to insurance agents.

3.4.1.6 Does the termination of the work relationship between the agent and insurer provide for the
agent’s obligation to return the portfolio of contracts? In such a case, would the agent be
entitled to an indemnity?

Insurance general agents

In principle, the insurance company is the owner of the client’s portfolio. As a consequence, the agent has the
duty to return it at the termination of the relationship with the insurance company (J. Bigot, D. Langé, Traité de
droit des assurances, L’intermédiation d’assurance, LGDJ, No. 672).

However, since the agent generally helped the insurer to increase the portfolio throughout the relationship, the
insurance agent is granted with certain rights with respect to the client’s portfolio at the termination of the
relationship. More precisely, when the agent ceases his or her activity, he or she has a choice between:

 designating a successor to the company (and transferring, against remuneration, his or her contract to
his successor); or
 being paid an indemnity equal to the value of his or her client’s portfolio, should he or she not wish to
designate a successor, or should the company not approve the successor designated by the agent
(see Article 20 of the status of 1949; Article 17 of the status of 1950; section II-D,5 of the federal
convention of 1996).

On the other hand, when the agent ceases his or her activity, he or she (except if the agent is subject to the
status of 1950) is not allowed to sell insurance products on the territory where he or she used to carry out his
or her activity for a period of three years (section II-D, 5-c of the convention of 16 April 1996; Article 26 of the
status of 1949). This period is reduced to six months when the agent waives his or her right of indemnity
(Article 26 of the status of 1949; section II-D, 5-c of the convention of 16 April 1996).

Insurance agents

The termination of the work relationship between the agent and the company is regulated by the provisions of
the contract. The contract may provide for a non-compete clause, which results, de facto, in an obligation of
the agent to return the portfolio of clients. The contract can also provide for an indemnity for the termination of
the work relationship (J. Kullmann (dir.), Lamy Assurances, No. 4823).

3.4.2 The broker

3.4.2.1 Please describe the broker’s services. In general terms, do the services consist of
intermediation or are they similar to consultancy/advisory activities? Is the broker an
independent actor?

Under Article R. 511-2 of FIC the broker is an Insurance Intermediary subject to the specific regime defined in
Articles L. 512-1 et seq. and R. 512-1 et seq. of FIC and, in particular, to the obligation to register with the
ORIAS. In principle, brokers act on behalf of the insured.
Their function is to place the risks of their client with insurance companies at the best conditions and at the
best available price in the market (J. Kullmann (dir.), Lamy Assurances, No. 4806 et seq.). However, French
law does not prohibit brokers from carrying out other types of activities for their clients such as monitoring the
execution of the insurance contract (eg, in the case of a loss), risk management and advisory or audit activity
in insurance (J. Kullmann (dir.), Lamy Assurances, No. 4796 et seq.).

Brokers are – legally speaking – independent from insurance companies. As stated earlier, they are not
allowed to enter into an exclusivity agreement with one or more insurance companies (Article L. 520-1-II of
FIC; see Daniel Langé, Jcl. Responsabilité civile et assurance, fasc. 640, 18).

Even though brokers act, in principle, on behalf of the insured and are – legally speaking –independent from
insurers, it shall be underlined that some of them may have a close relationship with one or more insurance
companies. French law does not prohibit brokers from concluding contracts with insurances companies
(provided that the contract does not provide for any exclusivity). These contracts are often concluded by the
broker with the insurers in order to regulate their work relationship. Sometimes, the broker may also conclude
an agency contract with the insurer giving the former the authority to monitor, on behalf of the latter, the
execution of the insurance contracts concluded with the insured (eg, receiving the payment of the insurance
premiums, or paying the insurance indemnities in the event of a loss) (see. J. Kullmann (dir.), Lamy
Assurances, No. 4803, 4809).

The insurer might even conclude an agency contract with the broker giving him or her the authority to
distribute insurance products on their behalf (J. Bigot, D. Langé, Traité de droit des assurances,
L’intermédiation d’assurance, LGDJ, No. 1031).

