Regulatory Alerts2020-10-07
FMA Circular on Assumed Interest Rate in Health Insurance
The Financial Market Authority mandates that insurance undertakings calculate reserves for increasing age in health insurance using a maximum assumed interest rate of 0.5% starting from 1 July 2021. This directive requires insurers to adhere to the prudent person principle and prohibits premium adjustments intended to correct previously insufficient reserve calculations. Additionally, insurers must diligently monitor capital market risks and ensure immediate reporting to management and the regulator if the permanent fulfillment of contractual obligations is endangered.
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