The Austrian Financial Market Authority (FMA) today sent out for review a package of amended regulations on the funding of provisions for additional interest by insurance undertakings. The additional interest provision must be established pursuant to the Maximum Interest Rate Regulation (Höchstzinssatzverordnung) and must consistently enable insurance undertakings to meet their legal obligations and contractual guarantees. If, for example due to an environment of continued low interest rates, the current or expected income from financial investments is not sufficient to pay the interest guaranteed during periods of high interest rates, this additional provision must be established in due time.
With this package of amended regulations, the FMA has now specified in detail the legal basis:
- An amendment to the Maximum Interest Rate Regulation lays down the method for calculating the amount to be held in the additional interest provision.
- An amendment to the Profit-sharing Regulation (GBVVU; Gewinnbeteiligungs-Verordnung) prescribes that the additional interest provision must not be allocated at the expense of the insured but must be fully funded by the insurance undertakings themselves.
- An amendment to the Actuary’s Report Regulation (AktuberVO; Aktuarsberichtsverordnung) obliges actuaries to verify and confirm that the provision has been properly established.
The amendments to these regulations are planned to be applied from the 2013 financial year onwards. “At the moment, insurance companies can easily meet their guarantee obligations,” the FMA’s Executive Directors Helmut Ettl and Klaus Kumpfmüller noted, adding, “We want to ensure, for the benefit of the insured, that this will also be the case in future even if the low interest environment continues.”
The draft regulations on the additional interest provision can be viewed (in German) on the FMA website at: https://www.fma.gv.at/en/national/fma-regulations/
Rückfragehinweis für Journalisten:
Klaus Grubelnik (FMA-Mediensprecher)
+43/(0)1/24959-6006
+43/(0)676/88 249 516