Max-Hervé George versus Aviva, a Quick Update

Recently, ITM posted a blog entitled, The Best Life Insurance Policy Ever . . . Unless Your Name is Aviva, which recounted the good fortune of Max-Hervé George, whose father had purchased a life insurance policy for him when he was a child. The policy guidelines effectively enabled a policy owner to manage the cash value in the policy by essentially backdating his investment decisions. The “crystal ball” policy was issued two decades ago by a company now owned by Aviva. Unfortunately, for Aviva, some believe that the policy’s value could surpass a billion dollars by 2020. From 1997 to 2007, the policy had a projected annual rate of return of 68 percent. If this is an indication of future returns, the Rule of 72 tells us the policy value will double again in just over a year.  And on and on……

*** Update ***  As I noted in the previous blog, Max won a round of litigation against the carrier. According to a press release I received on the case last week, this was based on a ruling by the French High Court, which ruled that Max had the “right to operate his . . . contract on its original terms and make effective, back dated fund switches.” In my earlier blog I mentioned that Mr. George is not only managing his contract, he is using a contract provision to add to the contract by borrowing money from European banks.

When I initially read about this case, I wondered how many of these policies were out there. Clearly, a life insurance policy that could double in value every year or so would be considered a liability for any financial institution. According to the press release I received, dated April 2, it appears the exact number is unknown, or at least Aviva is not letting on what that number is. At a general meeting held recently, “Aviva refused the request for greater transparency and (to) answer simple questions such as how many contracts are still in existence.”

One thing we do know—according to the press release, Nicolas Lecoq-Vallon, the French lawyer who already represents 30 clients with this type of policy, signed up 10 new clients in just the last two weeks.

With the number of policyholders seeking counsel growing, and the almost unlimited cash value potential, this is surely a case that is not going away. More updates to follow.