Vive la Révolution! Analysing the impact of France’s captive revolution

Following the passing of new legislation at the start of this year France is slowing but surely ramping up its standing as a major captive domicile. Meanwhile, other European countries look on and contemplate their own captive regimes…


After years of lobbying, the rollercoaster journey of new pro-captive legislation into the French government’s 2023 Finance Plan was one of the big captive stories of last year.

The country has long housed captive insurance companies, but in winning this new ‘resiliency provision’, allowing captives to pool surplus to pay out on future claims, it makes France far more attractive as a location to domicile a captive.

Specific details of the resiliency provision were revealed earlier this year in a decree and added to the French tax code, backdated to 1 January 2023.

It clarified the annual contribution to the provision is capped at 90% of the net result of the captive, and the total provision is capped at 10 times the minimum capital required.

This provision can be released on the 16th year in case of no claim. There had been 10 captives domiciled in France before this year, with four more captives forming as of the start of October following the passing of this new legislation, taking the total up to 14.

And this number is expected to keep growing, with several applications currently being revised by the regulator and several others currently being built by various corporations with the support of brokers, according to Brigitte Bouquot, vice-president of AMRAE (the French risk management trade association), which is leading on its captive-related actions.

In an AMRAE survey dating back from September 2022, the association found there was potential for the creation of 40 new French-domiciled captives in the near term.

Limiting factors

There are limiting factors in France that mean this potential cannot be realised immediately.

The provision not applying to the financial industry, including banks or insurers, and only applying to certain risk classes, notably excluding employee benefits, is problematic for France’s growth as a captive domicile.

There is also the newness of France as a domicile, and some French companies with foreign-domiciled captives are likely studying how France’s captive industry develops and how the French regulator, the ACPR, manages the influx of new captives.

“As of now, due to the limited number of captives domiciled in France in the past years, the availability of a network of professionals, like captive managers and support services fi rms, can be questioned,” Bouquot said. “This will change as the number of captives domiciled in France grows.”

Captive manager 2RS has a French office and has managed four captives in France for the last decade.

Following the launch of this provision, the company has been working on six captive applications with the ACPR this year, and 2RS CEO Yannick Zigmann is confident there will be a real rise in interest next year.

“There is a real appetite to set up a captive in France, not only in the traditional lines of business but also for other lines of business,” he said. “We have six applications here where the companies are very large ones where the state is a main shareholder, and we believe this should speed up the process of getting licensed. It’s good to have big names that want to set up a captive in France, so we can prove to everyone else that it works here.”


Luxembourg continues to be a dominant location where most large companies in France, and the rest of continental Europe, domicile their captives.

2RS manages 72 Luxembourg-based captives, with new captive formations last year coming from countries including France, Spain, Germany and Belgium.

However, while there had been some anticipation that the new legislation might lead captive owners to redomicile their captives from Luxembourg to France, especially if France is where the parent company is primarily based, Zigmann says he hasn’t heard this from his clients and expects this may be something that will only happen once France is more established as a captive domicile.

“We talk to some clients about redomiciling to France but so far we don’t see any real interest,” he said. “Captive owners are used to working with the Commissariat aux Assurances (CAA); they have had a good experience with them and are at ease with the legislation. The earliest we might see captives redomicile is next year, but there’s no hurry to do this and people are happy in Luxembourg.”

In the first nine months of 2023, the CAA approved the licensing of four new captives in Luxembourg, with the regulator currently working on several new applications targeting an authorisation before the end of the year.

Valérie Scheepers, head of the CAA’s non-life reinsurance department, recently told Captive Review that Luxembourg has yet to see any impact from the new French legislation.

Captive managers

Zigmann highlighted how in European domiciles like Luxembourg there is already an ecosystem in place involving various types of different service providers such as banks, asset managers and auditors with an understanding of captives that France will need to build up.

“This environment has existed for many years in Luxembourg and places like Dublin and Malta, but we need to see whether France can replicate that,” he said. “That’s why it’s not just about the legislation. We need to see whether this ecosystem will be developed around captives.”

In Malta, Luxembourg and Ireland the regulator has also set apart in the legislation the defined status of the captive manager.

Companies like 2RS are recognised as the manager of the captive and subsequently have a direct link to the regulator.

