Definition and nature of a provident institution

Definition and nature of a provident institution

Prevailing institution we have seen, a provident institution is a private non-profit corporation, governed by the Social Security Code, under the European insurance guidelines and authorized to offer benefits and services. in the field of insurance people.

A provident institution therefore has the vocation to propose insurance aimed at covering the risks of life that are disease, incapacity for work, disability and death. As a result, the benefits it delivers are in the continuity of those provided by social security; It is therefore essentially for this reason that it is governed by the same regulatory text that this state body.

Provisional institutions of one of the main characteristics of this type of insurance organization (characteristic that differentiates it from the other two types of insurers, namely insurance companies, and especially mutuals) is that it is created and Managed by the social partners (professional unions) of a company or a branch, or by social partners belonging to several branches of activity.

In addition, this type of organism is characterized by its joint management, which means that the boards of directors of the institutions are equally established by representatives of employers and representatives of employees.

Finally, because they aim to serve the interests of the participants (employees) and members (companies), they only offer public-character insurance contracts.

In France, today there are more than sixty provident institutions, which cover more than 11 million employees.
The branches of insurance in which a provident institution is authorized to provide benefits

Prevailing institutions This has been mentioned above, a provident institution can not exercise insurance operations only in the general field of "insurance of persons" (for more information on the classification of insurance operations in different branches , visit the "Insurance Branches" page).

Remember that the insurance of people aim to guarantee the human person against the risks of existence (illness, incapacity for work, disability, death) and formally oppose the insurance of goods which, they only target Guarantee the heritage of the insured.

The Code of Social Security lists in more detail, in Article R931-2-1, the branches in which the provident institutions are authorized to carry out insurance operations, by taking the classification established in Article R321- 1 of the Insurance Code.

The branches and sub-branches in which the provident institutions are authorized are as follows

1. Accidents (including accidents at work and occupational diseases),
2. Disease,
16. Various pecuniary losses,
20. Life-Death,
21. Nuptiality-birth,
22. Insurance related to investment funds,
24. Capitalization,
25. Collective fund management,
26. Any collective operations defined in section 4 of Chapter II of Title III of the Social Security Code.
Functioning of a provident institution

The provident institutions are created for the sole purpose of protecting the interest of their participants (employees) and their members (companies). Therefore, they are not subject to the constraint of bringing benefits to remunerate an shareholding, unlike insurance undertakings.

Pension Institution - Board of Directors to fulfill their mission of preserving the interests of their members, these insurance agencies are governed by a board of directors operating on the basis of equality of representation between the social partners (employers and employees ) The board of directors has the main function, as part of the preservation of the interests of companies and employees, to ensure directly to the implementation and management of collective contracts guarantees. On the other hand, it monitors and the evolution of the guarantees and services offered.

To the extent that these companies are non-profit, their management results are used to improve benefits, to develop additional guarantees, to increase the safety of commitments or to develop social action. Decisions under these management issues are subject to the approval of a General Assembly (bringing together the members of the members and the participants) which approves or disapproves of the accounts. Arbitrations in terms of account management are carried out transparently.