OneLife partners the 20th edition of the Colloque Fidroit in Paris

OneLife sponsored the Colloque Fidroit in Paris on 27 June.

With over 700 participants at this year’s event, the diverse program took a deeper look into the changing face of wealth management and advice. Analysis, trends, insight and solutions from leading industry experts … OneLife was pleased to be associated with this event dedicated to the future of wealth and the strategies for its management, protection and transmission to the next generation.

As a specialist life assurance company, OneLife develops sophisticated cross-border wealth planning solutions to safeguard and transmit wealth on behalf of its partners and clients using Luxembourg life assurance solutions.

OneLife’s stand was visited by many of its partners and was the opportunity for our French market experts to meet and exchange on topics related to wealth management and preservation and the benefits luxembourg life assurance can bring.

Bastien Perrine, OneLife Regional Sales Director, interviewed by BFM focussed on the need to provide solutions, not just product:

“Today, we see that our clients want to know especially what OneLife can offer to help manage their own cross-border lifestyles as they and their families become increasingly mobile. Life assurance offers robust solutions to help manage these complex situations, protecting and transmitting wealth in an effective way”.

See the full interview, click here.

Rendez-vous for the 21^st edition of the Colloque Fidroit in 2018!

Pitch Time !

The HR Department, under the leadership of Nicolas Palau, also put its staff to the test: their teamwork task was to represent the different experiences of the day in a diagram, and then present not only the experiences they most enjoyed but, above all, the impact of the digital transformation on the activities of life-assurance company. The exercise concluded with ten teams successively defining the next challenges for OneLife before a jury empanelling the members of the Executive Committee (Marc Stevens, Laurence Parison, Wim Dieryck, Eric Lippert, Cédric Lootvoet, Antonio Corpas), with 2 minutes’ pitch time each. Contributors highlighted the importance of communication and information, the arrival of the electronic signature or the value added by applications and virtual reality. However, the members of the jury were swayed by the human aspect and customer orientation argued by Nathalie Calabrese’s team.

Digital technology to improve the experience of and service to clients, partners and staff

The day after the victory, their testimony was given by the members of the team picked as the winner of the pitch session arguing the impact of digital technology on OneLife’s activities, and projecting the future challenges. The winning team was composed of Nathalie Calabrese, Anna Bertini, Liana Aghabekyan, Steven Cooney, Judith Hooker, Valérie Harm, Pierre Derupty, Melissa Fety, Philippe Polydore and Michael Hodges.

“In the case of OneLife, the chief benefit of digital will be enabling us to meet clients’ requests more quickly – and even virtually instantaneously – and efficiently. Our life-assurance company is clearly customer-oriented,” began Nathalie Calabrese. Doubtless, these Digital Days were designed to introduce all the staff at OneLife to the new digital practices and trends, yet we have already come a long way. As recalled by Liana Aghabekyan, the insurer is currently engaged in incorporating digital-signature technology, and is collaborating with the Luxembourg RegTech KYCTech, in close coordination with the Compliance & Risk Department, to facilitate the registration process for policyholders. “Last year, we also launched a mobile application. And for 25 years, we have been using Yoya,” she remarked, pointing to OneLife’s long-standing determination to feature among the pioneers of innovation in the Grand Duchy of Luxembourg.

Nathalie Calabrese also stressed the importance of the human aspect, the argument which had won over the members of the jury: “These technologies greatly increase the opportunities for interaction and communication with our partners and clients, but also internally with our colleagues. They embody genuine value added and make life easier for staff. However, a human vision is necessary for integrating them and for their optimum use”. Humans and technologies complement each other, as pointed out by Liana Aghabekyan. “These tools give us new options for interaction and exchanges,” endorsed Steven Cooney. Philippe Polydore emphasised, for his part, that these technologies in process of integration will increase process reliability at OneLife, while also highlighting the “paperless” aspect of the electronic signature.

All members of the team brought together on the occasion of these Digital Days agreed on the fast paced at which businesses are transforming, hence the need not to miss the digitalisation train. “These two days have imparted a healthy momentum and have given us a practical view of the potential for harnessing these technologies to OneLife’s business,” was the team’s unanimous verdict.

Reforms to UK RND status put on hold by UK Government until after the election

UK Chancellor announced on 25 April that a series of ‘significant clauses’ from the Finance Bill are on hold.

