The ACPR lectures life insurance distributors after failing controls

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 checks, the ACPR noted shortcomings in the marketing of life insurance contracts to financially fragile or struggling customers,” explains a press release.

These contracts “are likely to worsen their financial situation” since these customers “do not have precautionary savings to meet their short-term cash 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 contract due to lack of liquidity” and the place units of account (UC), a “risky allocation cannot be adapted to the needs of customers whose financial situation is fragile at the time of subscription”.

1.857 billion euros in assets

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 had addressed another point of vigilance vis-à-vis professionals selling online savings products, falling under “the numerous cases of non-compliance with the regulations concerning the information and informed consent of the client”.

Le Revenu, with AFP

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