Life and financial reinsurance
We draft and review life reinsurance treaties, in particular between Luxembourg and French insurers, and act for reinsurers in their claims and disputes.
FranceLuxembourg
In , reinsurance covers the mortality risk and financial commitments: a Luxembourg insurer can, for example, have the euro-denominated commitments of its contracts reinsured in France.
For the ceding insurer as for the reinsurer, the must match the contracts reinsured: cover, exclusions, profit sharing (participation aux bénéfices), conditions for amendment. Cover granted by the contract but excluded by the treaty remains the responsibility of the insurer, which alone is bound to the insured.
What we do
Life reinsurance treaties
- Drafting and negotiating treaty terms and conditions.
- Consistency of treaty definitions, exclusions and conditions of cover with the reinsured contracts, particularly for death cover.
- Analysis of the counter-guarantees attached to treaties.
Luxembourg commitments reinsured in France
- Reinsurance by a French insurer of the euro-denominated commitments of Luxembourg insurers, backed by its (fonds en euros).Euro fund (capital-guaranteed general fund)A life insurance investment option whose capital is guaranteed by the insurer, which credits it each year with a share of its profits (participation aux bénéfices).
- Defining entry “gates” (limits on payments into the fund) and the terms for allocating profit sharing.
- Reflecting the provisions linked to the reinsurance commitments in the Luxembourg contracts.
- Conditions for amending the reinsured commitments.
- Reinsurance of collective internal funds () with a non-guaranteed return: the treaty and each fund’s financial information.Collective internal fund (FIC)An internal fund of a Luxembourg insurer that is open to several policyholders. There are five types, from N to D, each available to policyholders of the corresponding category.
Treaties and portfolio transactions
- Review of treaties on an acquisition, a restructuring or a .Portfolio transferA transaction by which an insurer transfers all or part of its contracts to another insurer, with the approval of the supervisory authority.
- Reinsurers’ consent to these transactions, where the treaties so provide.
- Life reinsurance treaties in the restructuring of mutual insurance groups.
- Treaty commutations and proofs of debt in a liquidation.
Claims and disputes
- Claims reviews on behalf of reinsurers.
- Monitoring serial claims.
- Conducting litigation on behalf of reinsurers.
- Disputes between the ceding insurer and the reinsurer over the performance of treaties.
Examples of matters
- 01
Setting up, in the mid-2000s, a euro fund offer reinsured in France for Luxembourg life insurance contracts.
Frequently asked questions
Can a Luxembourg insurer have the euro-denominated commitments of its contracts reinsured in France?
Yes, this structure is used in practice. The treaty transfers the contracts’ euro-denominated commitments to a French insurer acting as reinsurer, and their return then depends on that insurer’s euro fund. The treaty sets the allocation of profit sharing, any limits on payments and the conditions for amending the commitments. The Luxembourg contracts and the information given to policyholders must reflect these choices, in compliance with the rules of the (the Luxembourg insurance supervisory authority).
Can a treaty’s exclusions be wider than those of the reinsured contract?
In principle, yes: the parties are free to define the treaty’s cover. But the treaty and the contract remain two separate agreements, and the insurer that reinsures itself remains solely liable to the insured (Article L. 111-3 of the Code des assurances, the French Insurance Code). A claim covered by the contract but excluded by the treaty therefore stays with the insurer. Consistency of definitions, exclusions and conditions of cover is checked at signature, then whenever the contracts are amended.
How can a reinsurer approach serial claims?
By identifying them early: common origin, contracts affected, applicable treaties. A review of the files measures the reinsurer’s exposure and checks that the ceding insurer is handling the claims in line with the treaty. The reinsurer can then set its approach for the whole series, which avoids arguing contradictory positions from one file to the next, without ruling out a settlement where one is possible.
What happens to reinsurance treaties on a portfolio transfer?
They do not necessarily follow the portfolio: it all depends on their terms, in particular the assignment, change of control or termination clauses. The treaties attached to the portfolio must therefore be identified, the reinsurers’ consent obtained where required and, if need be, a commutation or new treaties negotiated with the transferee.