In the run up to the 8 June election, the UK Chancellor has announced a delay to reforms expected in the Finance Bill (no 2) 2017. These include the implementation of a maximum period of time a non-domiciled individual can be UK resident before being deemed UK domiciled for all tax purposes. While the reforms are largely expected in a third Finance Bill after the general election, this announcement means further uncertainty for residents non-domiciled, and they may now need to carefully consider their wealth planning strategy.

>>> Facing up to the challenges of Brexit, hard or soft.

Compliance & Risk, key to the life insurance digital revolution

Against a backcloth of growing digitalisation and increasingly tough regulations in the financial sector, a few pioneering companies are already surfing on the RegTech wave. Similar to FinTechs, InsurTechs or FundTech, these technologies are currently revolutionising the compliance & risk processes, with the ultimate aim of contributing new added value to companies onboarding the RegTech train. This is true of OneLife, a Luxembourg life insurance company and of the Luxembourg startup KYCTech. We met with Marc Stevens, CEO of OneLife, Thierry André and Luc Maquil, co-founders of KYCTech, to review a collaboration rich in innovation.

“This integration of RegTech is part of the digitalisation process that we started almost two years ago now” comments Marc Stevens, before going on to say: “For the time being we have chosen to focus on two very specific axes regarding RegTech: the integration of KYC/AML filtering for new business and the KYC/AML check for legal entities”. The CSSF and CAA’s latest regulations also impose new mandatory checks when accepting clients. RegTech has become a virtual necessity for digital pioneers such as the Luxembourg life insurer. The OneLife and KYCTech teams agree in saying that this partnership was completely natural, given that the Luxembourg startup positions itself as a facilitator enabling the regulations to be simplified by adopting its technologies to better meets its requirements. “Digitalised compliance & risk now clearly contributes to the business and its added value is undeniable” stresses Thierry André.

“Digitalised compliance & risk now clearly contributes to the business and its added value is undeniable”

A unique collaboration

Numerous exchanges and working meetings initiated at the end of 2016 have enabled the Compliance & Risk, Commercial, IT & Digital and Customer Service teams to be integrated from the start of the process. “We thus opted for a genuine partnership, in an “agile mode” by composing a working party including staff representing every department and stakeholder in order to ensure the project’s success” explains Luc Maquil. Marc Stevens underlined, for his part, the importance of the workshops which were chaired by KYCTech and which enabled a medium-term vision to be given and, above all, current practices to be challenged with the aim of optimising the processes, their digitalisation but also the creation of added value. “Such solutions aim to free up significant time for the Compliance & Risk teams, but also Customer Service, not to mention the speed of reaction and service that this engenders” the CEO of OneLife stresses.

RegTech, a genuine facilitator

“API analyses the data and gives a signal – green, amber or orange – before redirecting, if necessary, to the compliance department or requesting further details” Thierry André and Luc Maquil explain. This process thus enables a report to be generated before integrating it into the customer file, in 10 seconds. An employee may spend considerable time checking this information which is crucial to establish new life insurance policies. This manual task can be automated and free up time for a more detailed focus on the real AML/KYC issues. In addition to the rolling out of a Proof of Concept in the months of April and May 2017, it’s an entire integration programme which has been set out and approved for delivery followed by integration in mid-September. “Perfect timing in line with the finalisation of several other projects around the terminal phase of our digitalisation process” adds Marc Stevens. At OneLife, the arrival of these numerous projects and new digital tools clearly aims to enhance our staff’s skills to improve the added value and thus better meet our partners’ and clients’ requirements.

With such solutions OneLife is equipped to face the increase in the level of regulation and reinforce the tailor-made side of its business, marking it out from its competitors. Furthermore, with this rapprochement the two Luxembourg payers are proving that the RegTech dynamic is well under way in the Grand Duchy and that the country is once again at the cutting edge of the digital world, as was wished for by the government and its Digital Lëtzebuerg initiative.

OneLife and KYCTech will present, inter alia, the advances made in this project at “ICT Spring” to be held on 9 and 10 May of this year, before announcing new innovations in an insurance sector far removed from the traditional label all too often still pinned on it.

Find out more about the stages of OneLife’s digitalisation:

>>> OneLife activates its digital transformation on basis of new app developed with Ainos

>>> OneLife & Talkwalker: Using Social Media Intelligence At Its Best

>>> OneLife’s ambition? To make digital a business enabler.

