Reinsurance captives

A recent decree passed as part of the 2023 social security financing law has eased the financial and tax conditions for companies wishing to create captive reinsurance companies in France. This new decree now allows companies to establish their own captive reinsurance company under conditions comparable to those in Luxembourg.

Edouard de Lamaze , Founding Partner of the law firm Carla ra (Carbonnier-Lamaze-Rasle) explains "These new rules offer serious opportunities for many French companies that are facing an increase in their insurance policies."

Captives, legal structures allowing companies to create their own insurance structure to self-insure against their own risks, with a view to reducing insurance policy costs (margin gain, tax gain, usage gain), have until now suffered from unfavorable taxation.
Companies wishing to create these captives had to do so in Luxembourg. In fact, this was an option rarely chosen by French companies.
This decree makes this scheme fully accessible in France, and many companies are beginning to take the plunge. Reinsurance captives, under this new tax framework, can be of significant interest to groups with substantial insurance risks that wish to improve their long-term risk management.

“ Carlara has developed expertise in this area,” explains Edouard de Lamaze . “We encourage companies to consider the opportunity of creating such a structure and to contact firms like ours that can help with a risk-benefit analysis.”