The FFA details its “CATEX” project

The FFA details its “CATEX” project

The CATEX project is an insurance scheme that the FFA proposes to set up in partnership with the French State. It aims to cover companies against the financial consequences of a lockdown imposed by the public authorities within the framework of a pandemic or epidemic thanks to the payment of a “resilience lump-sum” enabling them to get through the crisis. Since the initial work presented to the government on 11 June, this draft scheme has evolved thanks to the exchanges with various stakeholders. It is a balanced insurance scheme that has just been presented to the public authorities, which will have to follow up on this proposal.

Which companies would be concerned?

The CATEX project would concern all companies covered by a retail or corporate comprehensive insurance policy, whatever their size and sector of business.

Note: such an insurance scheme can only work if it is pooled for all companies. This implies that CATEX would be a compulsory extension to the ‘Fire’ cover, which is taken out by all companies as part of their insurance policy.
What events would be covered?

The event triggering CATEX insurance would be a state of pandemic declared on all or part of the French territory, either by the WHO or by an independent reference body, and which would lead the public authorities to declare a total or partial closure of a group of companies for a specific period of time in order to fight against the spread of the pandemic or epidemic.

Note: CATEX will only be able to operate for future pandemics or epidemics and will not be operational for the Sars Cov2 virus (Covid-19), regardless of the duration of its spread and any future mutations of this virus, as this is a verified and non-random event.
What compensation?

The CATEX scheme would compensate companies with a “resilience lump-sum” calculated without traditional expert opinion, within 20 to 30 days following the claim by the insured to its insurer.

The ‘resilience lump-sum’ would be a percentage of lost revenues, which would depend on the sector of business and defined according to a grid common for all insurers. It is intended to compensate 50% of the gross margin lost, excluding payroll and profits.

Note: CATEX is not an indemnity insurance in that it does not compensate for all losses suffered by the company in the event of total or partial closure. It is therefore not a ‘Business Interruption’ cover. Nevertheless, it allows any business to benefit from a ‘resilience lump-sum’ that will enable it to get through the crisis by reducing the risk of defaulting.
What is the duration and maximum amount of compensation?

CATEX would cover a maximum of 3 months of total or partial closure following a pandemic and could be split over a period of 12 months.

In addition, the total amount of compensation per company and per pandemic would not exceed €500K (maximum compensation for large companies).

The 3 months maximum duration is understood after a deductible equivalent to 15 days of closure (consecutive or separate days but for the same event).

What are the eligibility criteria for the ‘resilience lump-sum’ ?

Beneficiaries of the ‘resilience lum-sum’ would be all companies for which revenues have fallen by more than 50% during the period of lockdown and by more than 8% over the corresponding calendar year for reasons directly or indirectly related to the imposed closures.

Note: in addition to companies directly forced to close, CATEX may also compensate companies not directly targeted but with an activity that was disrupted by the closure of the former.
What is the premium for such protection?

CATEX would be financed by a premium paid by the companies concerned.

Pricing would be the same regardless of the insurer involved. This premium would be based on 2 criteria: declared revenues and the sector of activity as per INSEE classification.

For companies with revenues of less than €100K, the premium would be a flat-rate regardless of their business.

For companies with revenues of over €20M, the premium would be capped at the level of the premium for €20M in revenues and for the sector concerned.