Insurers want to change certain parameters of life insurance (Credits: Fotolia)
In the white paper it has just published, France Assureurs (ex-FFA, French federation of insurers) makes 4 proposals to develop life insurance and the PER.
In the white paper it has just published, France Assureurs (ex-FFA, French federation of insurers) makes 4 proposals to develop life insurance, in order to enable it to play its role even better in the service of the economy productive and to adapt to changes in French society and lifestyles.
Transmission: updating certain life insurance parameters unchanged for 30 years
Life insurance can transmit up to 152,500 euros to each beneficiary free of inheritance tax. However, for payments made on the contract after 70 years, the tax advantage is reduced and it is only possible to transmit 30,500 euros to all the beneficiaries without inheritance tax.
France Assureurs wishes to develop life insurance to stick as closely as possible to changes in society and French lifestyles and proposes, in this spirit, to update certain parameters of this product, related to life expectancy or at the cost of living, in the case of transmission.
Thus, insurers are proposing to index the pivot age on the lengthening of life expectancy and thus bring this pivot age to 75 years, against 70 years today.
They also propose to index the amount of allowances in the event of transmission by increasing them from 30,500 to 46,000 euros and from 152,500 to 204,000 euros.
Raise the ceiling of deductible payments on the PER
Launched in October 2019, the Retirement Savings Plan (PER) has become a reference retirement product for the French which contributes significantly to the financing of the productive economy. Making retirement a long-term investment would support the economic recovery of businesses. Also, insurers propose to raise the ceiling of deductible payments on the PER from 10 to 20% of professional income.
Promoting cost transparency to savers
Insurers have regulatory obligations in terms of cost transparency. This transparency, combined with the very strong competition existing on the life insurance market, already constitutes a protection for savers.
France Assureurs signed an industry agreement on February 2, 2022 to strengthen the transparency of PER and life insurance costs, initiated and orchestrated by the Ministry of the Economy, Finance and Recovery based on the Committee’s proposals financial sector advisory (CCSF).
Thus, from June 1, 2022, distributors of PER and life insurance will have to post on their website a standard table grouping the costs by category. France Assureurs intends to publicize and recognize this new obligation among savers, which demonstrates the desire of the insurance sector to work for the simplification and transparency of offers for the benefit of savers.
Improving information for retail investors
The “PRIIPs” document is a regulatory document that must be provided to the saver prior to subscription. It aims to standardize pre-contractual information on financial products offered to non-professional investors and thus facilitate comparison between investment products.
However, this document is often complex for savers to understand. Also, insurers are considering proposing a new “PRIIPs” document, in line with the expectations of policyholders and which, as far as possible, would respond to objections to the complexity of current regulatory mechanisms.