French Insurance Code
In forceI.-When one or more of the units of account referred to in Article L. 131-1 are made up of units or shares in a collective investment undertaking whose redemption or issue of units or shares has been suspended and which is unable to publish a net asset value, the insurance undertaking may:
1° Propose to the policyholder or beneficiary that he/she pay out surrenders, lump-sum benefits in the event of life or death and annuity payments on the conversion date in the form of units or shares in the undertaking for collective investment ;
2° Suspend or restrict, for this part of the contract only, the options for arbitration, premium payments, surrenders or transfers, payment of benefits in the event of life or death and conversions into annuities;
3° As part of the information it sends to the policyholder, calculate the guaranteed capital or annuities of the contracts without taking account of the part of the contract expressed in units of account made up of shares or units in the collective investment undertaking concerned. The company then indicates that this part of the contract has not been included in the calculation of the guaranteed capital or annuities due to the absence of a net asset value.
II.When one or more units of account mentioned in article L. 131-1 are made up of units or shares in a collective investment undertaking whose redemption or issue of units or shares has been suspended and which is able to publish a net asset value, or which is subject to a temporary ceiling on the redemption of its units or shares, the insurance undertaking may:
1° Propose to the policyholder or beneficiary that, in addition to the cash settlement on this part of the contract, all or part of the surrenders and lump-sum benefits in the event of life or death be settled in the form of units or shares in this collective investment undertaking;
2° Suspend or restrict, on this part of the contract only, the option of arbitration and premium payments, the possibility of surrenders or transfers, the payment of benefits in the event of life or death and conversions into annuities.
A decree of the Conseil d'Etat shall specify the methods for calculating the surrender value when the temporary cap on redemptions of units or shares of the undertaking for collective investment concerned results in orders, necessary for the execution of the provisions and options provided for in life insurance and capitalisation contracts, being executed at different net asset values.
The Autorité de contrôle prudentiel et de résolution may question the suspension or restriction decisions taken by the insurance undertaking pursuant to 2°. It shall take its decision within thirty days of the date on which the suspension or restriction began. When a suspension or restriction decision is called into question by the Autorité de contrôle prudentiel et de résolution, requests for surrenders, transfers, arbitrages, premium payments, payment of benefits in the event of life or death and conversion into annuities received during the suspension period are exercised on the basis of a surrender value whose calculation is based, for this part of the contract only, on the net asset value of the units or shares of the collective investment undertaking concerned, which would have been used had the insurance undertaking not exercised this option to suspend or restrict.
In making its decision, the Autorité de contrôle prudentiel et de résolution will take into account the interests of the policyholders and beneficiaries of the insurance undertaking, the potential impact on its balance sheet of measures to suspend the redemption or issue of units or shares or to place a temporary ceiling on the redemption of units or shares in collective investment undertakings, and its ability to honour its insurance commitments in the future.
III - The insurance undertaking shall inform the Autorité de contrôle prudentiel et de résolution without delay of the exercise of the options provided for in I and II. This information is also communicated to the policyholders concerned.
IV - All of the provisions of this article are applicable notwithstanding the settlement periods stipulated in articles L. 132-21 and L. 132-23-1 or any other contractually stipulated period or valuation method relating to the above transactions.
V.-The terms of application of this article are specified by decree in the Conseil d'Etat.
