Good news for holders of life insurance contracts slipped into the Official Journal of May 19: the executive approved an amendment to the regulations of the Autorité des marchés financiers, which will prohibit certain fees applied by companies. management to life insurance contracts.
These are movement commissions, fees that are deducted from you when you carry out transactions to buy or sell units of account by the managers of certain funds, and which are added to the brokerage fees already applied. for these arbitrations by the distributors of the contracts.
A welcome initiative at a time when life insurance and PER are particularly expensive for savers: various costs accumulate on these contracts, which, stacked up and repeated over time, result in a very steep bill that greatly reduces the return “real” of these investments.
The movement commissions, the double penalty…
Among this long list of invoicing lines (management fees, annuity arrears fees, transfer fees, kickbacks, etc.), movement commissions were in the sights of the authorities. The Senate, in particular (but also the AMF therefore), had come out in favor of their abolition in a report made last year on the abusive pricing of financial investments.
Not systematically applied, they are however considered by part of the profession as a scandalous practice, knowing that these commissions alone represent a small jackpot of 500 million euros per year for management companies, and as much less in the pockets of life insurance investors.
From the point of view of “informed information” for customers – which distributors are required to do – but also of their justification, movement commissions are indeed very questionable.
On the one hand, these are not transparent, as they are deducted from the net asset value of assets. To find out about its existence, it will be necessary to refer to the Key Information Document (the “Dici”) and consult the amount of ongoing charges deducted the previous year by the fund… tedious.
On the other hand, these commissions are quite clearly akin to double invoicing, since the holders of the contracts are invoiced twice for the same operation: by their life insurance distributor (insurance companies, mutual insurance companies, brokers, etc.) and by the management company of the fund hosted in the contract.
A ban planned for 2026
In short, the prohibition of these fees – which is already a reality in the rest of Europe – is excellent news. With one detail, however: it will not come into force until January 2026! ” Some management companies will therefore be able to continue to take around 500 million euros per year from the pockets of savers. Or 2 billion euros from 2022 to 2025. It’s good for the purchasing power (of management companies)! “, commented this morning Philippe Maupas, on his twitter account.
A specialist in collective management, Mr. Maupas is one of the few professionals in the sector to have openly denounced movement commissions. Commissions which he had described as ” practices worthy of a banana republic in an interview given last October.
Their disappearance will not alone resolve the abusive pricing of certain life insurance and PER contracts. Other fees also raise the question of their legitimacy, such as performance fees and kickbacks.
Unit-linked fees: information soon to be reinforced
Between now and 2026, the banking-insurance sector will however be asked to make some efforts, at least in terms of price transparency. Called to order by Bercy, alarmed by the average level of PER costs, its players have undertaken to publish, as of next month, on their websites, a general table of the costs of their life insurance contracts and their PER in a standardized form, which remains perfectible, since the costs will be expressed as an “average” for all the units of account (UA).
With more enthusiasm, the executive has legislated on its side, by imposing, from July 1, 2022, that the total costs of unit-linked units during the last closed financial year appear in the pre-contractual information of life insurance contracts, capitalization and PER.
Above all, from January 1, 2023, this mention will be mandatory for each CU in the documents of the annual information campaigns. The companies will even have to specify the performance of the support, before and after the levy of their tariff millefeuille… enough to knock a lot of savers out of their chairs!
This new framework will allow consumers to get a better idea of the pricing of their contracts and to compare offers on the market more easily. While waiting for certain costs to drop, or possibly disappear…