The Best Life Insurance Policy Ever . . . Unless Your Name is Aviva

Have you ever fantasized about having a crystal ball to guide your investment picks?

Your fantasy is coming true for Max-Hervé George, a 25-year-old French citizen who is the insured on a policy taken out almost two decades ago. His father bought a policy for Max when he was 7 years old that allows the policy owner to invest the cash value while essentially knowing the outcome. While the exact amount of the policy’s value is in dispute, one report I saw placed the value at $112 million, on an original investment of $9,000. According to, the policy earned an annual return of 68% for the decade from 1997 to 2007, and if that rate of return were to continue into the future, Mr. George would be a billionaire by his 30th birthday and a trillionaire before turning 45.

How could this happen?  The policy, called a Fixed Price Arbitrage Life Insurance Contract, issued by French insurer L’Abeille Vie, was similar to a Variable Life policy with mutual fund-like separate accounts, with one gigantic twist. According to, “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.”

You need to remember that this was a different, pre-Internet time, when as pointed out in the article, making trades meant “calling your broker, visiting him in person, or maybe sending a fax. It could take days for the trade to be processed, during which time the market could move again.” Certainly, these types of policies were not issued by forward-thinking firms, but once they realized their problem, they reached out to clients and paid them to give up the right to trade with a crystal ball. Amazingly, many did. But not Max-Hervé George.

The company that issued the policy in question, L’Abeille Vie, was absorbed by Commercial Union and eventually merged into Aviva in 2002 and now this is Aviva’s problem.

The case is being fought in the courts where these things usually land. Max won the first round, with the courts opining that the contracts were, in fact, valid. A follow up ruling seems to have also gone his way, but Aviva has issued the statement that “Aviva France strongly contests this compensation claim and believes that the Court will rule against the speculative and excessive compensation levels being sought.”

Because of the ongoing litigation, the exact amount of Max’s windfall is unknown, but that has not kept him from moving forward. Not only is he still actively trading on the contract’s account, but he is doubling down. Utilizing a contract provision that allows him to add additional cash to the contract, he has taken out loans of approximately $15M in the past year to add to his rapidly growing pot.

Questions remain whether Max will ever gain access to the full pot and what, if Aviva fails in its legal efforts, the effect would be on the carrier. Though the carrier has said it “remains appropriately reserved,” a pot growing at 68% annually means that the carrier’s liability doubles approximately every 15 months. And since Max is only 25 with a life expectancy of greater than 50 years, that is a lot of doubling.

2 thoughts on “The Best Life Insurance Policy Ever . . . Unless Your Name is Aviva

  1. Pingback: Max-Hervé George versus Aviva, a Quick Update | youritm

  2. Pingback: The Year in TOLI – 2015 Edition | ITM|TwentyFirst

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