Almost twenty years ago, the “Fourgous” amendment, integrated into the Breton law of July 2005, gave the first blow to the structure of the life insurance market.
It authorized the transformation of a single-support contract (invested in a fund in euros, the non-risky support of life insurance) into a multi-support contract (comprising various investments), provided, in particular, that at least 20% of the 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 integrating 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 the game”
Provided you stay with the same insurer, you can in theory, without cost, replace an aging, expensive and unprofitable offer with a more efficient multi-support service with lower costs. But “not all insurers play the game in the same way depending on whether or not they have an interest in supporting the customer’s request”notes Philippe Parguey, general director of the Nortia heritage platform.
A few benchmarks are necessary to survey the field of possibilities opened up by the Pacte law. First, changing companies always requires “repurchasing” (partially or totally withdrawing) the assets accumulated on your old subscription before replacing them on the new one. Your operation could be taxed, depending on the date the contract was opened, that of the premium payments (before or after September 27, 2017), and depending on the amounts held (more or less 150,000 euros).
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The situation changes for a swap of products with the same insurer. The Pacte law allows the holder of a contract to transform it without the tax impacts of an outcome. The operation can be done by amendment to the contract or by a new subscription – its effective date will be that of the first signature. The insurer must inform its customers each year of this possibility and the transfer conditions it offers.
A non-coercive law
However, the law is not coercive. The transfer is permitted… 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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