The Prudential Control and Resolution Authority (ACPR) called to order life insurance professionals on Tuesday who did not respect their duties of advice to fragile public, after a series of failing controls. “Following several on-site inspections, the ACPR noted shortcomings in the marketing of life insurance contracts to financially fragile customers or customers in difficulty“says a press release. These contractsare likely to worsen their financial situation“as soon as these customers”do not have precautionary savings to meet their short-term cash flow needs“, continues the regulator.
The information documents must, for example, clearly indicate that an investment horizon of at least 8 years is recommended, due to the taxation of life insurance contracts subject to penalties in the event of surrender. The ACPR, backed by the Banque de France, also points to “particularly penalizing entry and management fees if they (customers) are forced to quickly redeem their life insurance policy due to lack of cash» and the place of the units of account (UA), a «allocation of a risky nature cannot be adapted to the needs of clients whose financial situation is fragile at the time of subscription“.
The French life insurance market has experienced particular enthusiasm since 2021, which is continuing this year: it recorded net inflows of 8.4 billion euros in the first quarter, an amount not seen since 2011 for this period of the year, according to figures published last week by France Assureurs. Its total outstanding amount is 1.857 billion euros, according to the same source. On April 21, this time alongside the Autorité des marchés financiers (AMF), the ACPR addressed another point of vigilance vis-à-vis professionals selling savings products online, noting “numerous cases of non-compliance with regulations concerning client information and informed consent“.