New Allocation Requirements for Managed Life Insurance Portfolios
A decree has been issued clarifying the allocation requirements for managed life insurance policies.
Insurers will be required to comply with these new rules starting October 24, 2024, in order to standardize the allocation of the three main investment profiles: conservative, balanced, and aggressive.
This new decree aims to standardize asset allocations for managed life insurance portfolios by imposing allocation requirements for conservative, balanced, and aggressive investment profiles. Insurers will be required to comply with these new rules effective October 24, 2023, in order to provide greater clarity to investors and facilitate comparisons among the various products available on the market.
A minimum investment in low-risk funds
For a portfolio to be classified as “conservative,” at least 50% of the assets under management must be invested in low-risk assets. This percentage drops to 30% for the “balanced” profile and to 20% for the “aggressive” portfolio. If the policyholder’s investment horizon exceeds 10 years, an exception allows for a reduction in the minimum proportion that must be invested in low-risk investments for each profile.
A Mandatory Investment in Unlisted Assets
Effective October 24, 2024, the “balanced” and “dynamic” profiles of life insurance management mandates must invest 4% and 8%, respectively, of their assets under management in unlisted assets. Eligible funds include European Long-Term Investment Funds (ELTIFs) and venture capital mutual funds (FCPRs).
