Almost twenty years ago, the “Fourgous” amendment, integrated into the Breton law of July 2005, dealt the first blow to the structure of the life insurance market.
Authorized the transformation of a single support contract (invested in a euro fund, the risk-free support of life insurance) into a multiple support contract (comprising several investments), provided that, in particular, at least 20 % of savings are invested in units of account, the risky supports of life insurance. And this, without loss of tax precedence for the subscriber.
This possibility was extended in 2014 to contracts that make up a Eurocroissance fund and in 2019, by the Pacte law (Action plan for business growth and transformation), to all contracts insured by the same company.
“Not everyone plays”
As long as you stay with the same insurer, you can, in theory, at no cost, replace an outdated, expensive and unprofitable offering with a more efficient, lower-cost multi-support service. But “Not all insurers play the same way depending on whether or not they have an interest in supporting the client’s request”says Philippe Parguey, general director of the wealth platform Nortia.
Some points of reference are necessary to examine the field of possibilities opened by the law of the Pact. First, changing companies always requires “buying back” (fully or partially withdrawing) the assets accumulated in your old subscription before replacing them with the new one. Your transaction could be taxed, depending on the date of opening the contract, the date of premium payments (before or after September 27, 2017), and depending on the amounts owned (more or less 150,000 euros).
The situation changes for an exchange of products with the same insurer. The Pacte law allows the owner of a contract to transform it without the fiscal impacts of a result. The operation may be carried out by modifying the contract or by new subscription – its effective date will be the date of the first signature. The insurer must inform its clients every year of this possibility and the transfer conditions it offers.
A non-coercive law
However, the law is not coercive. The transfer is allowed… but the insurer is not obliged to carry it out. “The possibilities and conditions of transformation are entirely defined by the insurer”confirms the Prudential Control and Resolution Authority.
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