To conclude, even though the broker is prohibited from concluding an exclusivity agreement with an insurer,
and is supposed to act on behalf of the insured, his or her level of independence can vary significantly
depending on the provisions of the contract concluded with the insurer(s).

3.4.2.2 Who pays for the broker’s remuneration (please specify case by case for the different services,
if any)? Is the broker allowed to retrocede a portion of his remuneration to the insurer or to the
insured?

Brokers are remunerated by the insurers, although acting (in principle) on behalf of the insured (J. Bigot, D.
Langé, Traité de droit des assurances, L’intermédiation d’assurance, LGDJ, No. 423).

The relationships between brokers and insurers are partially regulated by professional practices that, over
time, have acquired the force of law. In particular, a syndicate of brokers (Syndicat national des courtiers
d’assurance) made an inventory of the professional practices between insurers and brokers in 1935 and
published them. These professional practices are applied by French courts as rules of law (Court of appeal of
Douai, 9 September 2013, No. 10/04065; Commercial Court of Périgueux, 28 April 2003, No. 2002/2857;
Court of appeal of Agen, 22 January 1952, Vielmas c. L’Urbaine et La Seine; J. Bigot, D. Langé, Traité de
droit des assurances, L’intermédiation d’assurance, LGDJ, No. 786).

With respect to the remuneration, the abovementioned professional practices provide for a right of the brokers
to be remunerated through commissions on the premiums generated to the benefit of the insurance company
(see Article 3 of the professional practices published by the Syndicat national des courtiers d’assurance; J.
Bigot, D. Langé, Traité de droit des assurances, L’intermédiation d’assurance, LGDJ, No. 423; see also:
J. Kullmann (dir.), Lamy Assurances, No. 4801).

When he or she provides other services (ie, other than risk placement) to an insured (audit, risk management
etc.) or to an insurance company (monitoring the execution of a contract), the broker will logically be paid by
the insured or the company to which he or she provides services to (J. Kullmann (dir.), Lamy Assurances, No.
4805).

According to Article R. 511-3 of FIC, the insurance intermediary is exclusively allowed to retrocede of portion
of his or her remuneration to another Insurance Intermediary. The intermediary cannot retrocede it to anyone
else as a consequence (J. Bigot, D. Langé, Traité de droit des assurances, L’intermédiation d’assurance,
LGDJ, No. 421).
3.4.3 Banks, financial intermediaries, financial advisers and others allowed to act as insurance
intermediaries

3.4.3.1 Can banks, financial intermediaries and/or financial advisers act as insurance intermediaries?

a) Banks are not only allowed to carry out banking/financial activities in France, but can also carry out other
activities either related or not related to their main banking activity (J. Bigot, D. Langé, Traité de droit des
assurances, L’intermédiation d’assurance, LGDJ, No. 865 et seq.).

Banks can thus distribute insurance products. However, such an activity shall be carried out in accordance
with insurance law and, in particular, the rules governing the insurance intermediation activity.

Banks cannot benefit from the exception provided in Article R. 513-1 of FIC, allowing some persons to
distribute insurance products as an ancillary activity without registering with the ORIAS.

As a consequence, a bank distributing insurance products must register as an insurance intermediary with the
ORIAS and will be subject to the specific rules provided for by Articles L. 512-1 et seq. and R. 512-1 et seq. of
FIC (including the obligation for the management to be of good repute, the obligation to have professional
indemnity insurance and the obligation to lodge a financial guarantee, etc; see section 2.1 above; Daniel
Langé, Jcl. Responsabilité civile et assurance, fasc. 630, No. 48).

The bank will have to choose between one of the categories of intermediaries listed in Article R. 511-2 of FIC
to carry out its activity (eg, insurance agents, insurance general agent, brokers, etc).

b) The regime applicable to brokers is not compatible with the intermediation activity carried out by most of the
banks. Banks often sell insurances as a complement to a loan or another financial service. For this purpose,
they either conclude a group insurance agreement with an insurer (and propose to their clients to subscribe to
this agreement) or distribute the products of one of their own insurance subsidiary.

