On 30 March 2022, the French regulator, the Autorité de Contrôle Prudentiel et de Résolution (ACPR) published a new sanction. This publication provides some key clarifications on the ACPR’s position with regard to dormant contracts. We see that as an opportunity to analyze the essential points that any insurer or mutual must respect in France. This document does not intend to be exhaustive. It is simply intended to focus on the main points that emerge from the latest published elements.
Reminder of key regulatory requirements
The regulation of dormant contracts is not limited to the French Eckert Act of 2014 alone. It includes, in addition to general obligations under the French Insurance Code, eight laws published between 2005 and 2021. These are the following pieces of legislation:
- 15 December 2005 (N° 2005-1564)
- 17 December 2007 (N° 2007-1775)
- 26 July 2013 (N° 2013-672)
- 29 December 2013 (N° 2013-1279)
- 13 June 2014 (N° 2014-617 known as Eckert Law)
- 9 December 2016 (N° 2016-1691known as the Sapin II law)
- 22 May 2019 (N° 2019-486 known as the PACTE Law)
- 26 February 2021 (N° 2021-219)
Two main requirements
The first essential requirement is the obligation to identify deceased insured persons. This obligation is prior to the Eckert Act. For example, Law 2007-1775 which amends Article L. 132-9-3 of the Insurance Code. This law obliges insurers to consult the INSEE file of deceased persons. This file is the RNIPP (Répertoire national d’identification des personnes physiques). Subsequent texts specify the periodicity of this consultation (annual with Law 2013-672). They also introduce an obligation to inform the ACPR of the number and outstanding amount of unliquidated contracts for which members have exceeded the retirement age. Law 2016-1691 also specifies the means used to inform them.
Second essential requirement: the insurer must, as soon as a death is known, search for the beneficiary(ies) of the contract.
The Eckert Act (2014-617) imposes this obligation. In particular, insurers must contact the tax authorities and consult the notary in charge of the succession.
The obligations of insurers and mutual societies
No exception depending on the nature of the contracts.
This is one of the complaints that the ACPR formulated very early following its control missions in its sanctions made public.
The ACPR based its sanction 2013-03 bis on “the provisions of Article L. 132-8 of the Insurance Code combined with those of Article L. 132-9-3 of this Code, which require insurers to implement the necessary means to process without any distinction all the files for which a death information by querying the RNIPP file has been obtained“.
In the 2013-05 sanction one of the ACPR’s grievances concerns an “incomplete” perimeter certain insured persons (death date prior to 1978, collective retirement contracts ,.) had been excluded. In addition, the ACPR clearly establishes that the thirty-year prescription does not apply “Article L. 132-9-3 of the Insurance Code does not provide for any exclusion or limitation as to the search for the possible death of the insured on life; that, in particular, it contains no mention of the thirty-year limitation period and its effects“.
Important details in 2014 sanctions
The ACPR specifies (sanction 2014-01), that collective contracts are indeed subject to the same obligations as other contracts “large portfolios of life insurance contracts have been excluded from the scope of this identification, in particular collective contracts“.
With the 2014-09 sanction, the ACPR makes a clear reference to the content of its annual report for 2012 by indicating in its sanction: “the general nature of this obligation, the scope of which does not exclude contracts considered to be of small amount and those devoid of mathematical provisions by nature“. The so-called tempo décès (temporary death insurance) contracts are therefore clearly included in the scope of this regulation.
In 2019, (sanction 2019-02) the ACPR defines the contracts concerned even more broadly as bearing “commitments whose execution depends on the duration of human life; it follows that no commitment meeting that definition can be excluded from the operative part’. This definition is a way of including pension contracts with no cash value. And the ACPR also specifies the obligation to “implement the necessary means allowing a general and systematic search for the possible death of their members and this, by not excluding from their research any category of contracts“. It should be noted that one of the sanctioned bodies had referred the matter to the French Conseil d’Etat. The Council fully confirmed this position of the ACPR by its decision No. 438374 of 7 October 2021.
No age or minimum amount filters
The ACPR provided details on this point in its annual report for 2012. This report states that some insurers had wrongly withdrawn group insurance contracts from the scope. Also in its 2013 report, the ACPR states that “too many insurers have introduced selection criteria or portfolio exclusions”.
The ACPR accuses, with its sanction 2014-01, the insurer that the RNIPP consultations were wrongly filtered (age over 90 years and outstanding above 2000 euros). And indicates “what has led to making practically inoperative the obligation to identify deceased insureds“.
We can also see with the sanction 2014-09, that the ACPR specifies that the perimeter must be complete. It states that “the consultations of the RNIPP carried out […] concerned an incomplete scope, […] having made selections which wrongly led it to exclude a significant number of insured persons‘.
A delegation of management does not remove any obligation from the insurer or the mutual
The ACPR clearly specifies (sanction 2021-02) that the presence of a management delegation does not reduce the responsibilities of the insurer or mutual. Precisely the ACPR states: “However, the delegation of management of part of the contracts “article 83” has no bearing on the obligation of the insurer to respect, as far as they are concerned, its obligation to provide annual information. »
In the context of collective contracts informing the company is not enough.
Just recently, with its sanction 2021-02, the ACPR clearly rejects the argument that informing the company is sufficient. The ACPR states that “the insurance undertaking is the debtor of an annual information obligation only vis-à-vis the undertaking which has subscribed to the contract“. The insurance undertaking is therefore obliged to inform each member (each employee) and not only the employer who has signed the contract.
It appears, in summary, that the position of the ACPR has remained stable since 2013. Three points emerge from the latest published elements:
-1- There can be no question of excluding contracts or insured persons from the scope of this regulation.
As such, the recent decision of the Council of State is unambiguous. This applies not only to life insurance contracts, collective pension contracts but also to pension contracts, whether collective or individual. Reference can be made to the ACPR’s 2019 annual report. This document states: “Their scope, which cannot be reduced solely to life insurance contracts with a savings dimension, therefore extends to permanent and absolute disability IPA / death and temporary death guarantees, which have the character of commitments whose execution depends on the duration of human life, even when they appear in pension contracts including guarantees excluding life insurance. ».
-2- The obligation of insurance undertakings relates to informing members in the context of collective contracts and not only to informing the contractor.
As we have indicated, this point is clear from the latest sanction (2021-02).
-3- A delegation of management does not reduce the obligations of insurance companies.
This should be noted because in the context of collective contracts there can be a more or less important delegation. Despite this, the insurance company remains liable.
Note: ACPR sanctions are sometimes public and can be anonymized. With regard to the six sanctions concerning disinheritance, the ACPR insisted on making its decisions public, but with anonymization after five years. This deadline has already been reached for the first sanctions, which is why we will not indicate the names of the insurance companies concerned.