On Jun. 14, FR GVT published decree on valuation, units' redemption.
FR GVT published Decree 2024-539 of Jun. 12, 2024 relating to the conditions for valuation and redemption of the units of account mentioned in the last sentence of the second paragraph of article L. 132-5-4 of the Insurance Code (C.ass).
Main Points
Concerned contracts are individual life insurance contracts containing surrender values, subscription to capitalization contract or membership to a group life insurance contract.
For these, the insurer or broker, must take all appropriate measures intended to prevent conflicts of interest and avoid harming the interests of subscribers/members.
These contracts, which include guarantees expressed in units of account, provide for the option of choosing an investment strategy according to savings allocation profiles.
The subscriber or member can modify their savings allocation profile free of charge.
The characteristics of these allocation profiles are determined by Ministerial decree.
Considering the financial risk exposure level, the holding horizon and expected return.
These allocations include a minimum portion of commitments expressed in euros.
Giving rise to the constitution of a diversification provision or units of accounts made up of assets presenting a low-risk investment profile defined by Ministerial decree.
They may include a minimum share of units of account made up of categories of collective investment undertakings mainly invested in unlisted assets or in securities.
Decree 2024-539 allows insurance/capitalization companies, mutual societies/unions, provident institutions to have recourse to the value of the underlying units of account.
And to define the conditions under which they mobilize the estimated value of those.
It also provides for the possibility for these same entities to reduce the repurchase value of a unit of account that is having an illiquid asset as the underlying asset.
Finally, it provides for compensation in exceptional or non-exceptional circumstances.
Effectiveness
The Decree will enter into force on Oct. 24, 2024.
Jun. 28, 2024 Underlying Units of Account
On Jun. 28, 2024, FR GVT published Ord 6/12/2024 relating to the conditions for using estimated values for units of account having illiquid real assets as underlying assets.
Added art A. 131-5 in chapter I of Title III of Book I of the regulatory part of C.ass.
The estimated value under the conditions of art L. 131-5 can be used provided that the period separating the publication of two net asset values is at least two months.
The order enters into force on Oct. 24, 2024.
Regulators
FR GVT
Entity Types
IB; Ins; Pension
Reference
OG JORF 0151, 6/28/2024; Ord 6/12/2024; OG JORF 0138, 6/14/2024; Decree 2024-539, 6/12/2024; C.ass (FR); Citation: Decree 2024-539; Ord 6/12/2024;
