Generally speaking, the French insurance and reinsurance market is doing well, despite the surrounding economical and financial environment. Indeed, while the latest available year-end results show a slight decline (€9.5 billion in 2016, compared to €10.7 billion in 2015), French insurers are nonetheless making large investments in the real economy: in 2016, investment in companies emanating from the insurance industry had reached €2,350 billion (i.e., 59 per cent of insurers' assets).2


i The insurance regulator

An independent administrative authority, the French Prudential Supervision and Resolution Authority (ACPR), was created by Ordinance No. 2010-76 of 21 January 2010, modified by Law No. 2013-672 of 26 July 2013, to license and supervise banking, insurance and reinsurance activities. Its aim is to provide more effective regulation of these sectors. This new authority combines two roles, namely:

  1. overseeing insurance policies written by insurers; and
  2. issuing general rules and guidelines (by way of circulars, decrees, etc.) regarding banking, insurance and reinsurance activities.
ii Position of non-admitted insurers

Non-admitted insurers cannot do business in France, on pain of the sanctions set out in Article L310-26 et seq. of the French Insurance Code (FIC), which include fines (from €4,500 to €375,000) and may go as far as having the offending company wound up.

iii Requirements for authorisation

In order for a new insurance or reinsurance company to be authorised to write insurance or reinsurance in France, it must comply with the licensing procedure prescribed in FIC Articles L321-1 to L321-3 and R321-1 to R321-5. A licence may be granted conditionally or unconditionally, or refused, by the ACPR, which bases its decision on the following criteria:

  1. the extent and suitability of the technical and financial means that the applicant plans to implement;
  2. the integrity, expertise and experience of the applicant's managers; and
  3. the applicant's shareholding structure and shareholder status (FIC Article L321-10-1).

In addition, the vast majority of insurance companies operating in France are subject to the Solvency II directive (FIC, Article L310-3-1) and must therefore comply with minimum capital requirements (FIC, Article L.352-5 et seq.), have a governance system that ensures a sound and prudent management, organise regular internal reviews and have an adequate risk management system (FIC, Article L354-1 et seq.).

In the event that the ACPR refuses to grant the licence sought by an applicant, the latter can challenge the regulator's decision before France's highest administrative court, the Conseil d'Etat. Licences are granted to insurance companies for specific classes of business. Applicants must choose among the 26 classes listed in FIC Article R321-1. Insurance companies, unlike reinsurance companies, may not be licensed for both life and non-life business (FIC, Article L321-1[3]).

iv Regulation of individuals employed by insurers, position of brokers and the distribution of products

FIC Articles A512-6 and A512-7 lay down the requirement that insurance company employees and general agents and brokers must hold a master's or bachelor's degree or professional certificate in finance, banking or insurance.

The activity of distributing insurance products is defined in FIC Article L511-1 et seq. and Article R511-1 et seq. France's highest court, the Cour de cassation, has judged that insurance intermediaries, including brokers, are subject to a duty to properly inform and advise policyholders, pursuant to Directive 2002/92/EC 2002. The Court further held that such intermediaries can be vicariously liable to policyholders, pursuant to FIC Article L511-1.3

v Compulsory insurance

Under French law, there are more than 200 instances of compulsory insurance (e.g., employers' liability), which concern a vast array of sectors and activities: automobile; transport; health; housing; real estate; construction; environment; sports; recreational activities; culture; education; training; employment; industrial, agricultural, economic and financial activities; certain regulated professions; property insurance; and life insurance.

vi Compensation and dispute resolution systems (in the context of financial services)

In principle, any natural or legal person may bring a claim before the ordinary courts or, in certain cases, an arbitral tribunal.

By way of exception, since 2014, some authorised consumer associations are allowed to file specific group or class actions against insurers. These types of class actions, which are a recent development within the French legal landscape, were initially limited to non-bodily injuries. Since 2016, however, these actions can now include claims for bodily injuries and their scope has been extended to other fields, such as health products, personal data or discrimination.

