Dec 20, 2023

Italy may extend suspension of early redemptions of insurer Eurovita's products

ROME, June 8 (Reuters) - Italian authorities may extend a temporary suspension of early redemption of ailing life insurer Eurovita's products beyond the June 30 expiry, a consumer association said on Thursday after a meeting with the company's special administrator.

Authorities and financial firms are negotiating plans to rescue Eurovita by dividing up the troubled life insurer among leading players in the industry.

As a deal remains elusive, an extension of the temporary halt to the early redemption of Eurovita's products is being considered, the ADOC consumer group said in a statement.

Eurovita, owned by Britain's Cinven, is the first insurance company in Italy to be placed under special administration.

The rescue deal under discussion envisages that top insurers Generali (GASI.MI), UnipolSAI (US.MI), Intesa Sanpaolo (ISP.MI), Allianz (ALVG.DE) and Poste Italiane (PST.MI) each take on a portion of Eurovita's assets.

Insurers want banks that distributed Eurovita products to provide the financing for any early redemptions by customers, people briefed about the matter told Reuters, adding parties are at odds over the cost of such financing.

"There are still some sticking points on the potential, identified solutions which would see the protection of savers as their main element," ADOC said without providing details.

ADOC released its statement after it and other consumer groups met on Wednesday with Eurovita's special administrator Alessandro Santoliquido.

Eurovita ran into trouble when higher interest rates reduced the value of its government bond holdings and also prompted customers to redeem their insurance policies early to reinvest the money into higher-yielding products.

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