“For companies which buy important amounts of insurance, we will allow that premiums are modulated by insurers, so that companies are urged to take the preventive measures that are needed. At the end, companies that make the most efforts will pay lower premiums,” he explained.

Mr Fillon said that the bill should be sent to the Council of State, the high level body that provides legal advice to the executive branch of the government, before the end of 2011.

Companies and individuals in France pay an additional premium for nat cat risks as part of their non-life insurance policies. The money collected helps fund the National Disaster Compensation Scheme, which covers losses suffered by both families and firms.

Amrae said in a statement that it welcomed the initiative, but argued that it is important to keep in mind that French companies already have to meet mandatory insurance requirements that their peers in other countries are not subjected to.

The association also noted that it supports the flexibility of premiums, but with some caveats.

It highlighted the need for quick access to the available information on the nature and the localisation of the losses that companies suffer, and the conditions of their settlement.

It also argued that the new rules should not represent further costs to companies that already do their preventions tasks properly.

“Amrae believes that the principle of prevention should be applied to the public powers and local governments in such a way that it does not penalise those companies that have already undertaken the measures they are supposed to,” concluded the association’s statement.

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