For this reason, many banks prefer to register as insurance agents whose regime is more compatible with
their activity (the agent is a representative of an insurance company and there is the possibility to provide for
an exclusivity agreement – see 3.4.2 above)

c) To our knowledge, nothing in French law prohibits financial intermediaries or financial advisers (see 3.4.3.3
and 3.4.3.4 below) from distributing insurance products. However, as is the case for banks, if they wish to
distribute insurance products, they will have to register with the ORIAS as insurance intermediaries and will be
subject to the specific conditions provided for by Article L. 512-1 et seq. and Article R. 512-1 et seq. of FIC.

3.4.3.2 Please define a financial intermediary. Are there particular requisites for the profession of
financial intermediary? Does the financial intermediary have to be enrolled in another register
(eg, a register of financial intermediaries)?

a) There is no legal definition of financial intermediaries in France. In regard to financial intermediation and the
distribution of financial products, several persons can be considered as financial intermediaries, including (but
not limited to): investment services providers as defined in Article L. 531-1 of the French Monetary and
Financial Code (‘MFC’); intermediaries selling banking products and payment services as defined in Article
L. 519-1 of MFC; and intermediaries specialised in crowdfunding as defined in Article L. 548-1 of MFC.

b) According to Article L. 532-1 of MFC, investment services providers shall (with some exceptions) obtain an
authorisation from either the ACP (Autorité de Contrôle Prudentiel – Prudential Supervisory Authority) or the
AMF (Autorité des Marchés Financiers – Financial Market Authority) depending on the regime applicable.

Intermediaries selling banking products and payment services, as well as intermediaries specialised in
crowdfunding shall register with another section of the ORIAS (Article L. 546-1).

c) In order to be authorised, financial intermediaries have to meet several, legal, financial and professional
requirements.

In any case, when a financial intermediary wishes to carry out insurance intermediation, these requisites do
not have any relevance since, as stated above, he or she will have to register as an insurance intermediary
and will be subject to the specific requirements provided for by Article L. 512-1 et seq. and Article R. 512-1 et
seq. of FIC.

3.4.3.3.Please define a financial adviser. Are there particular requisites for the profession of financial
adviser? Does the financial adviser have to be enrolled in another register (eg, a register of
financial advisers)?

There is no legal definition of ‘financial adviser’ in France. In regard to advisers providing advice on financial
operations, several persons can be considered as financial advisers, including (but not limited to): investment
services providers as defined in Article L. 531-1 of MFC (since the definition of investment services provided
in Article L. 321-1 of MFC includes providing investment advice); financial investment advisers as defined in
Article L. 541-2 of MFC as persons who provide, as a regular activity, advice on investments or other financial
operations; and advisers specialised in crowdfunding defined in Article L. 547-1 of MFC.

In any case, when a financial adviser wishes to carry out insurance intermediation, the requisites applicable
for his/her profession of financial adviser do not have any relevance since, as stated above, he or she will
have to register as an insurance intermediary and will be subject to the specific requirements provided for by
Article L. 512-1 et seq. and Article R. 512-1 et seq. of FIC.

3.4.3.4 Can financial intermediaries and/or financial advisers distribute any insurance and/or financial
products? If yes, under what conditions or with what limitations?

See 3.4.3.1 above

3.4.3.5 With reference to insurance intermediaries other than agents, brokers, banks, financial
intermediaries and financial advisers, as indicated under question 2.1 above (if any), please
describe what kind of products they can distribute and under what conditions.

The other insurance intermediaries listed in Article R. 511-2 of FIC allowed to distribute insurance products in
France are:

 Intermediary of insurance intermediaries, who can distribute insurance products under the conditions
outlined in 3.3 above;

 intermediaries registered in another EU or EEA Member State who can distribute insurance products
under the conditions outlined in 2.3 above; and

 employees of insurance intermediaries, who distribute insurance products on behalf of their employer
and are considered as insurance intermediaries themselves, but do not have to register with the
ORIAS and are not subject to the conditions provided by Article L. 512-1 et seq. and Article R. 512-1
et seq. of FIC (see 2.1 above).