The ACPR regulates banks and insurers and, more generally, the distribution of financial products. Although it does not have jurisdiction to hear individual claims, the ACPR has the power to impose fines on insurers that breach statutory provisions or engage in conduct likely to jeopardise the interests of policyholders or the market.

In addition, the Financial Markets Authority (AMF) was established by the Financial Security Act of 1 August 2003 to prevent any malfunction in the financial markets. For this purpose, it is empowered to conduct investigations into professionals operating in these markets, and may impose fines or sanctions for breaches of the AMF General Regulations or professional obligations. It may also organise mediations between individuals and entities through its ombudsman, whose role is to facilitate compensation for losses but does not include the power to impose penalties or award damages.

Lastly, on 16 December 2005, the French Insurance Federation (FFSA, a professional insurance federation that holds the majority of French insurers as members)4 adopted an arbitration convention that is binding on all its members and provides that any disputes between insurers (who are members of the FFSA) regarding the indemnification of a given loss must be brought before an FFSA arbitral tribunal, rather than state courts.

vii Taxation of premiums

The French Insurance Premium Tax (IPT) is regulated under Article 991 et seq. of the General Tax Code and applies to all insurance policies covering risks situated in France.

Insurance companies that are not established in France must be registered with the French tax authorities and appoint a representative responsible for paying IPT.

The rate of IPT varies from 7 per cent to 33 per cent, depending on the insured risk.

viii Proposed changes to the regulatory system and other notable regulated aspects of the industry (e.g., ownership, mergers, capital requirements)

The most important recent change stems from the European directive 2016/97 of 20 January 2016 on insurance distribution. This directive applies to all insurance distribution channels, including insurance companies that sell insurance contracts directly to clients. It sets forth new obligations upon the insurer in relation to a host of subjects, including, distribution, pre-contractual information and professional requirements. The directive must be transposed by 1 July 2018 and will imply substantial changes, in the near future, in the regulation of insurers operating in within the French market.


i Sources of law

The French statutory framework for insurance mainly consists of the FIC, the Mutual Code, the Social Security Code and the Financial and Monetary Code; provisions of other codes, such as the Civil Code, may also apply. French Insurance regulation is, of course, widely influenced by EU legislation. In addition, French case law clarifying insurers' and policyholders' duties can also be considered a source of law.

ii Making the contract

The FIC lays down specific obligations for insurers to provide information and documents both during the pre-contractual phase and during the life of insurance contracts themselves. Pursuant to FIC Article L112-2, prior to the conclusion of the contract, the insurer must provide the policyholder with an information sheet that sets out particulars regarding the premiums owed and the policy limits, the functioning over time of occurrence-based coverage, the functioning over time of claims-based coverage and the consequences of a succession of contracts with different bases for triggering coverage.

The insurer must also provide the insured with a copy of the draft contract and the attachments thereto, or a brochure on the contract precisely describing the coverage and exclusions and the insured's obligations. The draft will not be binding on the insured or the insurer, as only the policy or the cover note will prove their agreement.

These obligations do not apply to insurance contracts covering large risks as defined by FIC Articles L111-6 and Article R112-2.

As regards the information to be furnished by the policyholder to the insurer, Law No. 89-1014 has introduced a system based on the completion of a questionnaire drawn up by the insurer. The duty of disclosure is not, however, confined to the questionnaire and can include any question submitted by the insurer by fax, letter, etc., provided that the insurer can prove that it clearly phrased the question. As a consequence, the policyholder only has a duty to answer the insurer's questions, and is under no obligation to spontaneously disclose information that might be relevant to the insured risk. The policyholder can, however, make spontaneous statements upon taking out the policy, regardless of the absence of any legal duty forcing him or her to do so. In such a case, the policyholder's spontaneous statements must be truthful and accurate, as otherwise the contract could be avoided for fraudulent misrepresentation (FIC, Article L113-8). The information given in relation to a risk at the time of the insurance contract's inception will also determine the scope of the policyholder's continuous duty to disclose all new relevant information to the insurer, pursuant to FIC Article L113-2(3).

