The transfer of contracts from one insurer to another is a subject that is regularly on the agenda. But on 31 January 2023, a new step was taken. On that day, the Senate voted on the first reading of the bill containing the provision on the transferability of life insurance policies.

What does this mean?

Today, customers holding life insurance contracts are bound to the insurer managing the contract. Since the PACTE law of 2019, it is possible to change the contract within the same insurer but in case of external "transfer", the tax precedence and its various advantages are lost. In this case, it is more a question of opening a new contract with all the consequences that this implies. The problem lies in the fact that an insured person has to keep his policy with his insurer or bank even though he is no longer an active client. Clients are therefore sometimes led to pay their funds into contracts with partners with whom they do not wish to work.

The Senate's wish:

Portability as desired by the Senate consists of the possibility for a holder of a life insurance contract of more than eight years to change insurer while retaining the advantages acquired. This would significantly modify the functioning of this envelope. According to the authors of the text, the aim is to give the policyholder "free choice" and to encourage greater competition between the products available on the market.

Why are insurers so worried?

According to the market players, this could have major consequences on the functioning of all existing contracts. Indeed, in order to be able to respond to policyholders' requests for transfers and to honour their capital guarantees, insurance companies would be forced to adapt their asset management. They would have to adopt shorter-term strategies and maintain large pockets of liquidity. This would pose a significant risk of lower long-term returns.

Life insurance is a quality solution that represents an opportunity for everyone. In the current context, it is essential to be accompanied by a professional. Wealth A7 can accompany and advise you, contact us!

In a changing world, Wealth A7 is there to bring your wishes to life.