The European Commission has opened a formal investigation to examine whether France’s plans to grant various tax benefits to insurers in respect of certain sickness, death and invalidity policies of a social nature are compatible with EU State aid rules. The French authorities argue that these measures are compatible with Article 87(2)(a) of the EC Treaty, a relatively infrequently used provision. The Commission nevertheless has doubts whether the three conditions set by Article 87(2)(a) are met, namely whether (i) the aid measures have a social character; (ii) the benefits will, in fact, be passed on to individual consumers; and (iii) the measures are non-discriminatory. The opening of a formal investigation will give interested third parties the opportunity to submit their comments.