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Fwu Life in liquidation: 110 Italians with frozen policies and outstanding premiums. What happens now?

With the Luxembourg-based company now in liquidation, life insurance policies are frozen and there's no telling when, or if, customers will ever see their money. Here are the full details

Fwu Life in liquidation: 110 Italians with frozen policies and outstanding premiums. What happens now?

The news that Fwu Life Insurance Lux is officially in liquidation it became a cold shower for about 110 thousand Italians that they had purchased life insurance policies from the Luxembourg company. A real twist that left savers with their hands tied and their frozen investments. But what is going on and what should the customers involved expect?

The Fwu Le Collapse: What Happened

The Fwu Life crisis began in July 2024, when the company began to falter under the weight of problems financial. Founded in 2006, the company had issued unit linked life insurance policies for a value of about 300 million euro, a product that initially seemed advantageous for those looking to combine savings and investment. However, the landscape changed dramatically when the company discontinued the new business and the 2023 budget not certified from the reviewers.

Following these worrying signals, the Luxembourg supervisory authority, the Insurance Commissioner (Caa), intervened, discovering that Fwu Life did not meet solvency requirements necessary to ensure the company's ability to meet its commitments to customers. The recovery plan failed, and the CAA has started the procedure for compulsory liquidation, by filing an application for dissolution with the Luxembourg court.

Compulsory liquidation: what does it mean for insured persons?

La liquidation forced It is the final stage for a company in difficulty. It means that Fwu Life can no longer meet its financial commitments to its policyholders, and therefore a legal process to close the businessThe company's assets will be sold and, if funds are available, distributed among creditors and policyholders.

In the case of Fwu Life, the August 2th, 2024 it was decreed Life insurance policy freeze. This means that customers can no longer redeem their contracts, and are left without certainty about the future of their investment.

Fwu in crisis and the surprising request for back premiums: what happens now?

Italian customers, with around 300 million euros in reserves, are left sitting on their hands, unable to redeem their money.

But the situation became even more complex when, after having frozen the policies, Fwu Life sent letters to Italian customers asking for pay back premiums. A move that has caused a stir: how can customers pay premiums on policies that they cannot even redeem? The company, taking advantage of the reactivation of Sepa payments, has requested the payment of unpaid premiums, inviting savers not to further compromise the policies.

This request triggered the intervention of Confconsumatori, which he urged customers not to pay. Second Antonio Pinto, responsible for the association's financial products, there is a "real risk that these payments will end up in a black hole", that is, that the money will never be returned, given that the company is now unable to fulfill its contractual obligations. Confconsumatori has therefore warned Italian savers that there is no guarantee that the payments will be used to recover investments.

The fact that the company is Luxembourg-based further complicates matters for Italian savers. Despite the vigilance of theIvass, Fwu Life is under Luxembourg jurisdiction, which means that the Italian insurance supervisory authority has no direct powers to intervene in the matter.

Meanwhile, the CAA has confirmed that the reserve freeze and payment suspension will remain in place. until the final verdict. In other words, the 110 thousand Italians involved will have to prepare to face a long wait, with their funds tied up in legal limbo, awaiting possible distribution of the funds, if and when they come.

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