‘Assurance vie’ firm in debt, 30,000 contracts in France at risk
The company was granted one month to submit a ‘realistic short-term financing plan’ in a bid to save policyholders’ frozen assets
The funds of 30,000 policyholders in France are currently frozen as the company works out a possible solution for insolvency
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Around 30,000 life insurance - ‘Assurance vie’ - policies in France are at risk after a company in Luxembourg announced its insolvency.
FWU Life Insurance, which although based in Luxembourg has been operational in France since 1997, said it was insolvent in mid-July, due to too-high debts.
Now, the bank and insurance watchdog, L'Autorité de contrôle prudentiel et de résolution (ACPR), said that 30,000 policies in France could be affected by the company’s insolvency. The customers’ assets are currently frozen.
The company has been struggling for years, but particularly since August 4, 2022, when Luxembourg's insurance supervisory authority, the Commissariat aux Assurances (CAA), fined the company €200,000 for "deficiencies detected in the product supervision process and governance requirements".
It was also banned from marketing its products in France.
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The problems intensified when FWU Life Insurance said that it could no longer meet “the Solvency Capital Requirement and the Minimum Capital Requirement". This meant that the company declared “insolvency…due to its excessive indebtedness”, the CAA stated in a press release on July 19.
Since that date, the company has had one month to "submit a realistic short-term financing plan to the CAA, with a view to bringing eligible core capital up to the minimum required level" within three months.
The company was also granted a six-month deferment of payment on August 2.
If it is not able to pay, however, it risks having its insurance company authorisation withdrawn, which would put policyholder funds at risk.
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This is because "the safeguard measures taken by the CAA to ensure fair treatment of policyholders and beneficiaries" do not allow the insurer "to pay the benefits provided for in the contracts", the CAA said.
