Bitcoin Now Used to Back Life Insurance Contracts via the Pact Act for Crypto Assets
A new act passed in France on Thursday, to use Bitcoin for insurance savings funds. The new ‘Pact Act’ also affects existing FBCIs according to sources. The question many people are asking is, will this new act have a positive or negative effect on insurance claimers?
I’ll clarify for you; Bitcoin is in the process of being used for insurance contracts. Cryptocurrency is a soon to be used method for using funds to back those insured. From what sources report, the Pact Act passed on Thursday, by popular vote in the National Assembly. Ensuring parties can now include cryptocurrency in their claims, something that has never happened before in France.
Joel Giraud of the LREM MEP and budget rapporteur stated,
“This was not the primary goal of Pact, but insurers will actually be able to offer products based on crypto-assets. They will be able to do so through specialized funds.”
The Pact Act Texts
Two separate parts within the act, made using it possible. It’s taken involved parties for more than 18 months to come to a decision on the new act. The first section making usage of the Pact Act possible was Article 21, an amendment that changed the insurance code to allow specialized funding units in an account, hence Bitcoin being the allowed.
“If the article includes conditions as to the investor's financial situation or experience, which will be precisely specified by decree, there is no longer any limit on the assets in which the SPFs eligible for life insurance can invest. “
The FPS have been further relaxed,” reported Emilien Bernard-Alzias, a lawyer at Simmons & Simmons LLP.
Article 26 of the new Covenant made further amendments to the provisions of the Monetary and Financial Code. The newly amended section was related to digital assets usable for investments by SPFs.
Emilien also said,
“With these two provisions, it is written in black and white that FPS can invest in crypto-active like bitcoin.”
FPCIs or private equity investment funds are also directly affected by the amendment.
A New Future For Bitcoin
No one knows for certain if the ensuring parties will gain anything from the provision. Cryptocurrencies are still struggling to get a mainstream foothold, as it is today. And how the SPF and FPCI will invest in Bitcoin is uncertain at best. But the hopes are that the new move will have a positive impact on the future price of Bitcoin.
“There is obviously an exploratory dimension with this new device. Things are there, for insurers to take it or not, “
stated Emilien Bernard-Alzias. Still, the hopes are that some of the insured will be interested in Bitcoin backed funding. Since Bitcoin is known for its volatile nature, everyone is still interested to see what happens with the new insurance contracts. After all, Bitcoin saw a negative drop of nearly 65% in 2018, only now slightly rebounding in the positive by about 25% so far in 2019.