Discretionary Management

Management mode of a life insurance contract in which the policyholder delegates the switching decisions to a mandate holder (the discretionary manager). The mandate holder decides the switches within the limits of an investment strategy that is agreed in advance. The mandate holder does not need a new approval from the policyholder for each switch.

In a life insurance contract, the policyholder does not own the underlying assets. The policyholder has a contractual right to switch between funds, and delegates this right. Thus, the legal term is "switching mandate" ("mandat d'arbitrage" in French). It is not a portfolio management mandate as MiFID II defines it.

There are two types of discretionary management:

• Profiled Managed Portfolio: the policyholder selects a standard investment profile.
• Personalised Discretionary Management: the investment strategy and the limits are adapted to the policyholder.

In the API, the management mode is discretionary-management. A mandate defines the framework of each compartment.

Synonyms:

• Delegated management
• Switching mandate

Note: In French, do not use the term "mandat de gestion" for a life insurance contract. Use "mandat d'arbitrage".