France publishes FRPS rules for insurer pension funds
The French government has published rules formalising the creation of a new type of pension fund in France, known as “fonds de retraite professionelle supplémentaire” (FRPS).
It allows insurers to move certain types of pension business off their balance sheets and out from under Solvency II regulation into new vehicles. One of the motivations is to free up investment that would stimulate the French economy.
The “ordinance” was published on Friday. It is the final legislative step in the creation of the new pensions vehicle, which is provided for in omnibus legislation known as Sapin II, after the economy and finance minister Michel Sapin.
The government has previously estimated that some €130bn worth of assets would be eligible for the transfer to FRPS vehicles.
The Sapin II law mandated the government to create these FRPS by way of an ordinance. It sets out myriad aspects concerning these vehicles, such as the financial and prudential rules. These include a requirement to undergo annual stress tests, maintain a “solvency margin”, and to invest according to the prudent person principle.