EC approves State aid granted to CCR for French cat re market
The European Commission (EC) has approved the natural disaster reinsurance scheme operated in France by the Caisse Centrale de Réassurance (CCR), claiming the State aid is "compatible with the internal market".
Specifically, the EC has approved the guarantee granted to CCR by the State in this capacity on an exclusive basis.
CCR chief executive officer, Bertrand Labilloy, gave Intelligent Insurer an exclusive interview explaining why CCR deserves a state guarantee and the rationale behind launching the new CCR Re open market enterprise.
The EC decision has come under criticism from French reinsurer SCOR, which in 2012 applied to the administrative court to contest the conditions of the guarantee granted by the State to the CCR.
SCOR, which has acted for many years to promote the opening up of the natural catastrophe reinsurance market in France, claimed the aid gave CCR a “virtual monopoly” over the market with a share of over 90 percent.
“There are other, cheaper and more efficient solutions to cover French people against natural catastrophes, which would guarantee the rights and obligations of all the players on this market,” said SCOR.
SCOR disputes the statement that the State aid is compatible with the internal market, and intends to take recourse against the European Commission's decision before the Court of First Instance of the European Union.
The EC considered that this guarantee does not constitute a State aid incompatible with the European internal market rules given that “the French natural disaster compensation system is proportionate” and that “it enables each household and business to be insured against these risks”.
CCR has welcomed the decision, and said: “The legality of the French natural disaster scheme has been established with respect to both French law and European law.
“The continuity of this scheme, as well as the legitimacy of CCR's mission for the insureds, the insurers and the State, have hence been confirmed.
“More than ever CCR will remain the cornerstone of the natural disaster scheme in France and will continue to exercise its role of public risk manager while enhancing the natural risk prevention policies.”
Furthermore, the EC has also approved the subsidiarisation terms of CCR’s market reinsurance activities that will be integrated into CCR Re, a wholly-owned subsidiary.
