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Paris121 bis, rue de la Pompe, 75116 Paris, France

Luxembourg30, rue Marie-Adélaïde, L-2128 Luxembourg

Life insurance and capitalisation

We draft and audit life insurance and capitalisation contracts, from the general terms and conditions to the agreements between the parties involved, for insurers, private banks and asset managers.

France

A contract (contrat d’assurance vie) is reread years after it was taken out, in an audit, an inspection or a dispute, and every document counts: the information notice (note d’information), the profit-sharing clause, the table of surrender values.

Life insuranceA contract under which an insurer undertakes to pay a lump sum or an annuity, at the end of the agreed term or on the death of the insured person, in return for premiums. In France, it is also widely used as a savings and wealth transfer vehicle.

A drafting flaw is repeated in every contract issued on the same wording and can keep the (renonciation) open for up to eight years. We draft each clause so that it can be explained to the policyholder and defended before a court and before the (the French prudential supervision and resolution authority).

Right of cancellation (renonciation)The right of the holder of a life insurance or capitalisation contract to withdraw from it within thirty days of being informed that it has been concluded. If the information documents required by law were not provided, this period is extended, for a holder acting in good faith, up to a limit of eight years.
ACPRAutorité de contrôle prudentiel et de résolution: the French authority, attached to the Banque de France, that authorises and supervises banks and insurers and oversees the protection of their customers.

What we do

01 Design

Life insurance and capitalisation contracts

  • General terms and conditions, information notes and notices, proposal forms serving as the information note and their summary box (encadré), special conditions and appendices.
  • Euro-fund, unit-linked and multi-fund contracts, and capitalisation contracts (contrats de capitalisation), including “white-label” products designed for private banks and credit institutions.
  • (fonds en euros): profit-sharing clause (participation aux bénéfices), guaranteed minimum rate and the conditions for applying it, profit-sharing reserve, ring-fencing (cantonnement), offering several euro funds.
    Euro fund (capital-guaranteed general fund)A life insurance investment option whose capital is guaranteed by the insurer, which credits it each year with a share of its profits (participation aux bénéfices).
  • Charges (wording, characterisation, deduction from a ⁠), loyalty bonuses, surrender values, including personalised values, and paid-up values.
    Unit-linked fundA life insurance investment option linked to financial assets (funds, securities): the value of the contract follows the value of these assets, with no capital guarantee from the insurer.
  • and ⁠: scope of the advice, status and (devoir de conseil) of the mandate holder, allocation of roles between insurer, distributor and investment manager.
    Discretionary management mandateA way of managing a unit-linked contract in which the policyholder delegates switching decisions to a mandated manager, within an agreed investment strategy.
    Advisory managementA way of managing a contract in which the policyholder receives switching recommendations but makes the decisions.
    Duty to adviseThe obligation of the insurer or the distributor to propose a contract consistent with the client’s demands and needs, and to explain the reasons for that advice.
  • Agreements between the parties involved (agent, broker, custodian bank, investment manager), evidence agreements and operating procedures.
  • Tax features of the contracts and tax treatment of transactions: corporate policyholders, non-residents, expatriation and relocation to France, premiums paid and surrenders made in securities.
  • Deeds of pledge (nantissement) and delegation over a life insurance or ⁠, including in favour of foreign credit institutions; advertising materials, product sheets and subscription guides.
    Capitalisation contractA savings contract offered by an insurer, similar to life insurance but not linked to the length of a human life: it does not end on death and can be passed on.
02 Design

Retirement savings and contracts under special rules

  • Individual and company French retirement savings plans (⁠): drafting, audit, transfers.
    French retirement savings plan (PER)A retirement savings product created by the PACTE Act of 2019. For new subscriptions, it has replaced the PERP and the “Madelin” and “article 83” contracts.
  • Contracts predating the PACTE Act (PERP, “Madelin”, “article 83”), whose marketing ended on 1 October 2020: administration, collective amendments, transfer to a PER.
  • Supplementary pension schemes under Articles 39 (schemes reformed in 2019) and 82 of the Code général des impôts (CGI, the French Tax Code), end-of-career indemnities: characterisation, recharacterisation risks, profit sharing, information for members.
  • Pension commitments on an acquisition, a change of control of the subscribing company or a change of insurer.
  • ⁠: contracts and pre-contractual information, amendments converting existing contracts, term of the guarantees, allocation of profit sharing.
    Eurocroissance fundA life insurance investment option that guarantees all or part of the capital at a set maturity date, in return for a lower guarantee before that date.
  • “Vie-génération” contracts: information on eligible unit-linked funds and on the contract’s tax regime.
  • Funeral insurance contracts: characterisation, definition of the cover, designation of the beneficiary, technical rate, the ACPR recommendation on how they are marketed.
03 Design