4. Rules of conduct and responsibilities

4.1 Are there rules of conduct that insurance intermediaries should comply with (eg, duties in
relation to the obligation of utmost care, correctness, utmost good faith, information,
adequacy, transparency, conflict of interests, filing of documentation, separate accounting or
other accounting obligations)? Please describe the above duties, specifying if they apply to all
the different insurance intermediaries (eg, agents, brokers, banks, financial intermediaries,
financial advisers, etc) and whether the content differs – with particular reference to
responsibility – according to the type of actor/activity and person (insurer or insured)
receiving the activity.

There is no general code of conduct applicable to all insurance intermediaries in France.

French law exclusively provides for:

 a duty of the insurance intermediary to disclose some information on his or her activity to his/her
clients;
  information obligations and a duty to advise his/her client with respect to the insurance products he or
she distributes.

Additionally, the professional organisations of some insurance intermediaries (eg, insurance general agents,
brokers, etc) have established rules of conduct applicable to their professions.

Information on the activity of the insurance intermediary

Insurance Intermediaries have a duty to provide information on their identity and their activities to their client.

Additionally, even though French law does not provide for a general rule of conduct applicable to conflict of
interests, it requires Insurance Intermediaries to provide, where appropriate, information on the contractual or
financial links that they may have with one or more insurers.

More precisely, before the conclusion of a first insurance contract by his or her client, the insurance
intermediary has to provide (Articles L. 520-1 and R. 520-1 of FIC):

 information on his or her identity (name, corporate name, professional address, number of registration
with the ORIAS, etc);
 information on existing capital links with one or several insurers; the intermediary has to indicate to his
or her client if he or she owns (either directly or indirectly) more than ten per cent of the share capital
or of the voting rights of an insurer, or if an insurer owns (either directly or indirectly) more than ten
per cent of his or her voting rights or share capital;
 if applicable, the contact details of its claim service.

In addition, French law provides for information obligations that are specific to some categories of insurance
intermediaries (Articles L. 520-1 and R. 520-1 of FIC):

 insurance intermediaries that are bound by an exclusivity agreement with one or more insurers
(applicable to insurance general agents and insurance agents) or work only with a limited number of
insurers (applicable to insurance agents or brokers) shall provide to their client, if requested, the
name of this(these) insurer(s) before the conclusion of the insurance contract by the client;

 brokers that provide to their clients a service consisting in objectively prospecting the insurance
market in order to place the risk at the best conditions available shall:

o before the conclusion of a first insurance contract with the client, provide, if applicable,
the name of any insurer with which they have made, with respect to their intermediation
activity, more than one third of their turnover in the past year;

o before the conclusion of any contract, when the insurance contract is concluded by the
client to cover his or her professional activities and the expected annual premium is
higher than €20,000, provide information on the commission that they are going to
receive from the insurer for the conclusion of that contract.

The information mentioned above must be clear and not misleading and shall be provided to the client in
writing (Article R. 520-2 of FIC).

The above listed information obligations are, however, not applicable to the insurance of major risks or to
reinsurance operations (Article L. 520-2 of FIC), since the client of the intermediary will certainly, in these
cases, be a professional who can access to the services of in-house counsel of third party advisers.

Information obligations and duty to advise the client

Even though French law does not provide for a general duty of utmost care, it imposes an information
obligation and a duty to advise the client on the insurance intermediary.

a) French case law progressively imposed information obligations on insurance intermediaries in respect of
the insurance contracts they distribute.
Insurance intermediaries have a duty to inform the client of the coverage conditions of the contract, the
solvency of the insurer and the necessity to provide the insurer with a comprehensive and detailed risk
statement etc. (see J. Bigot, D. Langé, Traité de droit des assurances, L’intermédiation d’assurance, LGDJ,
No. 1081).

b) Insurance intermediaries are also subject to a duty to advise the client with respect to his or her needs in
terms of insurance coverage (see J. Bigot, D. Langé, Traité de droit des assurances, L’intermédiation
d’assurance, LGDJ, No. 1099).

