French optical stores owned by mutual insurance companies, which have already reached an estimated market share of 17 percent in the country, are likely to continue to develop at the detriment of other optical retailers following two recent judicial verdicts. A parliamentary bill, which should be voted into law by the end of this year, is likely to endorse the unique privileges of French mutual insurance firms, with only minor adjustments.

Under a law last amended in 1985, the optical stores owned by French mutual insurance firms are exempted from income tax and certain social charges. This special statute is inexistent in other European countries, except to some extent in Belgium. Asked by a group of independent French opticians to challenge the legality of a recent regional authorization to open an optical and hearing aid center near the Atlantic Coast, the European Court of Justice confirmed last Sept. 21 that mutual insurance companies and federations of mutual insurance firms cannot engage directly in commercial activities, but added that they have the right to own shares in private retail practices, using their own funds as equity, while maintaining the same privileges.

Last Aug. 3, the Court of Appeals of Nancy upheld the arguments of another group of 4 independents in the North of France who had challenged a change in the statutes of a local mutual insurance company that had allowed it to open another optical and hearing aid center, but its verdict had no practical consequences. The court in fact ruled that the regional authorities had failed to follow European regulations in approving the change in the company's statutes, but it rejected the independent opticians' request to order the shutdown of the new center.

The mutual insurance firms want to take the Nancy case all the way to the Supreme Court, but the procedure will take quite some time. Meanwhile, the recent European court judgment is certain to encourage their newest expansion plans. Two large French federations of mutual insurance firms, FNMF and FMF, merged earlier this year and indicated their intention to further develop their joint network of about 350 optical shops, with a common corporate identity.