Exceptions to the blocking of redemptions for Eurovita customers
The good news is that after over five months of tensions comes the desired system solution for Eurolife. The less good news is that policy redemptions are blocked for another four months, until October 31st. The agreement involves cfive insurance companies, 25 banking groups that have distributed the policies, plus six other institutions that will partially finance the operation. They also worked on the agreement Ivass, Bank of Italy and two ministries: Mef e Mimi. The number of actors involved is sufficient to refute those who have argued that the Eurovita crisis does not represent a risk for the entire insurance sector.
Which banks are participating in the bailout
I 353 thousand customers will be divided between Unipol, Generali, Intesa Vita, Poste Vita and Allianz. To the placement banks (Banca Agricola Popolare di Ragusa, Banca di Credito Popolare, Banca di Piacenza, Banca Fideuram, Banca Investis, Banca Popolare dell’Alto Adige, Banca Popolare di Lajatico, Banca Popolare di Puglia e Basilicata, Banca Popolare Sant’Angelo, Banca Profilo, Banco Desio, Bnl, Cassa di Risparmio di Volterra, Cassa Lombarda, FinecoBank, Finint Private Bank, Monte dei Paschi di Siena, Iccrea, Cassa Centrale Banca, Cassa di Risparmio di Bolzano, Credem, Credit Agricole, Unicredit, Mediobanca, Ubs Italia) will be responsible for taking over the contracts of those customers who wish to redeem in advance. For those institutions for which the management of redemptions could have a negative impact on capital and liquidity ratios, a loan from a pool of banks is ready. The pool consists of Banco Bpm, Banca Monte dei Paschi di Siena, Bper, Credit Agricole, Intesa Sanpaolo and Mediobanca.
The costs for the system
The securing of 413,000 policies for a total of 15.3 billion it’s not free. The operation is valid about six billionconsidering i 500 million euros of the recapitalisation, i 4.5 billion made available by the placement banks e the billion provided by the pool of banks. The contribution of the placement banks also serves to avoid the “leakage” from the policies Eurovita once acquired by the five companies. With networks that would have an interest in offering their customers other products. Leaving the five companies to handle an empty box.
Redemption blocking and exceptions
The agreement provides for the establishment of a new company owned by the five companies into which the contracts of the 353,000 customers are merged. The additional blocking of redemptions also serves to manage the transition phase and allow the transfer of contracts to the newco. However, there are exceptions to the block. Are excluded Indeed “settlements by maturity and claim and the cases of redemptions and advances concerning supplementary pension schemes“explains a notice from the company. The payment of the installments has also been blocked, which however will have to be paid in full after 31 October.