Fourgous amendment (conversion of a single-fund contract)
A 2005 provision that allows a euro-only life insurance policy to be converted into a multi-fund policy with the same insurer, without losing its tax seniority, provided part is invested in unit-linked funds.
The Fourgous amendment, named after deputy Jean-Michel Fourgous, was introduced in the Breton Act of July 26, 2005 to steer French savings toward equities. Before it, substantially changing a life insurance policy risked being treated as a novation, that is, a closure followed by a new subscription, costing the saver the tax date on which their allowances depend. The provision allows all or part of a single euro-fund policy to be transferred into a multi-fund policy with the same insurer without novation, provided a minimum share is invested in unit-linked funds. The saver thus keeps the tax seniority of the original policy, often valuable for policies opened before 1998. For the insurer, it is a tool to shift its liabilities toward products that consume less capital, since the financial risk of unit-linked funds is borne by the policyholder.
Since the Breton Act of July 26, 2005, a saver whose euro contract was opened in 1995 can convert it into a multi-fund contract by placing at least 20% in unit-linked funds, without losing the tax advantages attached to premiums paid before October 13, 1998.
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