Regarding the truthfulness of the information provided by the policyholder (whether upon inception of the insurance contract or during its lifespan), French law makes a distinction between erroneous answers (or absence of disclosure) that are made in:

  1. good faith (FIC, Article L.113-9); or
  2. bad faith (i.e., deliberately – FIC, Article L113-8).

If the misleading information was provided in good faith, the possible indemnity owed will be reduced according to a pro rata calculation based on the premium the insurer would have requested, had he or she been informed of the true nature of the risk. If, on the other hand, the misleading information was provided deliberately and had an impact on the insurer's choice to cover the risk or the price of the premium requested for said cover, then the insurance contract can be deemed to be null and void.

It should be noted, however, that none of these provisions apply to reinsurance contracts (FIC Article L111-1).

iii Interpreting the contract
General rules of interpretation

Article 1192 of the Civil Code provides that terms that are clear and unambiguous are not to be interpreted, so as to avoid distorting the nature of the agreement; this principle also applies to the pre-contractual questionnaire submitted by the insurer to the policyholder (and the policyholders' answers thereto).5

FIC Article L113-1 provides that exclusion clauses must be 'express and limited,' failing which the insurer would be unable to enforce the clause and would have to cover the loss.6 Any exclusion clause that requires interpretation is necessarily found not to comply with FIC Article L113-17 and will, therefore, be deemed unenforceable.

If a clause is unclear or ambiguous, the court will have recourse to the general rules of contract interpretation laid down in Articles 1188 et seq. of the Civil Code, which inter alia provide that 'in case of doubt, a private agreement shall be interpreted against the creditor and favour of the debtor, and the membership agreement shall be interpreted against the party who offered the agreement' (Civil Code, Article 1190).

In the event of contradiction between a clause contained in the general terms and conditions of a contract and a clause contained in the special terms and conditions of the contract, the latter will prevail.8

Finally, with respect to the specific case of insurance offered to consumers or non-professionals, Article L211-1 of the Consumer Code provides that the contract terms 'must be set out and written in a clear and comprehensible manner.' Moreover, 'in case of doubt, they are to be interpreted in the sense which is most favourable to the consumer or non-professional'.9

Incorporation of terms and types of terms in insurance contracts

Insurance contracts must be written in French and in clear print. They must also comply with the requirements of FIC Articles L112-4, L113-15 and R112-1, which respectively provide that the policy must indicate:

  1. the nature of the insured risks, the starting point and period of coverage and the policy limit;
  2. the duration of the contract and the terms applicable to termination; and
  3. the duration of the mutual undertakings made by the parties, the terms of tacit renewal of the policy, the policyholder's duty of disclosure, the two-year limitation period for insurance claims and the causes of interruption of the said period.10
Warranties, conditions precedent and conditions

The policy may stipulate that the contract will only enter into force once certain conditions precedent are satisfied by the insured, such as, for instance, the payment of the first premium.11

The policy may also contain coverage conditions, which should be distinguished from conditions precedent. If such conditions are not satisfied during a certain period of the insurance contract's life, coverage will not be owed for that particular period. Conversely, as soon as the condition in question is satisfied again, coverage would be available from that date onwards. These types of conditions are frequent, for instance, in relation to coverage for breaking and entering or theft,12 where policies will often provide that coverage may only be owed under the contract if certain security measures (such as the presence of a working alarm system) are maintained at all times. Though they may sometimes lead to the same results, coverage conditions are distinct from exclusion clauses and are not, therefore, subject to the obligations of being written in bold characters or drafted in an 'express and limited fashion'.13

iv Intermediaries and the role of the broker
Conduct rules

Insurance intermediaries must meet the integrity and professional-qualification requirements set out in FIC Articles L512-4 and L512-5. For instance, insurance intermediaries must not have been convicted of certain offences. As far as professional qualifications are concerned, brokers need to possess a minimum of experience or receive 150 hours of training. They must also carry professional-liability and financial-bond insurance (FIC, Articles L512-6 and L512-7).