In particular, according to Article L. 520-1 of FIC, insurance intermediaries shall, before the conclusion of the
insurance contract by the client, inform the latter of:

 his or her requirements and needs in terms of insurance coverage; and

 the reasons that lead the intermediary to recommend the conclusion of a specific insurance contract.

This information must be clear and not misleading and shall be provided to the client in writing (Article R. 520-
2 of FIC).

Article L. 520-1 of FIC is not applicable to the insurance of major risks or to reinsurance operations.

Insurance intermediaries also have the obligation to advise and assist their clients in the preparation of the
risk statement, which implies that the intermediary has a duty to ask all relevant questions to the insured in
order to help him or her to disclose all relevant information to the insurance company (J. Bigot, D. Langé,
Traité de droit des assurances, L’intermédiation d’assurance, LGDJ, No. 1116).

Rules of conduct defined by professional organisations

There is no general code of conduct applicable to insurance general agents. It shall be underlined, however,
that the federal convention of 16 April 1996 provides that agreements concluded at company-level between
insurers and the syndicates of their agents can set rules of conduct applicable to the agents.

The national syndicate of brokers (Chambre Syndical des Courtiers d’Assurance, CSCA) has adopted a code
of good conduct that provides for standards of conduct but is not binding (J. Kullmann (dir.), Lamy
Assurances, No. 4796 et seq.).

This code provides for three types of duties for the broker:

 the duties of the broker towards his or her client: the broker shall assist and advise his or her clients
as necessary, respect the confidentiality of all information received from him or her and make the
necessary efforts to place the risks at the best conditions and at the best available price;

 the duties of the broker towards insurance companies: the broker shall behave in good faith and
provide the insurer with all elements that are necessary to assess the risk that the broker wishes to
place;

 the duties of the brokers towards other insurance brokers: the code prohibits any act of
disparagement or unfair competition.

4.2 Does the insurance intermediary represent the insurer? By way of example, is the agent also
the insurer’s representative vis-à-vis the customer, and if so, does this also apply during trial
before a court? Is there a matter of imputation of knowledge? What happens when a broker
has information on matters relevant to the insurer’s decision to insure which the broker fails to
disclose to the insurer? Is the insured deemed to have breached its duty of disclosure in such
circumstances? In which cases? Can the insurance intermediary be accountable for the
contracts he executed on behalf of the insurer?

a) The insurance intermediary is the representative of the insurer only if he or she has concluded an agency
contract, that is, a contract giving him or her authority to accomplish act on behalf of the insurer.
As mentioned before, insurance general agents and insurance agents are, in principle, granted such an
authority. It is, however, not always the case: the insurance company might, for example, prefer not to grant
the right to the agent to conclude insurance contracts on its behalf (see 3.4.1.4). Brokers, although they are
supposed to represent the insured, can be granted the authority to act on behalf of the insurer, to receive the
payment of premiums, pay the insurance indemnity or even conclude insurance contracts (see above,
3.4.2.1).

b) The insurance company will be bound by the acts accomplished by the intermediary, provided that it gave
him or her authority to perform this act on its behalf.

On the contrary, if the intermediary has not been given such an authority, the insurer will not be bound. By
way of exception, the insurer can be bound under these circumstances in application of the theory of apparent
agency (Theorie du mandat apparent): when the intermediary acted as the apparent agent of the insurer (ie,
when the intermediary acted towards the insured as if he or she had been granted a power of attorney), the
insurer will be bound by the acts of the intermediary towards the insured, provided the insured legitimately
assumed that the intermediary had been given a power of attorney and relied on this assumption (Daniel
Langé, Jcl. Responsabilité civile et assurance, fasc. 630, No. 175).

