Eurovita, here’s what can happen to customers
Fifteen billion and three hundred million in assets under management, invested by 353,000 customers in 414,000 policies and a solvency ratio below the minimum threshold of 150%. They are the numbers of Eurovita, the company commissioned by IVASS last January. The latest figure was patched up with the receivership and freezing of redemptions until the end of March decided by IVASS at the beginning of February.
But it is the other two numbers that are attracting attention now. The crisis, underlines the lawyer Maria Lufrano who has been assisting some of the company’s customers for about a year, was not born with the commissioner. “We have managed to help several people, but it is necessary to try to protect as many as possible”.
Sixteen billion in assets and 353,000 customers in Eurovita
The Life policies sold by the company were distributed through a network of 2,500 branches of various banks. In all respects, these are savings products. The commissioner Alessandro Santoliquido he has until March 31 to secure the company.
The contribution of the English fund Cinwen, 100 million in non-repayable capital account, are a step forward but still not enough. The indiscretions collected indicate the goal of new capital at 400 million. A “system” solution is being studied with the involvement of other companies and banks. The crisis was triggered by the increase in interest rates which suddenly reduced the value of the securities in the portfolio.
Separate management
However, it remains to be clarified what will happen to customers after March 31st. That is the fate of existing policies. In general, traditional life insurance policies, defined as Branch I, are collected in the so-called “separate management”, which invests the funds paid by customers. In practice, it is a separate asset from that of the company, which can only be collected by customers.
In the financial statements, the securities of the separately managed account are recorded at purchase cost until they are redeemed. Any fluctuations in the stock – positive or negative – with respect to the purchase cost are accounted for in management. But any losses only partially affect the customer, who has the guarantee of 100% repayment of the capital. However, this guarantee is lost in the event of the liquidation of the company. In that case, the separate management is also liquidated and the customer collects the proceeds from the sale.
The insurance funds
The case of multi-branch insurance policies, known as di, is different Branch III. Generally, they consist of a part in separate management and a part invested in insurance funds. While the guarantee of repayment of 100% of the capital is valid for the first part, there is no guarantee for the part invested in funds. But a market valuation as is the case for any investment fund. With potential losses in the event of sustained declines in value.