“This does not exist in France,” Zigmann added. “This means that the CFO or general counsel from within the C-suite of the group must be the manager of the captive. When you are a CFO working in the industry, you do not understand all this legislation about insurance. This is the reason why what we need in France is a new status for captive managers.

“Just as you have the status of broker, insurer or reinsurer, we should have a defi ned profession status of captive manager agreed by the watchdog, so they can tell who is in charge and ensure they have a licence to be a manager of a company.”

This is an issue Zigmann said he has discussed with prospective clients, as the CFOs are not comfortable with going from their day-to-day industry to then discussing captive regulation and compliance with the French regulator.


AMRAE continues to lobby on behalf of French captive owners, but Bouquot said that to further encourage growth in France as a captive domicile, it requires greater explanation to corporations, including small and medium-sized ones, so they understand how having a captive in France can optimise their risk management.

And as the French regulator does not allow outsourcing, managers would need to be educated so they become “true reinsurance directors, fully compliant with Solvency II practice”.

To help boost the French captive industry, AMRAE plans to launch the French Federation of Corporate Captives (FFCE) within the next few weeks in order to promote the creation of captives to improve corporate resilience.

“This resilience benefits a low-carbon economy, socially inclusive and more competitive, leading to value and employment creation in France and more widely in Europe,” Bouquot said.

Alongside AMRAE, the FFCE will advocate for captives, with extending the provision to employee benefit lines likely to be one of the goals they will pursue, among others.

“AMRAE supports risk managers in their journey towards the process of captive creation in France, and their development. It contributes through the deployment of captive management practices, of new competence in the reinsurance ecosystem strengthening French marketplace position,” she added.

European domiciles

Following AMRAE and France’s lead, there are clear signs other European countries also want to take advantage of what captives can offer.

Discussing the subject of potential new European domiciles often divides opinion. Some say that Europe is already very well served for domiciles, with Guernsey and Luxembourg especially well established and popular locations for captive owners.

But others point to reasons why it would be advantageous for large corporations to have a captive domiciled in their home country.

Peter Carter, head of captive and insurance management solutions at WTW, does see what could eventually become a trend in Europe.

“There are certain entities that are looking closer to home to set up their captives,” Carter said.

Carter added that French legislation has made the country more captive-friendly and has been answered by growing interest from French corporate groups.

But he also cited reported interest in setting up captives in other countries such as the Netherlands.

UK captive regime

Outside continental Europe, the UK is also looking at opportunities in the captive sector. In September, the UK Treasury department hosted a roundtable in London to consider the potential benefits of introducing a UK captive insurance regime.

Andrew Griffith, economic secretary to the Treasury, recently mentioned that the meeting was part of an effort to “make sure the UK remains a world-leading destination for risk management solutions and insurance innovation”.

Caroline Wagstaff, CEO of the London Market Group, called for the government to create a regulatory environment that would bring in legislation to encourage businesses to set up captives in the UK.

“Despite being the global hub for risk transfer, the UK’s regulatory regime is not conducive to businesses setting up captive insurers here,” she said.

“If we are to remain the place where business comes for risk-transfer advice and solutions, then not having this string to our bow means we are not keeping pace with new and innovative methods of risk management. A UK captive domicile would offer participants a truly extensive financial services ecosystem, London-based global brokers with extensive captive consulting experience, an unrivalled range of local banking and asset management options, as well as the world’s largest and most sophisticated reinsurance market.”


In Italy, Carter said it is possible that scrutiny of overseas operations by the Italian tax authorities could bring captive activity home.

Ronan Ryan, the Dublin-based chief commercial officer of captive and insurance manager Robus Group, based in Guernsey, stated that the Italian financial services regulators would welcome domestic companies moving their foreign-based captives back home, but said they could face some practical obstacles.

Despite the apparent support of the Italian government, Ryan said the country lacks a captive framework, both legal and human.

“I just don’t know how easily it could be implemented,” he said.

Europe’s traditional domiciles already have the legal structures in place and the specialised skills to help get a captive operation up and running immediately, he added.

With a high regard for European captive regulators across the board, Ryan does not see competition among domiciles as an issue.

“There are more corporates establishing captives now than we have seen in recent times. All of the domiciles in Europe are winning,” he said. “It’s not that one domicile is dominating over another.”

12 August 2024
5-6 November 2025

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