Franse belastingvoordelen voor ziektekostenverzekeraars bestempeld als illegale staatssteun (en)

The European Commission has adopted a recommendation calling on France to abolish, by 1 January 2006, the exemption from tax on insurance contracts enjoyed by mutual and provident societies in the case of non-health insurance risks. The Commission considers that the exemption constitutes state aid incompatible with the EU rules on the subject. Back in November 2001, it called on France to abolish the exemption from the tax on insurance contracts in the case of health insurance risks. France has one month in which to respond to the Commission's recommendation. If a favourable response is not forthcoming, the Commission may open a formal investigation.

EU Competition Commissioner Neelie Kroes said "the recommendation is a further step towards the removal of distortions of competition in the EU insurance market".

In France, insurance contracts concluded by mutual societies governed by the code on mutual societies and provident societies are not subject to the tax on insurance contracts. The Commission considers that this exemption constitutes state aid in that it confers an advantage on mutual and provident societies not enjoyed by other French and foreign insurance companies with which they are in competition.

Since the exemption predates the entry into force of the Treaty of Rome, it constitutes what is known as "existing aid", and the Commission needs France's cooperation in order to abolish it. If the French authorities refuse to cooperate, the Commission may decide to initiate the formal investigation procedure. There is no obligation to pay back existing aid.

The Commission's recommendation is a follow-up to action taken on 13 November 2001 (see IP/01/1575), when the Commission called on France to put an end to the exemption of mutual and provident societies from the tax on insurance contracts in the case of health insurance risks. Subsequent to that proposal, France replaced the specific exemption for mutual and provident societies with an exemption for so-called "solidarity" health insurance contracts, i.e., contracts concluded without a prior medical examination, irrespective of the status of the body providing the cover. The latter exemption was considered by the Commission to be compatible with the rules on state aid.