Life insurance: a bill on the transferability of contracts examined in the Senate

Posted Jan 26, 2023, 9:00 AM

She had disappeared from the radar last spring, swept away by the presidential election. The bill on savings by senators Les Républicains (LR) Jean-François Husson and Albéric de Montgolfier will finally be examined in public session in the Senate on January 31.

This text aims to make savings products more transparent and efficient. If this recurring subject annoys insurers, an article makes them jump downright: the one that aims to authorize the transferability of life insurance contracts between insurance companies.

“We are particularly worried, explains Florence Lustman, the president of France Assureurs. It is a false good idea because it would mechanically reduce the average duration of contracts, which is twelve years today, and therefore the ability of insurers to finance the economy in the long term and businesses”.

The senators believe that the “Pact” law of 2019 has not gone far enough. If it allowed the transferability of a savings contract within the same company, towards a new product, they estimate that the French must be also free to change company.

Eight-year time frame

This transferability would guarantee “real competition” between the players and would allow “savers to opt for more efficient and less expensive contracts”, details the explanatory memorandum. Without destabilizing, according to them, the financial system. “On the possibility of changing borrower insurance, we were told that it was going to be an earthquake. We have not seen it, ”says to the “Echos” Jean-François Husson.

By proposing to authorize the transfers after only eight years, “we are not calling into question the legal and fiscal block of eight years”, adds the senator. Insurers sweep away this argument. According to them, 70% of the 1,800 billion euros in life insurance outstandings are concentrated on contracts over eight years old.

The senators have watered down their wine. An amendment adopted on Wednesday in the Finance Committee provides for “postponing the application of the system to redemptions made from January 1, 2025”.

It remains to be seen how the text will evolve, especially during its passage through the National Assembly, which could radicalize the content, fear some insurers. For its part, the Treasury is against transferability between companies, according to several concordant sources.

If the proposed law intends to reduce the costs, it nevertheless seems to lack bite on the retrocommissions, these costs inherent in the supports in units of account which remunerate the asset manager as well as the distribution chain. The senators explain that they are counting on European parliamentary work for better supervision. “We have dealt with this subject by offering real transparency of costs, without upsetting our entire advisory system”, they underline.

“The French insurance sector is attached to the model of remunerating intermediaries by commission,” said Florence Lustman. This enables investors to pool the costs of advice and thus provide this service to everyone, regardless of the amount to be invested. »

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