* Financial watchdog fines CNP 40 mln euros
* CNP fined for insufficient searches for clients’ heirs
* French life insurers must find policymakers heirs
PARIS, Nov 3 (Reuters) - France’s financial sector regulator fined CNP Assurances 40 million euros ($50 million) on Monday for failing to do enough to find the heirs of deceased life insurance policyholders.
Since 2007, life insurers in France have had a legal obligation to try to trace potential beneficiaries of unclaimed policies after a holder’s death whereas before it was up to the heirs to claim the funds.
The ACPR financial watchdog said in a ruling that CNP’s searches for potential beneficiaries had been “highly insufficient” and that the company had been unable to specify how much it had provisioned for unclaimed policies.
Reacting to the decision, CNP said it had never considered excluding potential beneficiaries and always intended to pay all unclaimed policies.
“CNP Assurances would also like to reiterate that it has never derived any profit from these unclaimed settlements,” it said in a statement, adding that income earned on unclaimed funds had been added to the sum used to pay all policyholders.
CNP said it had a team of 60 people trying to find heirs of policyholders who died before 2007, which it hoped would clear the backlog of unsettled claims by the end of 2015.
Life insurance is a highly popular savings vehicle in France thanks to the tax breaks it offers. The market is dominated by CNP and insurance giant AXA, along with banking groups such as BNP Paribas and Credit Agricole.
France’s largest life insurer with a 17 percent market share, CNP is 41 percent owned by state-backed lender Caisse des Depots and 36 percent jointly by state-bank Banque Postale and the BPCE banking group. The state owns a direct one-percent stake in CNP.
The Cour des Comptes public audit office said in a report last year that life insurers have been very slow living up to their obligations to find heirs since the 2007 law was enacted.
The auditor estimated that unclaimed life policies were worth at least 2.76 billion euros. If a policy is still unclaimed 30 years after the holder’s death, the funds revert to the state under French law.
1 US dollar = 0.8004 euro Reporting by Leigh Thomas; Editing by Brian Love and Louise Heavens