FRANCE Trends and Developments Contributed by: Rima Maitrehenry, Racine
life insurance contracts and retirement savings plans to hold a minimum proportion of unlisted assets. This initiative marks a turning point in savings management. Retirement savings and life insurance contracts will have to include a proportion of unit-linked invested in non-listed assets, which helps the financing of the decar - bonisation of small and medium-sized enterpris - es (SMEs) and intermediate-sized enterprises ( entreprises de taille intermédiaire – ETIs). The Act require insurers to offer a managed life insurance contract, by means of an arbitrage mandate, which includes a minimum propor - tion of unlisted assets. By directing a portion of life insurance savings towards unlisted assets, the Act hopes to steer more investors towards companies and projects that make a tangible contribution to the real economy. Two imple - menting orders ( arrétés ) of the Act, dated 1 July 2024, have been enacted and specify the terms and conditions of this arbitrage mandate (also called an insurer’s guided solution ( gestion pilo- tée )). The guided solutions proposed by insurers depend on the risk profile chosen by the policy - holder from among the following: • prudent; • balanced; and • dynamic. Each profile entails the following minimum allo - cation to unlisted assets (such unlisted assets include alternative investment funds eligible for unit-linked life insurance contracts): • prudent, 0%; • balanced, 4%; and • dynamic, 8%. For retirement savings, the risk profile chosen by the policyholder could include an offensive
profile (in addition to the three profiles described above). The minimum allocation to unlisted assets depends on the risk profile and on the investment horizon chosen by the policyholder (for example, an investment of more than 20 years with an offensive profile entails a minimum allocation to unlisted assets of 15%). As an implementing measure of the Act, two decrees published on 5 July 2024 (Decrees No 2024-713 and No 2024-714) and applicable as of 24 October 2024 modernise the invest - ment universe for life insurance, capitalisation and retirement savings plans by expanding the list of assets eligible for life insurance contracts and retirement saving plans to include special - ised financing funds ( organisme de financement spécialisés , or OFS), and facilitating the condi - tions for subscribing to unit-linked representing ELTIFs. Certain French private alternative investment funds commonly used to invest in unlisted companies, such as FPCI ( fonds professionnel de capital investissement ), FPS ( fonds profes- sionnel spécialisé ) and SLP ( sociétés de libre partenariat ) can be included in unit-linked life insurance contracts if they comply with the fol - lowing conditions: • these funds must comply with the 50% investment quota referred to in Articles L214- 28 and L214-159 of the French Monetary and Financial Code (FMFC); • the policyholders must be considered, after evaluation, to have the experience, knowl - edge and competence necessary to make their own investment decisions and correctly assess the risks incurred, and must allocate a premium of at least EUR100,000 for investing through the unit-linked life insurance con - tracts in such funds; and
163 CHAMBERS.COM
Powered by FlippingBook