Insolvency of Forward You Life Insurance reported by Luxembourg Insurance Regulator
The Luxembourg Insurance Regulator (CAA) has reported the insolvency of the German insurer Forward You Life Insurance (FWU) operating in Spain, among other countries. The regulator indicates that the insurer declared itself insolvent by stating that it “no longer met the mandatory minimum capital requirement (MCR) or the mandatory solvency capital requirement (SCR).”
Financial Plan Required to Restore Funds
At the same time, the insurer’s sole shareholder requested insolvency proceedings in a Munich court due to over-indebtedness. The CAA has frozen its assets to protect policyholders and beneficiaries, requiring the insurer to submit a “realistic financing plan to restore, within three months, the eligible basic own funds, at least to the level of the mandatory minimum capital.” It adds that if this plan fails, the regulator could revoke the license and temporarily prohibits the payment of any contractual benefits.
Impact of FWU AG Insolvency on Policyholders
In response to these events, Eiopa has published an extensive article on its website to inform its policyholders of the situation. The German holding FWU AG declared insolvency on July 19 due to over-indebtedness, affecting policyholders in Germany, Austria, Belgium, Spain, France, Italy, and Luxembourg. Eiopa assures customers that supervisors in each of these countries will act in the best interests of policyholders and have already taken measures such as freezing assets and suspending new business subscriptions to address the situation.
However, Eiopa clarifies that the situation of policyholders depends on various factors, including the company’s financial situation (currently under review), the terms of their insurance contract, and the specific provisions of contract and insolvency legislation, which may vary from one Member State to another. Eiopa recommends that policyholders carefully read the terms of their contracts, seek professional advice, and consult their country’s supervisor, in this case, the DGSFP. Eiopa will continue to update information on its website.
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