Madoff in multi-carrier life insurance contracts ? 

Hedge funds and insurance. Multi-vehicle life insurance contracts lost all value in 2008 and 2009 when unit-linked assets consisted of high-risk, high-yield products from securitization transactions and backed by low-level mortgage claims. reliable. Indeed, these units of account can be composed of assets of alternative management funds themselves composed of assets of other funds , themselves invested in alternative funds, known as hedge funds (funds of funds of funds !), having bought out bad debts that are now worthless. During this same period, subscribers of life insurance contracts could have been completely ruined when the units of account of their contracts were made up of collective investment funds (UCITS) or diversified SICAVs which drained their savings into the LuxAlpha investment fund, managed by the Swiss bank UBS, or Thema, managed by the British bank HSBC. Indeed, these funds were themselves invested through foreign funds in companies of Bernard Madoff, who was sentenced, on June 25, 2009, to 150 years in prison for having organized a fraud that cost around 65 billion euros. dollars to nearly three million savers.   

Legal actions by French savers. In France, some savers have brought civil proceedings against insurance companies and banks which had advised them to take out such contracts on various grounds, such as that of Article L. 131-1, paragraph 2, of the Insurance Code, under the terms of which the transferable securities and the assets of the units of account must offer sufficient protection of the savings invested, or even the nullity of the contract for error of substance. For the time being, these procedures have not been successful, the French courts tending to stay the ruling pending the decisions of the Luxembourg courts themselves seized of liability actions against the depositaries and managers of this Sicav. . Legal information was also opened, in particular for fraud. At the beginning of 2012, they had still not succeeded.     

Control of regulatory authorities . On the side of the French regulatory authorities, we note two things. On the one hand, they authorized the marketing in France, in 2005, of the Luxembourg S icav LuxAlpha. On the other hand, when the Madoff affair came to light, the Autorité des marchés financiers (AMF) refused to publish the list of French funds contaminated by these toxic products and insurance companies, leaving policyholders and savers to their concerns.

Payment of benefits. In contracts denominated in units of account, in principle, the beneficiary must be settled in cash, that is to say that he receives in payment the equivalent value of the unit of account (C. assur., Art. L. 131-1, al. 2). However, by way of derogation, he may opt for the delivery of shares or units as soon as they are negotiable and do not directly confer voting rights at the general meeting of shareholders of a listed company. However, following the 2008/2009 financial crisis and especially of u problem Madoff funds, we realized that the recipient could receive nothing: firstly, because the units of account were worth strictly nothing, on the other hand, because they were no longer negotiable, even if they could eventually become so again. So to remedy this, Law No. 2010-737 of 1 ^st July 2010 on the reform of consumer credit she added , in the second paragraph of section L. 131-1 , the rule which : " in the event that a UCITS has been split ..., the insurer offers the contracting party or the beneficiary the payment corresponding to the shares or units of the body resulting from the split and which received the assets whose sale would not have not been in accordance with the interests of shareholders or unitholders, in the form of delivery of shares or units in this body ”. Also in the event that the securities resulting from the division of the investment vehicle regain a certain value, the beneficiary will not have lost everything !