With a view to the implementation of Directive 2004/113/EC of 13 December 2004 on the implementation of the principle of equal treatment of women and men, Article L. 111-7, I of the Insurance Act prohibits in principle any direct or indirect discrimination based on gender , both for calculating premiums and for benefits. Nevertheless, the legislator had granted an exception for insurance contracts entered into under the conditions of article L. 911-1 of the insurance law (C. ass., art. L. 111-7, III), i.e. collective labor contracts. Since the decree of August 1, 2006, applying Article A. 132-18 of the Insurance Act, premiums and benefits for annuity contracts taken out by employers are thus calculated on the basis of table TGF05 for female policyholders and table TGH05 for male policyholders.
Almost twenty years after the adoption of this directive, article 35 of the law of 23. October 2023 on green industry this exception. This provision comes into force on 24 October for contracts entered into and memberships of group insurance agreements that come into force after that date, as well as for these contracts and subsequent tacitly renewed memberships, i.e. for renewals with effect from 1 January 2025.
Simple mortality table
More specifically affected by this reform are annuities to be liquidated under old defined contribution supplementary pension contracts known as “Article 83” schemes, mandatory pension savings schemes and insurance contracts relating to the defined benefit pension schemes (funded or RVD contracts). of accidental rights schemes falling under article L. 137-11 of the Social Security Code and new acquired rights falling under article L. 137-11 -2 of the Social Security Code).
Until now, annuities from company pension schemes have been calculated on the basis of TGF05 or TGH05 mortality tables, depending on the gender of the insured. Given the lower life expectancy of men, the advantageous use of these tables, for a similar amount of capital input, also allows men to benefit from more advantageous annuity amounts than women. Another practical consequence: the ceiling that allows to benefit from the redemption of the annuity in capital, as long as it is less than €110 per month (A. 160-2 of the Insurance Code), is reached more easily by men, more often deprive the possibility of requesting liquidation in the form of a single capital.
For the application of the reform resulting from the Green Industry Law, the calculation of premiums and benefits under these contracts on the basis of a unisex mortality table should lead to the application of the most “prudent” mortality table, or to date, that of women (C. ass., art. A. 132-18).
However, adaptation to the mortality table for women will lead to a reduction in the amount of old-age pensions for men, without a correlative improvement in the situation of women. In addition, for defined benefit schemes, this is likely to generate an increase in the employer’s obligations, although the employer per 31 December 2023 could reasonably believe it was 100% covered. This increase in exposure is also likely to weigh on the insurer for deferred annuity contracts.
It is in this context that a certain number of players in the market are working to develop a single table based on the applicable mortality tables for men and women for annuity contracts. This table could correspond to a pricing equivalent to 60% of the calculation made on the current table for men and 40% of a calculation made on the basis of the current table for women.
This one table, to be approved by the ACPR, would thus enable the adverse effects of using the female mortality table to settle male annuities to be circumvented.
Compliance
Whichever solution is chosen, the entry into force of Article 35 of the Green Industry Act may not, as such, be sufficient to make the application of a new mortality table enforceable against the subscriber and the policyholders. In fact, if it appears from certain jurisprudence decisions that a regulation change can be enforced taking into account the tacit renewal of the insurance contract (Cass. 1ère civ., 2. Dec. 2003, no. 00-19.561 and Cass. 2. civ., 3. February 2011, no. 10-13,581), insurance companies are still obliged to bring contracts into line with the new legal provisions, As a minimum by informing subscribers and policyholders of changes in contract provisions. Furthermore, in the absence of a single table adopted by regulation, bringing the contract into conformity will inevitably require arbitration by the parties to the contract.
In addition, the need to change the contract in case of amendment must be assessed in relation to its wording. Since any contract clause can be interpreted as allowing the insured to request a calculation of his pension on the basis of a mortality table other than the unisex table to be used, it would be appropriate to amend the insurance contract.
Also in principle and as recently recalled by the Court of Cassation in a judgment of 25 May 2023, “The insurance company and the subscriber may agree on any change to the group contract, the subscriber being responsible for informing the members in writing at least three months before the planned date of its entry into force” (Cass. 2. civ., 25 May 2023, no. 21-15,842; C. ass., art. L. 141-4).
If the consent of each individual member is not required, it will however be necessary to ensure the signing of a change with the subscriber and delivery of a new information notice to the insured at least three months before the effective date of the change. i.e. from next September for contracts renewed from 1 January 2025.
To remember
As an exception, insurance agreements relating to collective wage contracts distinguish between men and women: the premiums and benefits underwritten by the employer are based on a different mortality table for female policyholders and for male policyholders. Men’s lower life expectancy means that men benefit from more favorable annuity amounts than women for a similar part of the capital.
To note
The Green Industry Act will put an end to this distinction on 24 October 2024: the use of a single mortality table is recommended for contracts entered into and membership of group insurance agreements that come into force after that date and those tacitly renewed thereafter, or for effective renewals on January 1, 2025. The calculation of premiums and benefits under these contracts will be based on the female mortality table.
