Student insurers rebrand to cover scandalous past

April 21, 2000

France's biggest student social insurance society, tainted by fraud and corruption and the subject of official investigations for the past two years, has been relaunched with a new name and statutory framework.

Hoping to draw a line under past scandals, the Mutuelle des Etudiants formally took over last week from the Mutuelle Nationale des Etudiants de France after long discussion about new statutes, finance and future services for subscribers.

Taking part in the talks were French mutual insurance federation FNMF, of which MNEF was a member; the main teachers' insurance society, MGEN; representatives of student unions and employees; and two provisional administrators who carried out an inquiry into MNEF.

The inquiry centred on the 15 years when Olivier Spithakis was director-general.

Under his management MNEF - which was historically close to Unef-ID, the student union with links to the Socialist Party - built up a network of subsidiaries that diversified into many different fields including property and finance.

Two years ago, the Cour des Comptes, the equivalent of the United Kingdom's Audit Office, conducted the first of several official investigations into MNEF and its subsidiaries.

It reported practices that conflicted with its non-profit status. Judicial inquiries later examined allegations of corruption, fraud, embezzlement, forgery and receiving stolen goods.

The group was revealed as a hotbed of cronyism, with associated companies awarding lucrative fictitious posts and "consultancies" to Socialist politicians and activists and funding political campaigns.

Spithakis resigned in the summer of 1998 and was imprisoned in late 1999. The then finance minister, Dominique Strauss-Kahn, resigned in November after questions about a fee for legal work he was supposed to have carried out for MNEF. Other Socialists, including members close to prime minister Lionel Jospin, are still being summoned for questioning by examining magistrates.

MNEF has handed on to ME a deficit of between E1.5 and E4.5 million (Pounds 917,000-Pounds 2.3 million) and 677,000 affiliated students - down from 811,000 in 1989.

The temporary board of directors set up during restructuring discussions will serve until elections early next year. New directors are expected to be more grassroots-friendly and locally based, replacing the national system which led to the abuse of power.

Other public service mutual societies will act as guarantors to ensure health cover for ME subscribers. MGEN will play a support role, proposing to set up links and joint programmes with ME at university level to compete against privately run rivals.

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