Article of Alexandre Kielmann, initially published on 2017/04/21 – Beast Magazine

Coming shortly!

OneLife will soon be ready to launch its capitalisation contract product designed for Finnish legal entities. Due to the impact of Finland’s inheritance tax rules, capitalisation contracts are generally recommended only to legal entities, while life assurance products, such as Wealth Finland, are recommended to private individuals.

Capitalisation Finland complies with Finnish law while benefiting from the advantages offered by Luxembourg regarding flexibility and protection. It is a unit-linked capitalisation contract that enables underlying investments in multiple asset classes including both listed and unlisted equities and bonds. The new product permits open architecture involving multiple custodian banks and asset managers as well as self-management. However, the policyholder should not be involved in the management or business activities of the underlying investments. The policy can be pledged and its ownership transferred to a new policyholder accepted by OneLife. Premiums may be paid in cash or in kind by transferring an existing investment portfolio into the policy.

Capitalisation Finland enables legal entities to consolidate investments and postpone taxation of income from investment activities. The product may also be used in Management Incentive Schemes (MIPs). It enables passive investment in both listed and non-listed assets, for example equities, bonds and different types of funds as long as the assets are freely transferable and other legal and internal requirements are fulfilled.

The tax treatment of capitalisation contracts has been clarified in Finland thanks to written guidance from the tax authorities. There are also multiple new tax and court rulings that can make investments through Luxembourg-based assurance products attractive, for instance to private equity and real estate funds operating in the form of limited partnerships. Moreover, according to a recent decision by the Supreme Administrative Court of Finland, it is possible to obtain dividend withholding tax relief on Finnish-sourced dividends paid to the Capitalisation Finland policy.

Legal update – Changes in Finnish inheritance and gift taxation

On 1 January 2017, Finland’s inheritance and gift tax legislation was amended, involving the following main changes concerning life assurance policies:

The inheritance and gift tax rates have been lowered (for the first category of heirs/beneficiaries the top inheritance tax rate was reduced from 20% to 19% and the gift tax rate from 20% to 17%).
The standard spousal allowance was increased from €60,000 to €90,000 and the standard allowance for minor children was increased from €40,000 to €60,000.
The €35,000 tax-exempt allowance on death benefits to close relatives is abolished with effect from 1 January 2018.
The 50% tax-exempt allowance for widows on death benefits is abolished with effect from 1 January 2018.

On its own, the impending abolition of the €35,000 tax-exempt allowance for close relatives will increase the tax impact for beneficiaries. However, the overall reduction in inheritance tax rates may in many cases compensate for this and even result in a lower tax burden for beneficiaries.

The abolition of the widows’ 50% tax-exempt allowance will affect policies where spouses are named beneficiaries. For these policies in particular, it is recommended to review with a local advisor whether the existing beneficiary nominations are still viable. Please note that the existing beneficiary nomination can be changed through a written request signed by the policyholder, although changing irrevocable beneficiary nominations also requires the consent of the irrevocable beneficiary.

When millenials tip their hats to Life Assurance.

Did you know that 66% of HNWs under 35 have a life assurance contract?

Amongst the 604 HNWIs we spoke to in our most recent study ‘The Many Hats of the Modern Wealth Manager’, more than half hold investments in life assurance. These respondents pinpointed this investment vehicle as particularly pertinent when considering wealth transfer strategies.

Most interestingly however, it is the millennial generation who have most readily caught on to the myriad of benefits life assurance can offer – with 66% of respondents under the age of 35 stating they have contracts to hang their hat on.

With its ability to span borders, life assurance enables its users to benefit from tax optimisation, wealth planning and inheritance planning.

Discover more about HNWs’ expectations of their wealth management relationships. Download ‘The Many Hats of the Modern Wealth Manager’ report.

Belgium : new regulation in the Flemish Region (VLABEL)

Since 1 January 2015 and the transfer to VLABEL of fiscal powers regarding inheritance tax and part of the registration fees, intermediaries and insurance companies, lawyers and financial planners, and of course Flemish citizens seeking to structure their assets, have acted in line with decisions published by the Flemish tax authorities. While these opinions were able to clarify the position of the Flemish tax authorities on the matters in question, the points of view taken by VLABEL were surprising to say the least and have caused turmoil in the sector, going so far as to freeze certain solutions currently used and thus far accepted by the federal administration. Although VLABEL has published its new general code which consolidates the inheritance tax and registration codes, no amendments have been made to the law which could justify these contradictory views. In March 2016, Assuralia also entered the fray, lodging a complaint with the Council of State against the Flemish tax authority. Thus, the political world could no longer ignore this issue.

