Marketing a Luxembourg life insurance contract in France under the freedom to provide services

One authorisation, two ways of operating in France

The authorisation granted to an insurer by the State of its head office is valid throughout the European Union and covers both the right of establishment and the freedom to provide services (Directive 2009/138/EC, known as Solvency II⁠, Article 15). In life insurance⁠, the host State is the Member State “of the commitment”, that is, for a policyholder who is a natural person, the State of their habitual residence (Article 13).

Two routes coexist:

• under the freedom to provide services (FOS; LPS in French), from Luxembourg, with no establishment in France;
• under the freedom of establishment (FOE; LE in French), through a French branch represented by a general representative, the mandataire général (Article L. 362-1 of the Code des assurances, the French Insurance Code). The procedure takes longer: three months for the home authority, then two months for the host authority to state the applicable general good conditions (directive, Articles 145 and 146).

The directive draws the line: any permanent presence is treated as a branch, even a mere office managed by the insurer’s own staff, or an independent person mandated to act permanently on its behalf as an agency would (Article 145). Any sales set-up in France must be analysed from this angle.

Notification: one month, through the Luxembourg supervisor

A Luxembourg insurer that wishes to operate under FOS for the first time must inform the Commissariat aux assurances (CAA⁠), the Luxembourg insurance supervisor, in advance. It states the nature of the risks and commitments it intends to cover (Article 139 of the amended Luxembourg Act of 7 December 2015 on the insurance sector; directive, Article 147). Within one month, the CAA sends the host State authority a certificate that the insurer covers its Solvency Capital Requirement and Minimum Capital Requirement, together with the classes for which it is authorised and the nature of the commitments concerned (Article 140). The insurer can start as soon as it has been informed of this communication. A refusal, which must state reasons, can be challenged before the Administrative Court (tribunal administratif). Any change follows the same procedure (Article 141).

On the French side, FOS business requires the ACPR (the French prudential supervision and resolution authority) to have received this information beforehand (Article L. 362-2 of the Code des assurances). The insurer must be able to provide the ACPR at any time with the documents showing that it complies with its obligations (Article L. 363-3). If there is an irregularity, the ACPR orders the insurer to put an end to it; if the insurer does not comply, the ACPR informs the CAA and, if the irregularity persists, can in particular prohibit it from continuing to conclude contracts in France (Article L. 363-4).

From 30 January 2027, the rules introduced by Directive (EU) 2025/2 strengthen the exchange of information between authorities, in particular for “significant cross-border activities”.

French rules that apply to the contract

The applicable law. Where the commitment is made in France, French law applies. If the policyholder is a national of another State of the European Economic Area, the parties may choose the law of that State (Article L. 183-1 of the Code des assurances; see also Article 7 of the Rome I Regulation).

The general good. The contract must not conflict with the provisions protecting the general good in the Member State of the commitment (directive, Article 180). According to the ACPR, even where the law of the State of the insurer’s head office applies, business in France remains subject to the non-harmonised French general good provisions. The ACPR publishes an indicative, non-exhaustive list of them: life insurance, applicable law, distribution, asset freezes. It is for the insurer to find out which rules apply to it.

Language. The contract and the information given to the policyholder are drafted in French. Another language may be used only if the parties can choose a law other than French law, and then by mutual agreement and at the policyholder’s written request (Article L. 112-3 of the Code des assurances; directive, Article 185).

Pre-contractual information and cancellation. The directive sets a baseline of information (Article 185), including surrender values, the unit-linked fund or funds to which the contract refers, the nature of the underlying assets and the applicable law. Under French law, an information notice (note d’information), or a proposal that opens with a summary box (encadré), is handed over against a receipt (Article L. 132-5-2). The policyholder has a right of cancellation (renonciation) for thirty calendar days from the time they are informed that the contract has been concluded (Article L. 132-5-1). If the documents were not provided, this period is extended, for a policyholder acting in good faith, until the thirtieth day after they are actually provided, subject to a limit of eight years.

The role of French intermediaries

The independent wealth adviser (CGP) or broker who offers the contract acts as an insurance intermediary within the meaning of Article L. 511-1 of the Code des assurances. The intermediary must be registered in the single register of intermediaries (Article L. 512-1), kept by ORIAS (the French body that registers insurance intermediaries), and may be subject to supervision by the ACPR.

Under the duty to advise (devoir de conseil), the distributor specifies in writing, before the contract is concluded, the client’s demands and needs, recommends a contract consistent with them and gives reasons for that advice (Article L. 521-4). For a capitalisation contract or certain types of life insurance contract, the distributor also obtains information on the client’s knowledge, experience, financial situation and investment objectives. This includes the client’s ability to bear losses, risk tolerance and sustainability preferences (Article L. 522-5). These rules derive from Directive (EU) 2016/97 on insurance distribution, the Insurance Distribution Directive (IDD); the ACPR classes their non-harmonised provisions among the general good rules.

On the Luxembourg side, the insurer must also know the policyholder’s wealth, age, investment horizon and objectives before offering certain investment options, and classifies the policyholder according to their wealth and premiums (CAA Circular Letter 26/1⁠). The two files should be consistent with each other.

Tax and reporting obligations: refer to the texts

The texts settle three points:

• indirect taxes and parafiscal charges on premiums are those of the Member State of the commitment, whatever the law applicable to the contract (directive, Article 157);
• the pre-contractual information includes general information on the tax arrangements (Article 185);
• the policyholder declares, with their income tax return, contracts taken out with institutions established outside France and the year’s transactions. Payments made through undeclared contracts constitute, unless proven otherwise, taxable income (Article 1649 AA of the Code général des impôts, the French Tax Code).

Everything else (income tax, social security levies, wealth transfer) calls for case-by-case analysis.

Before offering a contract

• Check the insurer’s authorisation in the ACPR’s REGAFI register and, as the ACPR recommends for an EEA insurer, in the home authority’s register and in EIOPA’s register.
• Check the documentation provided (language, information notice or summary box, cancellation) and document the advice.
• Remind the policyholder of their reporting obligation.