Glossary entry (derived from question below)
French term or phrase:
arbitrage à cours connu
English translation:
so-called cours connu, or known-price, arbitrage contracts
Added to glossary by
Erzsébet Czopyk
Jan 4, 2017 10:50
7 yrs ago
2 viewers *
French term
United Kingdom
Works in: French to English
arbitrage à cours connu
French to English
Law/Patents
Insurance
Someone has taken out a life insurance policy which the insurer is alleged to have unilaterally amended, so the policyholder is writing to various rating agencies asking them to review their rating of the insurer. He informs the agencies that his policy contains a clause entitled 'Mécanismes des supports financiers', which stipulates the following: 'en cas d'arbitrage la valeur retenue de chaque unité de compte est celle du jour précédent la réception de la demande par la compagnie'. He then goes on to say the following: 'Cette disposition me permet d'effectuer des arbitrages quotidiens en connaissant à l'avance le résultat de chaque opération. Il s'agit d'un système d'arbitrage dit "à cours connu"'. I am not too familiar with the process of arbitrage so have done some research and come across terms such as 'fixed rate arbitrage' (only a couple of hits on google) and 'fixed income arbitrage', but this appears to relate to hedge funds, whereas my case refers to life insurance, so any suggestions would be greatly appreciated! Thanks in advance if you're able to shed some light on this for me.
Proposed translations
(English)
| 4 +1 | so-called cours connu, or known-price, arbitrage contracts |
Erzsébet Czopyk
|
Change log
Jan 10, 2017 09:13: Erzsébet Czopyk Created KOG entry
Proposed translations
+1
2 hrs
Erzsébet Czopyk
Hungary
Hungary
Hungary
sworn translator, linguist, DPO
Native in: Hungarian (Variant: Hungary) 
Works in: Russian to Hungarian, Hungarian to Russian, Latvian to Russian, and 10 more.
Related KudoZ points
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8
Selected
so-called cours connu, or known-price, arbitrage contracts
Investor Max-Hervé George, 25, owns a financial contract that may well be the best financial deal in the world: a "magic ticket" that allows the Frenchman to invest as if he knows the future.
George and his family own life-insurance contracts issued in the 1990s. These so-called cours connu, or known-price, arbitrage contracts are unbelievably generous. That's because George can switch his investments based on their closing prices during the previous week. So if one of his investments does badly in any given week, it's not a problem. He can just switch it next week and get last week's prices.
The contracts were originally issued by L'Abeille Vie, a defunct French insurance company that became Aviva in 2002. Since then, Aviva has tried in court to change the terms of the contract. However, both the French High Court and the Supreme Court ruled in favour of George's position last year.
http://uk.businessinsider.com/max-herve-george-magic-ticket-...
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Note added at 2 hrs (2017-01-04 13:22:25 GMT)
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Life insurance is a popular savings product in France, and typically the customer allocates their money among different investment funds offered by the insurer. But this contract was not typical: prices for the funds were published each Friday, and clients were allowed to switch funds at those prices anytime before the next price was published, even if markets moved in the meantime.
L’Abeille Vie called this an arbitrage, but really it was a gift. Is the stock market up this week? Just call your broker to buy it at last week’s price and pocket the difference.
In a world where the price of everything is now a mouse click away, offering a hindsight investment service seems incredible, if not suicidal. Yet thirty years ago prices for funds were published infrequently. Trading involved calling your broker, visiting him person, or maybe sending a fax. It could take days for the trade to be processed, during which time the market could move again.
L’Abeille Vie was not alone in the madness. Other insurers, including Axa and a group now owned by Allianz, also offered “known price” contracts to rich customers.
So he is now in a strange position. Each week he grows his fortune by trading the past with precision
https://ftalphaville.ft.com/2015/02/27/2120422/meet-the-man-...
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Note added at 2 hrs (2017-01-04 13:24:39 GMT)
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Aviva's French subsidiary fail to acknowledge Cours Connu
http://www.actuarialpost.co.uk/article/aviva----039s-french-...
According to documents filed in France this week, Aviva, the international insurance group which faces substantial legal and financial problems from French Cours Connu, or ‘known price’ arbitrage life assurance contracts, has failed to acknowledge in its 2014 results that is has suffered from serious court rulings against the company. These have already cost the French subsidiary many tens of millions of euros.
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Note added at 2 hrs (2017-01-04 13:25:07 GMT)
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Cours Connu, or ‘known price’ arbitrage life assurance contracts
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Note added at 5 days (2017-01-10 09:13:59 GMT) Post-grading
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Thank you very much, Sarah.
George and his family own life-insurance contracts issued in the 1990s. These so-called cours connu, or known-price, arbitrage contracts are unbelievably generous. That's because George can switch his investments based on their closing prices during the previous week. So if one of his investments does badly in any given week, it's not a problem. He can just switch it next week and get last week's prices.
The contracts were originally issued by L'Abeille Vie, a defunct French insurance company that became Aviva in 2002. Since then, Aviva has tried in court to change the terms of the contract. However, both the French High Court and the Supreme Court ruled in favour of George's position last year.
http://uk.businessinsider.com/max-herve-george-magic-ticket-...
--------------------------------------------------
Note added at 2 hrs (2017-01-04 13:22:25 GMT)
--------------------------------------------------
Life insurance is a popular savings product in France, and typically the customer allocates their money among different investment funds offered by the insurer. But this contract was not typical: prices for the funds were published each Friday, and clients were allowed to switch funds at those prices anytime before the next price was published, even if markets moved in the meantime.
L’Abeille Vie called this an arbitrage, but really it was a gift. Is the stock market up this week? Just call your broker to buy it at last week’s price and pocket the difference.
In a world where the price of everything is now a mouse click away, offering a hindsight investment service seems incredible, if not suicidal. Yet thirty years ago prices for funds were published infrequently. Trading involved calling your broker, visiting him person, or maybe sending a fax. It could take days for the trade to be processed, during which time the market could move again.
L’Abeille Vie was not alone in the madness. Other insurers, including Axa and a group now owned by Allianz, also offered “known price” contracts to rich customers.
So he is now in a strange position. Each week he grows his fortune by trading the past with precision
https://ftalphaville.ft.com/2015/02/27/2120422/meet-the-man-...
--------------------------------------------------
Note added at 2 hrs (2017-01-04 13:24:39 GMT)
--------------------------------------------------
Aviva's French subsidiary fail to acknowledge Cours Connu
http://www.actuarialpost.co.uk/article/aviva----039s-french-...
According to documents filed in France this week, Aviva, the international insurance group which faces substantial legal and financial problems from French Cours Connu, or ‘known price’ arbitrage life assurance contracts, has failed to acknowledge in its 2014 results that is has suffered from serious court rulings against the company. These have already cost the French subsidiary many tens of millions of euros.
--------------------------------------------------
Note added at 2 hrs (2017-01-04 13:25:07 GMT)
--------------------------------------------------
Cours Connu, or ‘known price’ arbitrage life assurance contracts
--------------------------------------------------
Note added at 5 days (2017-01-10 09:13:59 GMT) Post-grading
--------------------------------------------------
Thank you very much, Sarah.
Peer comment(s):
| agree |
philgoddard
: It looks like the case in your references is the one the asker's text refers to.
2 hrs
|
|
Thank you very much!
|
4 KudoZ points awarded for this answer.
Comment: "Thanks very much for this and for your detailed reply."
Discussion