All questions

The legal framework

i Sources of insurance law and regulation

France has a specific code dedicated to insurance law. This code provides very precise rules that derogate from the law usually applicable in contractual matters. For instance, the limitation period is two years for insurance claims, whereas it is five years for contractual claims. In addition to the specific law applicable to the insurance contracts, different regimes are set out according to the nature of the insurance policy (car insurance, life insurance, liability insurance, etc.). As a result, numerous solutions under French law are specific to a particular kind of insurance and cannot be generalised to all insurance policies.

The French Civil Code may also come into play in insurance disputes. It applies in all matters related to the insurance policy that are not governed by a specific provision under the Insurance Code. Other specific provisions may also come into play, such as the Consumer Code when the dispute is between a professional and a consumer.

Finally, European directives on insurance hold considerable sway over insurance law. As noted below, the European influence was again recently demonstrated as it resulted in rendering ineffective some provisions of the Insurance Code related to car insurance.

ii Insurable risk

Under French law, the subscriber does not have to show any interest to conclude an insurance policy. As a result, the subscriber can issue an insurance policy not only on his or her own behalf but also on behalf of a third-party beneficiary.

Under French law, insurability of the risk is determined with regard to the nature of the insurance contract. Insurance is considered as a ‘contingent contract’ under the French classification of contracts. It implies the risk must exist to be insurable. Thus, an event that already occurred cannot be covered. Moreover, if the event occurred as a result of the policyholder’s intentional conduct, the insurer can reject the claim.

In addition, a risk cannot be underwritten by an insurer if it contradicts public policy. Notably, criminal offences are not insurable. Therefore, a company cannot ask its insurer to pay a fine for which the company is liable.

Finally, some risks are excluded by law, such as the risk of riots or civil war.

iii Fora and dispute resolution mechanisms

French law does not provide for a specific court to deal with insurance-related claims. Depending on the nature of the parties, the claim can be brought before the civil courts, the commercial courts and even the administrative courts when it involves public entities.