Intermediaries can incur various sanctions, ranging from fines to imprisonment, for breach of statutory requirements, such as, for instance, in the event that the intermediary is not registered (FIC, Articles L514-1–L. 514-4).

Brokers and insurance companies are also bound by brokerage customs and industry practice. Legal commentators are, however, divided and cautious about their qualification as a rule of law and their possible enforcement by or against a third party.

Agency and contracting

Insurance intermediaries must be registered with ORIAS, the organisation in charge of the French Register of Insurance Intermediaries. Registration must be renewed annually and is subject to the payment of a fixed fee.

How brokers operate in practice

Traditionally, brokers provide clients with pre-contractual advice on coverage and premiums.

Brokers are, however, increasingly involved in claims handling. They may, for instance, strive to defend their clients' interests by guiding policyholders from the time of occurrence of a loss and assisting them during the investigation and adjustment of the loss. Brokers may also guide insurers on the choice of party-appointed adjusters.

The extent of a broker's involvement in the handling of a claim mainly depends on the size of the loss. For instance, a claim liable to have a major financial impact will be handled directly by the insurer, but the broker may keep it under close review.

Brokers may also act on the behalf on the insurer, for example by collecting insurance premiums.

v Claims

The insured must give the insurance company notice of any claim that falls within the policy limits and scope of coverage and provide the company with all documents enabling it to appreciate the circumstances of the loss.

Insurance policies cannot impose a specific method of notifying claims; any clause imposing a special method is therefore invalid. The insured should notify the claim as soon as he or she is aware of it and within the time limit, if any, specified in the policy.

Pursuant to FIC Article L113-2, where a policy clause stipulates a specific time limit for the notifications of claims, the insurer may deny coverage of any claim reported outside the time limit in question, provided that:

  1. the delay in reporting has caused the insurer prejudice, inter alia, by increasing the cost of the claim;
  2. the specified time limit for reporting claims is not less than five days; and
  3. the policy's relevant sections appear in bold print and clearly state that late reporting results in forfeiture of coverage.

Generally speaking, there is no duty on the insured to mitigate damage (except in marine insurance); nevertheless, the courts have occasionally found such a duty on the basis of a breach of contract.14 Legal commentators have, however, remained rather cautious on this point, as the duty has neither been clearly defined nor confirmed by further court decisions.

Finally, where the policy so provides in very clear print, fraudulent overstatement of losses can result in forfeiture of coverage, even if the overstatement caused no prejudice to the insurer.


Under French Law, the liability insurer cannot set-off the unpaid premiums upon the indemnity it may be obligated to pay to the third-party victim.15

However, the insurer has a right to assert set-off, including in an insolvency context but only if the right is asserted before the judgment opening insolvency proceedings, under certain conditions. Accordingly, an insurer can set-off premiums owed to it by a policyholder against insurance proceeds owed by it to the policyholder.


For annual policies, the policy limit is automatically reinstated in full on the first day of the next year of insurance. Moreover, the insured or policyholder can request reinstatement of mandatory coverage. If the policy limit has not been exhausted, the remaining portion is not carried over to the next year.

In addition, insurance contracts can provide for reinstatement of the policy limit depending on changes in the risks. Such a provision is subject to a higher premium and is drafted on a case-by-case basis.

Dispute resolution clauses

Generally speaking, insurers can stipulate mediation and conciliation clauses in their policies. FIC Article L112-2 provides that the insurance contract must indicate how the insured can initiate a mediation. Insurance contracts relating to large risks (FIC, Article R112-2) can also contain mediation and conciliation clauses, but they do not, however, need to indicate the exact means of initiating mediations, as would have been the case with a consumer.

According to case law, if an insurance contract contains a conciliation clause or a mediation clause, the parties have to go through these process before taking legal proceedings.16


i Jurisdiction, choice of law and arbitration clauses

There are two types of first instance courts in France: civil courts and commercial courts. commercial courts differ from civil courts in that they are staffed by non-professional judges, who are usually weathered business people. It should be noted that there are no trials by jury in either the civil or the commercial courts.

