Conversion of a euro-denominated life insurance contract into a multi-fund contract without tax consequences ("Fourgous amendment") and diversified contracts

Article 1 of Act No. 2005-842 of 26 July 2005 provides that converting a life insurance or capitalisation contract whose premiums are invested only in euro funds into a contract including unit-linked funds "does not entail the tax consequences of a termination": the contract keeps its tax seniority. Income credited at the date of conversion is treated as premiums for social levies already paid. The same article creates "diversified" contracts (Article L. 142-1 of the Insurance Code), taxed like unit-linked contracts.