On 29 July 2022, the Commissariat aux Assurances (“CAA”) published a new circular letter (the “22/15 Circular”) setting out regulatory requirements for the composition and functioning of the board of directors of insurance and reinsurance undertakings.
The 22/15 Circular applies to the following entities:
- insurance and reinsurance undertakings supervised by the CAA, with the exception of:
- captive insurance undertakings;
- captive reinsurance undertakings; and
- non-captive reinsurance undertakings with gross annual premiums of less than EUR 100 million;
- insurance holding companies and mixed financial holding companies at the head of a group supervised by the CAA
(collectively referred to as “Undertakings”).
The 22/15 Circular applies to the administrative, management and supervisory bodies of Undertakings; i.e. the board of directors in monistic governance structures.
The 22/15 Circular specifies that it does not apply to the authorised manger (dirigeant agréé) of insurance and reinsurance undertakings as such – unless the authorised manager is simultaneously a board member.
2. Key requirements
The 22/15 Circular provides for the following key categories of rules:
- requirements for the collective and individual suitability criteria that Undertakings must meet;
- definitions of the concepts of independent director (administrateur indépendant) and non-executive director (administrateur non-exécutif);
- conditions under which a legal person may be appointed as a director;
- mandatory provisions that Undertakings’ articles of association must include;
- requirements to notify the CAA of planned changes to board composition (e. appointments or departures);
- details on board functioning and how board meetings must be held and documented;
- details on the board’s various duties and tasks;
- documents requiring formal board approval or of which the board must receive copies, and on which it must take action;
- requirements for using specialist committees
3. Key dates
The key dates for the application of the 22/15 Circular are:
- 30 September 2022
- repeal date of the following existing CAA circular letters:
o Circular letter 96/1 on the supervision of directors of direct insurance undertakings;
o Circular letter 99/1 on the composition and functioning of the boards of directors of direct insurance undertakings;
o Circular letter 02/8 on the supervision of directors of reinsurance undertakings;
- date of application of the provisions of the 22/15 Circular on changes to board composition.
- 31 March 2023
- date of application of the rules of the 22/15 Circular governing:
o board composition;
o the mandatory provisions to be included in Undertakings’ articles of association;
- date by which each Undertaking must have documented an assessment of its overall governance system.
Insurance holding companies and mixed financial holding companies at the head of a group supervised by the CAA:
Insurance holding company or a mixed financial holding company as defined in Article 184, points 6 and 7, of the law of 7 December 2015 on the insurance sector, as amended (i.e. respectively: a parent undertaking which is not a mixed financial holding company and the main business of which is to acquire and hold participations in subsidiary undertakings, where those subsidiary undertakings are exclusively or mainly insurance or reinsurance undertakings, or third-country insurance or reinsurance undertakings, at least one of such subsidiary undertakings being an insurance or reinsurance undertaking of the EEA; and a parent undertaking, other than an insurance undertaking, a third-country insurance undertaking, a reinsurance undertaking, a third-country reinsurance undertaking, an insurance holding company or a mixed financial holding company, which includes at least one insurance or reinsurance undertaking among its subsidiary undertakings of the EEA).