If neither one of the parties is a commercial entity, the district court or high court have jurisdiction (depending on the amount of the claim) to rule on any disputes in first instance. Alternatively, the regional commercial court has exclusive jurisdiction if all of the parties to the dispute are commercial entities (unless the contract at issue contains a jurisdiction clause that explicitly stipulates that civil courts have jurisdiction). Finally, if a claimant is a non-commercial entity but the defendant is, for its part, a commercial entity, the former can either elect to initiate proceedings before civil or before the commercial courts.

It follows from the above that insurers are accustomed to appearing before both civil and commercial courts (though mutual insurance company must necessarily initiate proceedings or be sued before civil courts, since they are non-commercial entities).

Taking property and casualty insurance as a representative example,17 the principles that govern applicable law or choice of law may be summarised as follows:

  1. compulsory insurance contracts that correspond to a legal obligation (such as motoring insurance) are necessarily governed by French law (FIC, Article 182-1);
  2. Insurance contracts concluded with a French resident in relation to a risk that is deemed to be located in France (according to the criteria set out in FIC Article L 310-4) will necessarily be governed by French law (FIC, Article 181-1-1); and
  3. finally, insurance contracts concluded with a consumer will also necessarily be governed by French law, provided the consumer has his or her habitual residence in France and the insurer carries out his or her usual business in France (Rome I Regulation, Article 6).

There are, however, certain conditions where the parties can elect the insurance contract to be governed by a foreign law, namely:

  1. if the risk is located in France, but the insured resides or has its registered office abroad, the insurance contract can either be governed by French law or the law of the country the insured resides in (FIC, Article 181-1-2);
  2. if the risk is not located in France, but the insured resides or has its registered office in France, the insurance contract can be governed by French law or by the law of the state where the risk is located (FIC, Article 181-1-2); and
  3. if the risk qualifies as a 'large risk' as defined by FIC, Article L111-6, the contract can be governed by any law the parties elect (rather than merely the law of the state associated with the residence of the insured and the location of the risk) (FIC, Article 181-1-5) – however, it should be noted, in this instance, that if the main elements of the insurance contract are located in France, then the overriding mandatory provisions of French insurance law will apply, regardless of the governing law elected by the parties.

In the three instances listed above where the insured and the insurer elect a governing law other than French law, the governing law retained by the parties must either be identified explicitly or be self-evident in light of the other clauses of the contract or the facts of the case. If this is not the case, the governing law will be that of the state that has the closest ties with the insurance contract, which is presumed to be the law of the state where the risk is located (FIC, Article L181-2).

Arbitration clauses in insurance contracts entered into with an insured deemed to be a consumer are null and void (Consumer Code, Article R212-2[10]).

ii Litigation
Litigation stages, including appeals

Generally speaking, first instance proceedings in a commercial case usually take about a year and a possible appeal will usually add another year. A possible, ultimate appeal before the Cour de cassation (which can only be made on a point of law, rather than an issue of fact) would add another 18 months. Obviously, these periods can vary depending, inter alia, on the complexity of the case, the number of parties or whether court-appointed expert investigations are ordered.

Urgent proceedings, such as summary proceedings for interim relief and fixed-date proceedings, also exist under French law. Such proceedings can take several weeks to several months depending on the complexity of the case and the parties' diligence.


Proceedings before French courts do not include discovery, in a marked difference to the way evidence is produced before common law jurisdictions.

Each party must produce the documents relied upon in its submissions and communicate copies thereof to the other parties (Article 132 of the Code of Civil Procedure (CCP)). In the event that a party did not comply with this obligation, its opponents could apply to the court for a disclosure order (CCP, Article 133). The court would then indicate the time limit for disclosure, if necessary on penalty of a daily fine, and, where appropriate, the method of disclosure (CCP, Article 134). The judge on the merits could also choose to exclude whatever documents have not been served in due time (CCP, Article 135). If a party wishes to rely on a document evidencing a transaction to which it was not itself a party, or any other document held by a third party, the court may order the production of the original or a certified copy of the said document (CCP, Article 138).

