Regulatory Alerts2017-07-12
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FMA Circular on the Assumed Interest Rate for Health Insurance Similar to Life Assurance
The Austrian Financial Market Authority mandates that insurance undertakings cap the assumed interest rate for health insurance similar to life assurance at a maximum of 1% starting January 1, 2018. This directive requires insurers to calculate reserves prudently based on current low capital market conditions, explicitly prohibiting premium adjustments to correct previously insufficient reserve calculations. Insurers must also establish internal reporting protocols where actuaries notify management and the regulator if the permanent fulfillment of insurance obligations is endangered.
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