Regulatory Alerts2020-10-07
FMA Circular on Assumed Interest Rate in Health Insurance
The Financial Market Authority requires supervised health insurance undertakings to cap the assumed interest rate for calculating reserves at a maximum of 0.5% from July 1, 2021, aligning with the prudent person principle and prevailing low capital market conditions. Insurance companies must ensure premiums remain sufficient to guarantee ongoing obligations, meaning retroactive premium adjustments cannot compensate for previously inadequate reserve calculations. Furthermore, responsible actuaries must diligently monitor capital market risks and promptly notify management or the FMA if the permanent fulfillment of contractual obligations is threatened.
Share