Pursuant to CCP Article 199, if testimonial evidence is admissible, the court shall admit statements from third parties whose first-hand knowledge can help clarify the facts at issue. Such statements can be made in writing or brought by means of an inquiry or investigation, depending on whether they are written or oral.


Under French law (CCP, Article 695), costs include, inter alia:

  1. the fees, taxes, fees or emoluments charged by the court registry offices or by the tax administration, except any fees, taxes and penalties payable in respect of documents or title deeds produced in support of the parties' claims;
  2. the cost of translating documents, where translation is required by law or by an international commitment;
  3. allowances paid to witnesses;
  4. experts' fees;
  5. fixed disbursements;
  6. emoluments of public officers;
  7. counsel's fees insofar as they are regulated, including fees for counsel's addresses; and
  8. expenses incurred for service of process in a foreign country.

These costs, which do not, however, include the other parties' legal costs, are born by the losing party, once the judgment on the merits is handed down – though it should be noted that the court can, in its judgment (provided its decision is motivated), order that part of these costs also be borne by another party (CCP, Article 696).

While the losing party will habitually be ordered to pay part of the successful party's legal expenses (pursuant to CPP, Article 700), the amount usually corresponds to only a fraction of the successful party's entire legal costs.

iii Arbitration
Format of insurance arbitrations

Under French law, the parties to arbitration have wide autonomy, especially as regards the procedural rules to be followed by the arbitration proceedings, which can be agreed upon in the arbitration agreement. Arbitral proceedings must, however, comply with the mandatory guiding principles set out in the first section of the CPP.

French courts can intervene, at the request of one of the parties, if and when a difficulty arises regarding the appointment of the arbitrators (CCP, Article 1454). Moreover, if the arbitral tribunal has not yet been constituted, parties to the arbitration may file a claim for urgent proceedings before a judge for temporary or protective measures.18 If, however, the arbitral tribunal has been constituted, only the arbitral tribunal would have jurisdiction to order such measures.

Arbitration clauses can be included in contracts, before any disputes have arisen. To be valid, they must be in writing, designate the arbitrator or arbitrators or indicate the manner in which they are to be appointed and determine the subject matter of the dispute (CCP, Articles 1443–1445).

It is recommended to specify the place and language of arbitration, the rules of arbitration to be applied and, where necessary, the governing law. The forms of procedure (e.g., the content of the request for arbitration or the valid means of communication) should be detailed. Moreover, it is important to state: (1) whether the arbitral tribunal may disregard strict rules of law and decide on an equitable basis; and (2) which remedies, if any, are available against the award.

If a dispute has arisen and no arbitration clause can be identified, the parties can decide to sign an arbitration agreement whereby they agree to submit the dispute to arbitration. An arbitration agreement, like an arbitration clause, should designate the arbitrators or specify the manner in which they are to be appointed (CCP, Article 1444). In addition, an arbitration agreement must, in order to be valid, indicate the subject matter of the dispute (CCP, Article 1445).

French courts may have jurisdiction to hand down a judgment on the validity of arbitration clauses, provided the arbitral tribunal has not yet been constituted and the clause at issue is obviously void or obviously unenforceable (CCP, Article 1448).

As a matter of French procedural law, arbitral awards can neither give rise to an appeal before the Cour de cassation nor to an opposition19 (CCP, Article 1503).

Unless otherwise agreed, parties may not file an appeal against an arbitral award. (CCP, Article 1489). The appeal, if it is permitted, either aims to obtain the reversal or the setting aside of the award (CCP, Article 1490). If an appeal takes place, the court of appeal must either rule in accordance with the law or in equity, within the limits of the arbitral tribunal's mandate (CCP, Article 1490).