Borrower insurance, key person insurance and death cover

  • Terms of cover: definitions, exclusions, conditions under which benefits become payable, territorial scope.
  • Compliance with the Code des assurances (the French Insurance Code) and the Code de la consommation (the French Consumer Code); clauses reviewed in the light of the opinions and recommendations of the Commission des clauses abusives (the French unfair contract terms commission) and of the industry’s ethical commitments (France Assureurs, the French insurance industry federation).
  • Group contracts taken out by a bank, a broker or an association: the borrower’s enrolment, information for members, delegated administration.
  • Termination and substitution of during the term of a property loan, possible at any time since the Lemoine Act of 2022: equivalent level of cover, information for the borrower.
    Borrower (creditor) insuranceInsurance that guarantees repayment of a loan if the borrower dies, becomes disabled or is unable to work.
  • Information for the borrower where cover may end before the loan matures.
  • Sharing of technical and financial profits, changes during the life of the contract, premium payment methods.
  • and death cover: definition of the risk, medical formalities, online subscription.
    Key person insuranceInsurance taken out by a company to protect itself against the loss of a person who is essential to its business.
  • Validity and implementation of a non-standard ⁠.
    Beneficiary clauseThe provision that names the person or persons who will receive the capital on the death of the insured person.
04 Steer

Managing contracts and portfolios over time

  • Amending contracts in force (guaranteed rates, unit-linked funds offered, charges, investment restrictions on the euro fund) and informing policyholders of material changes.
  • ⁠: amendments decided by the subscribing association, annual letter, minutes of general meetings, liability of the subscriber.
    Group insurance contractA contract taken out by a legal entity (an association, an employer, a bank) that individuals join as members.
  • Upgrading the statutory information for existing portfolios, so that the thirty-day period that ends the extension of the cancellation period starts to run.
  • Converting contracts into a multi-fund contract or into Eurocroissance without losing their tax seniority (antériorité fiscale).
  • Legal and tax audit of portfolios, on an acquisition or as part of an internal audit assignment.
  • Legal and tax opinions: surrender value, underlying assets, ⁠, recharacterisation risks.
    Unclaimed (dormant) contractsThe situation of life insurance contracts that remain unclaimed. The Eckert Act of 2014, in force since 2016, strengthens the search for insured persons and beneficiaries and provides for the sums to be transferred, after a set period, to the Caisse des dépôts. In French: déshérence.
05 Defend

Pre-litigation and litigation

  • Right of cancellation (renonciation): provision of pre-contractual information and surrender values, the policyholder’s good faith, abuse of rights.
  • Duty to advise (devoir de conseil) and financial management: investment profile, switches, warnings, liability of the insurer, of the agent and of the investment manager.
  • Beneficiary clause, profit sharing (participation aux bénéfices) and guaranteed minimum rate: validity, performance, amendment.
  • Group contracts taken out by savers’ associations: information for members, subscription and management.
  • Series of claims arising from contracts issued on the same wording, handled at portfolio level with a strategy common to all the cases.
  • ACPR inspections and their follow-up: observations on the report, replies to follow-up letters, defence before the Commission des sanctions.

Examples of matters

  1. 01

    Design of life insurance contracts under advisory management and under a discretionary management mandate.

  2. 02

    “White-label” euro-fund, unit-linked, multi-fund and capitalisation contracts, developed for insurers and credit institutions with all their contractual documentation.

  3. 03

    Changing the guaranteed rate of euro-fund contracts already in force, for several insurers.

  4. 04

    Converting portfolios of contracts into multi-fund contracts without loss of tax seniority (so-called “Fourgous” transformations).

Frequently asked questions

Can a life insurance contract be converted without losing its tax seniority?

Yes, under Article 125-0 A of the CGI: the full or partial conversion of a contract into one that allows all or part of the premiums to be invested in unit-linked funds or a Eurocroissance fund does not trigger the tax consequences of a termination (dénouement). It is done by amendment or by a new contract with the same insurer. The amendment, the policyholder information and the treatment of existing guarantees need to be prepared in advance.

Can a bank offer a life insurance contract under its own brand?

Yes, as a “white-label” contract: the authorised insurer bears the commitments and remains identified in the documentation, and the bank distributes the contract as an intermediary registered with ORIAS (the French register of insurance intermediaries). If the bank decides the product’s essential features with the insurer (cover, charges, target market), it may be regarded as a co-manufacturer under the product governance rules derived from the (IDD). A written agreement must then set out each party’s role.

Insurance Distribution Directive (IDD)Directive (EU) 2016/97 on insurance distribution, transposed in France in 2018. It governs the information, advice and remuneration of distributors. In French: directive sur la distribution d’assurances (DDA).

What should we do with PERP, “Madelin” or “article 83” contracts still in our portfolio?

Since 1 October 2020, PERPs and “Madelin” contracts no longer accept new members; a new “article 83” scheme takes the form of a PER, but existing contracts can still take in new employees. Contracts in force continue to operate. The rights they hold can be transferred to a PER, at the member’s request or, in some cases, through a collective operation, after the guarantees and charges have been checked.