FRANCE Law and Practice Contributed by: Emmanuèle Lutfalla and Louis Fer, Signature Litigation AARPI
9.2 Forthcoming Reforms and Market Impact Several legislative and regulatory developments are expected to affect the French insurance market in the near term. The EU AI Act, which entered into force in 2024 and is being phased in progressively, is introducing new obligations on providers and deployers of AI systems, with direct implications for liability and insurance cov- erage. The associated AI Liability Directive, which remains under consideration, is expected to introduce a presumption of causation for AI-related harm, which could significantly increase the volume of claims and reshape the coverage landscape for product liability and professional indemnity policies. The CSRD has introduced detailed ESG disclosure requirements on large companies, which could gener- ate new D&O exposure as the accuracy of these dis- closures comes under scrutiny. The implementation of DORA requires insurers to strengthen their own opera- tional and cyber-resilience frameworks, and non-com- pliance could give rise to regulatory sanctions. On the domestic front, the French government has announced plans to reform the French natural catas- trophe insurance regime, which has come under pressure from the increasing frequency and sever- ity of climate-related events, particularly flooding and drought-induced subsidence. Any reform of this regime could have significant implications for property insurers and their reinsurers.
directly influence dispute risk by setting benchmarks against which policyholders may later measure insurer conduct. Consumer protection is another priority, with particular attention to the clarity and fairness of policy terms, the adequacy of pre-contractual information, and the handling of complaints. The ACPR works closely with the French Directorate-General for Com- petition Policy, Consumer Affairs and Fraud Control (DGCCRF) on these issues, and the “value for mon- ey” principle has become a central theme, imposing co-responsibility across the entire distribution chain, including wholesale brokers. ESG and sustainable finance are rapidly rising on the regulatory agenda. Insurers are expected to inte- grate sustainability risks into their risk management frameworks, and the ACPR has conducted climate stress tests on major French insurers. The regulator also emphasises that insurers should not only identify and mitigate these risks but also proactively engage in prevention strategies. Operational resilience, including cyber-resilience and business continuity, is another area of growing supervisory attention, driven in part by the EU Digital Operational Resilience Act (DORA), which has applied to insurance companies since Jan- uary 2025. The ACPR has made DORA implementation a top priority, compelling insurers to demonstrate robust ICT risk management and governance, which in turn influences underwriting decisions and contributes to the hardening of the cyber insurance market. The interplay between these regulatory priorities creates a demanding compliance environment that fundamen- tally shapes insurer behaviour and elevates dispute risk across multiple fronts, from claims handling and product design to ESG disclosures and operational resilience.
117 I NSURANCE L I T IGATI O N 2026
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