Appeals against arbitral awards are not allowed, as a rule, and can only be lodged if the parties have an agreement to that effect. In the absence of any such agreement, the only possible recourse against an arbitral award is an action to have the award set aside (pursuant to CCP Article 1491), which is much more limited in scope than an appeal. Such actions are, however, rarely successful as French procedural law and French courts are particularly respectful of the autonomy of arbitration and will only envisage setting an award aside in the face of obvious procedural anomalies in the way the arbitration proceedings were conducted. Actions to have arbitral awards set aside can only be brought on a limited number of grounds, namely:

  1. the arbitral tribunal wrongly assumed or declined jurisdiction;
  2. the arbitral tribunal was not properly constituted;
  3. the arbitral tribunal ruled without complying with its terms of reference;
  4. the adversarial principle was not respected;
  5. the award is contrary to public policy; and
  6. the award fails to state the reasons upon which it is based, or fails to state the date on which it was made or the names of the arbitrators that made it, or does not contain the required signatures, or was not made by majority decision (CCP, Article 1492).

Arbitral awards may be challenged by a third party whose interests are adversely affected by the award (CCP, Article 1501).

Arbitral awards may also be subject to a special remedy (before the arbitral tribunal itself), called revision, on certain limited grounds, including fraud. In such a case, the award is re-examined by the arbitral tribunal (CCP, Article 1502).


Arbitral tribunals are granted wide-ranging powers and discretion when it comes to evidence. They may hear all relevant persons or order any party to communicate all relevant documents (CCP, Article 1467).

Arbitral tribunals may order parties to perform any temporary or protective measures they deem appropriate (CCP, Article 1468).


There is no French statutory provision regulating arbitrators' fees. Consequently, the arbitrators' fees are set by the arbitrators themselves or by the arbitration institution to which the dispute is referred. Fees are mainly based on the number of hours worked or the amount involved in the dispute, and factors such as the complexity of the case, the reputation of the arbitrators, etc. are taken into account.

The allocation of arbitration costs between the parties is usually decided by the arbitrators and clearly indicated in the award. Arbitration costs include the arbitrators' fees, as well as the parties' legal costs.

iv Alternative dispute resolution

French jurisdictions and French procedural law are generally in favour of ADR, which they have increasingly tended to promote.

Under French law, parties to any civil or commercial disputes are always free to recourse to conciliation or mediation.

Conciliation may be either judicial (CCP, Article 127 et seq) or contractual (CCP, Article 1529 et seq). Judicial conciliation may be conducted by the judge or by a judicial conciliator appointed by the judge.

Within the framework of contractual conciliation or mediation, parties choose the party who conducts the proceedings.

Conciliation aims to bring the parties closer in order to lead them to reach an agreement. Although the ombudsman issues an opinion on the dispute, he or she is not an arbitrator and the opinion is not, therefore, binding in any way.

v Mediation
Role of the courts

Like conciliation, mediation may be either contractual or judicial. Within the framework of a judicial mediation, subject to the agreement of the parties, the mediation procedure is conducted by a judicial ombudsman. The judicial ombudsman, who is independent, must possess certain skills and meet specific professional requirements (CCP, Articles 131-4 and 131-5). The judge fixes the duration of the mediation, the remuneration of the ombudsman and may end the mediation at the request of the party, or the ombudsman, or if the normal conduct of the mediation is compromised (CCP, Articles 131-10 and 131-13). When parties have reached an agreement, the judge ratifies it (CCP, Article 131-12).

Regarding contractual mediation in insurance matters, since 2016, proceedings are handled by the insurance ombudsman. This mediation system is compulsory for insurance companies that are members of the French Federation of Insurance (FFA) (i.e., the overwhelming majority of the French market). Insurance companies which are not members of the FFA and that operate in France can adhere to this system. The insurance ombudsman is independent. He or she may intervene in relation to disputes that arise between insurers, insurance intermediaries and even consumers. Subject to the agreement of the insurer member of the FFA, the insurance ombudsman may also intervene in relation to disputes regarding professional insurance (but excluding large risks). The insurance mediation is free and confidential. Parties are not bound by the decision of the ombudsman. However, if the insurer does not intend to comply with his or her decision, the ombudsman must be informed by letter from the general director of the insurer. Limitation periods are suspended during the mediation proceedings.