Shortly before Christmas 2016, a new decree was issued. Published on 30 December, its application as of 1 January 2017 has, on the whole, put a smile on people’s faces and enabled the new year to begin on a more optimistic footing. Two issues relating to insurance policies were on VLABEL’s radar and were therefore reviewed.

Donating an insurance policy by assigning all rights

VLABEL’s decision to tax the donation of insurance despite the payment of donation fees generated hostility in November 2015. Several amendments to the original position were published without enabling the assignee/recipient to prevent the benefits that were paid to them upon the termination of the policy being subject to inheritance tax. The decree of 23 December 2016 put an end to this practice by subjecting only the gains on a policy to inheritance tax. Gains should be understood to mean the difference between the value of the insurance policy at the time of donation and the value of the policy upon termination by the death of the donor. The arrival of this new decree therefore reduced the applicable taxation for citizens in comparison with the point of view of the Flemish administration. We must not overlook the fact that the Flemish taxation is not in line with the legal principles underlying insurance policy donation. Consistency between the legal and taxation arguments is, however, well established in other regions of the country.

Joint applications

VLABEL’s position with regard to policies taken out jointly by two policyholders, equally insured, which terminate upon the second death, has generated huge controversy which has still not eased due to cases that remain unresolved to date.

The decision intended to tax beneficiaries under the inheritance tax regime when the latter had not received any benefits and were not even certain to receive benefits at some point in future (as a reminder, the policyholder has the right to revoke the beneficiary clause at any time, provided that the beneficiary has not accepted the benefit. Pursuant to an increase clause between the policyholder in the aforementioned policy structure, this right of revocation returns to the surviving policyholder following the death of the first).

According to the decree now in force, the taxation shall come into effect upon payment of a benefit which may arise from the surrender or termination of the policy. In other words, the partial or total surrender of the policy by the surviving policyholder will generate inheritance tax, which can only occur by means of an additional succession declaration. The collection of inheritance tax upon the termination of the policy by the beneficiary remains unchanged.

This decree is not a panacea, nor a miracle cure for the much criticised decisions made by VLABEL during the last two years. While it is a relief for the recipient/assignees of existing policies, and the beneficiaries of policies taken out jointly, it offers no solution for policyholders whose aim was to optimise the fiscal impact of transferring assets between themselves. It also puts a stop to any discussion regarding policyholders married under a shared property regime. The decree raises other issues that we have chosen not to address in this article and which must, of course, be taken into consideration in finding a solution for asset structuring. We recommend that our clients contact their advisor before making any decisions on the matter and we are available to provide any information they may require.

An analysis of the varying legal positions across Europe

What happens to the rights of policyholders in cases where their death does not lead to termination of the contract?

In a life insurance policy, the policyholder and the insured can be different people. While this configuration may seem strange and even unheard of in certain jurisdictions, the structure is indeed theoretically possible and can be effective when it comes to estate services.

The early death of the insured raises no disputes. However, there is a very different discussion if the policyholder should die first. What becomes of the rights held by the policyholder, and who will be able to exercise them in future? Who will go on to manage the policy, implement surrenders or even amend the beneficiary clause?

Reflecting on the cross-border structure, we have carried out a study of our key markets.

Belgium and the Grand Duchy of Luxembourg have adopted an identical but very complex position. If the policyholder’s rights are not extinguished upon their death, the policyholder’s successors in interests will not inherit the right to revoke the beneficiary clause, the basis of the policy tied to the policyholder. Consequently, exercising other rights cannot undermine a third party stipulation sought by the deceased policyholder. This means that the action taken by the successors in interests is limited to managing the policy, that they are unable to dispose of the policy in any way until its termination. On the other hand, the policyholder has the option to make provisions for all or part of their rights to be transferred, upon their death, to a person of their choice who will be able to exercise all the assigned rights in future. Note that in Luxembourg this assignment is subject to authorisation by the insured.

In France, the legal process is uncertain, as there are no explicit legal provisions. There are two contradictory sets of legal theory. One considers the rights to the policy to be personal and non-transferrable. Consequently, when the applicant dies before the insured, the rights of the applicant die with them and the policy is blocked until the death of the insured. Others consider the applicant’s receivables as ordinary receivables that can be transferred to their heirs as part of their estate like any other estate assets. With no clear position on the subject, the application is made principally, or exclusively, for the lifetime of the applicant(s).

