French reinsurer SCOR SE has claimed a legal victory in a case over whatit describes as illegal state aid in France's natural catastrophe reinsurancemarket.
The Paris administrative court ruled July 12 that Francemust either terminate its guarantee of Caisse Centrale de Reassurance's natural catastrophereinsurance business or notify the European Commission of the scheme within ayear. The latter would require the EC to rule on whether the scheme, enactedunder a law passed in 1982, complies with European law.
SCOR said the ruling means that the court "has thusformally acknowledged the existence of state aid that renders the [CaisseCentrale de Reassurance's] natural catastrophe reinsurance schemeillegal."
SCOR added that it objected particularly to the exclusivenature of the state's backing of Caisse Centrale de Reassurance, "whichgives it a virtual monopoly with a share of over 90% of the French naturalcatastrophe reinsurance market." SCOR also said it is willing to helpdefine "an alternative reinsurance system, in accordance with Europeanlaw, that will enable the various companies concerned to operate on the naturalcatastrophe market in France alongside the CCR and the state."
Caisse Centrale de Reassurance said the ruling does not, insubstance, call into question either the scheme or its operation. It added thatthe agreement between the state and Caisse Centrale de Reassurance regardingthe guarantee "is already the subject of exchanges with the EuropeanCommission for purposes of its notification."