The insurer will only be bound if the insured legitimately thought that the intermediary was its agent, that is, if
the insured could reasonably think that it was the case. When the insured should have known that the
intermediary was not granted a power of attorney, the insurance contract cannot be considered as concluded
(Daniel Langé, Jcl. Responsabilité civile et assurance, fasc. 630, No. 175 et seq.)

c) When the intermediary has been granted a power of attorney (or can be considered as an apparent agent)
and is, as a consequence, the representative of the insurer, the information provided to the intermediary is
considered as having been provided to the insurance company itself.

By way of example:

 if the insured provided a comprehensive statement of risk to the intermediary/agent, the insurer
cannot argue that he or she did not declare the risk, even if the information was not transmitted to the
insurer by the intermediary. The insurer cannot argue that the contract is void (Cour de cassation, 19
May 1999, appeal on a point of law No. 97-14120; Daniel Langé, Jcl. Responsabilité civile et
assurance, fasc. 630, No. 170 et seq.);

 if the insured notified a loss to the intermediary/insured under the insurance contract, the loss shall be
considered as having been notified to the insurer as well (Daniel Langé, Jcl. Responsabilité civile et
assurance, fasc. 630, No. 171).

d) When the intermediary executes the insurance contract on behalf of the insurer, he or she can be held
accountable if he or she committed negligence. In this case, the intermediary will be liable either to the
insured or the insurer (see 4.3 below).

4.3 Is the insurer jointly liable for damages caused by the insurance intermediary, appointed by
the same, when executing intermediary activities? Who is liable vis-à-vis the insured person?
Is it always the intermediary or the insurer?

The insurance intermediary is liable towards the insured of any loss resulting from an act of negligence he or
she committed when carrying out his or her activity (J. Bigot, D. Langé, Traité de droit des assurances,
L’intermédiation d’assurance, LGDJ, No. 1060 et seq.). The intermediary will be liable even if he or she acted
on behalf of the insurer (Cour de cassation, 10 December 2010, appeal on a point of law No. 99-15180).

Moreover, insurers are liable towards the insured, under Article L. 511-1 of FIC, of the acts of negligence
committed by their employees and agents.

Provided that the intermediary had been granted a power of attorney and was acting as the agent of the
insurer, the latter will thus be held jointly liable with the insurance intermediary for the acts committed on its
behalf (J. Bigot, D. Langé, Traité de droit des assurances, L’intermédiation d’assurance, LGDJ, No. 1027).
Depending on the provisions of the contract binding the insurer and the intermediary (ie, whether the contract
gave the intermediary the power to act as an agent of the insurer or it not give him that power), both the
insurance company and the intermediary, or solely the intermediary, will be liable towards the insured for the
negligence committed by the intermediary.

4.4 Are there particular regulations or specific forms of compensation for damages caused to the
insured person?

There are no specific forms of compensation for the damages caused to an insured person by an insurance
intermediary under French law.

The general law of obligations is applicable to the claim of the insured against the insurer or the intermediary:
the insured will be compensated for the damage suffered in consequence of the negligence committed,
provided that he or she can prove the existence of a damage (J. Bigot, D. Langé, Traité de droit des
assurances, L’intermédiation d’assurance, LGDJ, No. 1178).

5. Supervision and sanctions

5.1 Regardless of the requirement of an authorisation and/or enrolment, are insurance

intermediaries subject to the control of supervisory bodies? Does the supervisory body have
powers/duties of prudential supervision on the insurance intermediary’s activities, and if so, in
what way does it act?

As mentioned above, insurance intermediaries are subject to the control of the ACPR (Autorité de Contrôle
Prudentiel et de Résolution), a competent supervisory body in France that controls the insurance and banking
sectors (Article 612-2 of MFC).

The control of insurance intermediaries by the ACPR can be described as an optional and punctual control, in
12
contrast with the permanent control to which insurance companies are submitted.

The ACPR can control the compliance of the insurance intermediary with all legislative and regulatory rules
applicable to his/her activity (eg, enrolment with the ORIAS, obligation to be of good repute, duty to contract a
professional insurance, information obligations and duty to advise the clients, etc) (A.D. Merville,
Encyclopédie Joly Bourse, Autorité de contrôle prudentiel et de résolution, as examples of such control see:
ACPR, decision No. 2010-02, 28 February 2011; ACPR, decision No. 2012-02, 12 December 2012; ACPR,
decision No. 2014-02, 17 juillet 2014).