In Portugal, the status of the policy is somewhere between what applies in France on the one hand, and in Belgium and the Grand Duchy of Luxembourg on the other. The rights of the deceased policyholder are not transferred to their heirs and the policy is frozen, unless provisions for a post-mortem assignment were made by the policyholder.

Finland, Denmark and Sweden opted, in this configuration, for a transfer of rights to the beneficiaries who then become the new policyholders.

In the United Kingdom, it is the policyholder’s heirs who inherit the rights in the event of the policyholder’s early death, and who become the new policyholders. However, it is not possible to appoint an assignee in the event of death.

This study shows that the civil consequences of the same structure can be completely different from one jurisdiction to the next. Not to mention the fiscal impact that could affect policyholders’ heirs, assignees and beneficiaries, sometimes through no fault of their own, in such a situation.

Our aim is once again to focus on fully understanding how an insurance policy works before seeking any solution. While a policy can be adapted to bring it in line with another jurisdiction, amending a policy that was badly structured in the first place may prove to be mission impossible. The policyholder then has no choice but to surrender the policy and bear the financial consequences of this surrender.

Bastien Perrine speaking at Gestion de Fortune’s Round Table

Bastien Perrine, OneLife’s Regional Sales Director for the French market, was interviewed by Gestion de Fortune for their special Round Table dedicated to “The new opportunities of the Luxembourgish Life Insurance”.

The following topics were discussed: French Sapin 2 legislation, client profile, advantages for expats or non-residents, Brexit, protection of assets, Specialised Insurance Fund, private equity and digitalisation.

In addition to Bastien Perrine, other experts included Sabrina Riviere (La Mondiale Europartner) and Jean-Baptiste Pleynet (Périclès Group).

The different views from the Round Table are available in a special leaflet that was enclosed in the March edition of their Monthly newspaper and also sent via their Newsletter (+- 50 000 subscribers).

Interested ? Have a look at the digital French version by clicking here.

OneLife – IT Team of the Year

On December 1st, Eric Lippert and his team were rewarded for their projects and best practices as they have been named ICT Team of the Year. Our team met with the CIO of OneLife to discuss the main challenges he faced in 2016, his team’s main achievements and the top priorities for 2017.

Eric Lippert, CIO, Jean-Philippe Quin, IT Operations Department Manager, Christophe Risse, IT Development Department Manager, Marc Leoka, IT Achitect, receiving their trophy. © Dominique Gaul

Two main challenges

The first main challenge was to simultaneously lead the rationalization of our legacy systems and the development of innovative digital solutions. On the one hand our highly efficient project portfolio management ensured we could build solid foundations in terms of IT infrastructure. On the other hand, we worked in small groups with agile methods on digital initiatives to both quickly identify opportunities and take decisions, and eventually create added value.

The second main challenge was more the management linked to all the changes in the way of working that the new IT/digital environment was bringing to our different users. We overcome this by involving the end-users quickly in the process. We first organized digital awareness workshops to make people understand the “why”. We then involved the users in our agile working groups in order to get their buy-in for the transformation. We finally together designed the new working processes in order to be ready at each stage of our digital transformation.

The IT Team main achievements:

On the software architecture side, the setup of a new SOA architecture.

On the regulatory side, the finalization of IT tools to help our financial department to produce the Solvency II reporting.

On the operation side, first the new policy administration platform with which we succeeded in developing 11 new life assurance products for our markets. This is a significant achievement as we did this in less than 9 months when the average time to automate one new product in the IT system used to be 2 years in the past. Secondly the setup of a new workflow system linked to a new document management system. All our policy transaction processes are now harmonized and orchestrated by these new tools with a substantial gain of efficiency and data quality for our Client Service Team.

On the sales side, the setup of a new CRM with additional online marketing and prospecting tools. This entirely moved our Marketing and Sales teams into the digital age.

The “cherry on the cake” is the mobile app that we launched at the InsurTech Summit in October and deployed in November for our partners.

Read more :

LUXEMBOURG ICT AWARDS 2016: AND THE WINNERS ARE… >>> Here.

ERIC LIPPERT: “DEVELOPING AND OFFERING NEW SERVICES TO OUR PARTNERS” >>> Here.