As has been the case in other neighbouring Member States, the French insurance market has already shown signs that it might experience growth as a result of the outcome of the 23 June 2016 'Brexit' referendum, which may lead foreign insurers who previously operated in continental Europe via the UK to relocate their activities in France, so as to keep benefiting from the EU passport for financial services. HSBC and Chubb have, for instance, already announced that they have chosen to relocate their EU operations in Paris.

Also on the topic of industry news, two major mutual insurance companies, AG2R La Mondiale and Matmut, have announced, in November 2017, that they had entered into discussions for a potential merger in January 2019.

As far as notable legal developments are concerned, in 2017 the Cour de cassation confirmed the principle according to which a victim (or its heirs) is entitled to file a direct claim against the liability insurer of the liable tortfeasor without such a claim being subordinated in any way to also bringing the said tortfeasor into the proceedings.20 The Cour de cassation also recently reiterated its relatively recent position according to which a judge on the merits may hand down a judgment against a liability insurer on the sole basis of a judicial expertise report, even though the said insurer had not been a party to the judicial expertise that gave rise to the report, provided the insurer had had the opportunity to discuss the report's content before the judge on the merits.21


Many regulatory changes will take place in France in 2018. The European directive 2016/97 of 20 January 2016 on insurance distribution must, as mentioned above, be transposed by 1 July 2018, which will greatly increase insurance distributors' existing duties and obligations (in terms of market reviews, conflicts of interest, professional requirements, etc.).

In addition, by 25 May 2018, insurance companies will have to comply with the new requirements fixed in European Regulation No. 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation). This is not insignificant, as it will generate additional compliance pressure on insurers, not least as failure to implement the necessary processes could lead to important fines from the French Data Protection Authority.


1 Alexis Valençon and Nicolas Bouckaert are partners at Kennedys. They are grateful to Thomas Garandeau for his invaluable assistance in the preparation of this chapter.

2 According to the FFA, the French Federation of Insurance - Tableau de bord de l'assurance 2016, FFA, 19 July 2017.

3 Cass, 2nd Civil Div, 7 July 2011, appeal on a point of law No. 10-21719.

4 The FFSA has since become the FFA, by merging with another professional body, the GEMA, which represented mutual insurance companies.

5 Cass, 2nd Civil Div, 3 March 2016, appeal on a point of law No. 15-12464.

6 Cass, 2nd Civil Div, 26 October 2017, appeal on a point of law No. 16-23696.

7 Cass, 2nd Civil Div, 12 April 2012, appeal on a point of law No. 10-20831.

8 Cass,1st Civil Div, 9 February 1999, appeal on a point of law No. 96-19538.

9 Cass, 2nd Civil Div, 20 December 2012, appeal on a point of law No. 11-27225.

10 Cass, 3rd Civ Div, 16 November 2011, appeal on a point of law No. 10-25246.

11 Cass Crim Div 17 January 1996, appeal on a point of law No. 95-80847.

12 Cass, 2nd Civil Div, 30 June 2011, appeal on a point of law No. 10-23309.

13 Cass,1st Civil Div, 18 December 2002, appeal on a point of law No. 00-21991.

14 Cass, 2nd Civil Div, 24 November 2011, appeal on a point of law No. 10-25635.

15 Cass,1st Civil Div, 31 March 1993, appeal on a point of law No. 91-13637.

16 Cass, Mixed Ch, 12 December 2014, appeal on a point of law No. 13-19684; Court of Appeal of Dijon, 19 September 2017, Case No. 15/00277; Court of Appeal of Versailles, 7 February 2017, Case No.15/00896.

17 Other rules may apply to more specialised areas of French insurance law, such as marine insurance or life insurance.

18 Cass 2nd Div 7 March 2002, appeal on the point of law No. 00-11526.

19 'Opposition' is a form of recourse under French law, available when a judgment is rendered by default because a defendant was not properly notified of a hearing. The defendant can, in such circumstances, 'oppose' the judgment in question.

20 Cass 2nd Civ Div, 27 April 2017, appeal on the point of law No. 16-15525.

21 Cass 3rd Div 2 February 2017, appeal on the point of law No. 16-11738.