France's so-called "terror tax" on insurance contracts will rise on January 1, 2027, according to an order published in the Journal Officiel. The levy funds a guarantee fund that compensates victims of terrorism and other crimes.
The contribution, currently set at 6.50 euros, will increase to 8.50 euros per contract, according to Article L422-1 of the Insurance Code. Article 1 of the order dated July 24 states that the sums will be collected by insurance companies when premiums or contributions come due between January 1 and December 31 of the relevant year.
What the fund covers
The guarantee fund, overseen by the French state, has three roles. It compensates victims of acts of terrorism, victims of common law offenses including violence against people and damage to property, and victims of road accidents caused by unidentified or uninsured drivers.
The fund also seeks legal recourse against those responsible for these acts, aiming to recover compensation paid out to victims. It additionally carries out awareness campaigns aimed at road users.
Origins of the fund
The Fonds de Garantie des Victimes des Actes de Terrorisme et d'autres Infractions (FGTI) was created in 1990, predating the 2015 terrorist attacks in France. It succeeded the Fonds de Garantie des Victimes des Actes de Terrorisme (FGVAT), which had been established to compensate victims of terrorism in France during the 1980s. Its remit later expanded to cover victims of common law offenses, leading to its current name.