The ACPR only controls the fulfilment by the insurance intermediaries of their statutory and regulatory
obligations. Since insurance intermediaries are not subject to the same prudential obligations as insurers and
banks (solvency ratio, reserve ratio, etc), there is no similar prudential supervision of insurance intermediaries
by the ACPR.

5.2 Are there fines for violations of the insurance intermediaries’ obligations? If so, please
describe.

French law provides for two types of sanctions that can be imposed on an insurance intermediary not
complying with its obligations:

 disciplinary sanctions, that may be imposed by the ACPR and

 criminal sanctions.

Disciplinary sanctions

After having controlled an insurance intermediary, the ACPR can impose disciplinary sanctions on the latter
(and/or its management) (Article 612-41 of MFC) including (but not limited to):

 a warning;

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http://acpr.banque-france.fr/vous-etes/intermediaires/intermediaires-dassurance/foire-aux-questions.html.
  a reprimand;
 prohibition of the Insurance Intermediary from carrying out his or her activity for a period up to ten
years; and
 removal of the insurance intermediary from the register held by the ORIAS;
 a fine that can amount to €1m.

Criminal sanctions

The non-compliance with the requirements provided for in Articles L. 512-1 to L. 512-8 of FIC (duty to register,
good repute, professional capacity requirements, professional insurance and financial guarantee) is punished
by:

 imprisonment up to two years;

 a fine that can amount to €6,000.

5.3 Do sanctions also apply to foreign intermediaries who operate in your country?

EU/EEA insurance intermediaries

As far as registration requirements are concerned, insurance intermediaries established in another EU or EEA
are, in accordance with EU directive 2002/92, exclusively subject to the supervision of the authorities of their
home state.

As mentioned earlier, apart from registration requirements, French mandatory overriding provisions are
applicable to the activity of EU/EEA insurance intermediaries (see 2.3 above).

French law provides that the ACPR can control insurance intermediaries and does not make any distinction
between French insurance intermediaries and insurance intermediaries from EU/EEA countries. Logically, the
ACPR should be allowed to control the latter as well, with respect to their activity in France (Article 612-2 of
MFC) and sanction them if they do not comply with the provisions of French law that are applicable to their
activity. However, we are not aware of any decision of the ACPR that sanctioned an EU/EEA insurance
intermediary in such a case.

Intermediaries originating in a non-EU/non-EEA country

Apart from the European intermediaries mentioned above, French law does not allow any other foreign
intermediary to carry out his or her activity in France without being first registered with the ORIAS.

These intermediaries shall register with the ORIAS and should, logically, be subject to the control of the
ACPR. However, to our knowledge, the ACPR has never imposed a sanction on a foreign intermediary.

5.4 Is there a consultation procedure with the insurance intermediary before the fine is applied?

There is not really a consultation procedure with the insurance intermediary before the disciplinary sanction is
applied by the ACPR, but the procedure followed by the ACPR shall be conducted in compliance with the
adversarial principle and give the possibility to the insurance intermediaries to be heard (Article 612-39 of
MFC).

As far as criminal sanctions are concerned, they can exclusively be imposed by a court, that is, after a judicial
procedure conducted in accordance with the adversarial principle.

5.5 Could the application of more fines, or the breach of particular regulations, result in the
revocation of the authorisation, or in the intermediary being struck off the register (if any), or
in the prohibition to act as an insurance intermediary? If yes, which are the most relevant
circumstances?

For the sanctions applicable to the insurance intermediary 5.2 above.

French law does not provide for any criteria with respect to the imposition of the sanctions listed in Article 612-
41 of MFC listed above (see 5.3 above).

When conducting a control, the ACPR will verify the compliance of the insurance intermediary with all
applicable legal and regulatory rules to which he or she is submitted.