Ministerial Decree of September 22, 2016 setting the maximum reference interest rate for long-term life insurance operations referred to in Article 19 of the Law of July 9, 1975 on the control of insurance undertakings

FEDERAL PUBLIC SERVICE ECONOMY, SMEs, MIDDLE CLASSES AND ENERGY [C − 2016/11412] SEPTEMBER 22, 2016. — Ministerial Decree setting the maximum reference interest rate for long-term life insurance operations referred to in Article 19 of the Law of July 9, 1975 on the control of insurance undertakings The Minister of Economy and Consumers, Having regard to Article 216, § 1, of the Law of March 13, 2016 on the status and supervision of insurance or reinsurance undertakings; Having regard to the proposal of the National Bank of Belgium of August 31, 2016, received on September 6, 2016, to set the maximum interest rate for life insurance contracts at 0.75% in application of the criteria included in paragraphs 2 and 3 of the aforementioned article; Having regard to the opinion transmitted by the FSMA to the National Bank of Belgium on July 6, 2016, and attached to the proposal of the National Bank of Belgium of August 31, 2016; Considering that the proposal of the National Bank of Belgium must be examined on the basis of various principles, including competition rules; Having regard to the opinion of the Belgian Competition Authority, from which it appears that the NBB, for prudential reasons, may limit competition rules, provided that there are no other less competition-distorting measures that can achieve the same result; Considering that these other measures are de facto limited to imposing recovery measures in the event of solvency deficits, the outcome of these measures being highly uncertain; Having regard, furthermore, to the impact that a reduction of the maximum interest rate has on supplementary pensions; Considering that, pursuant to Article 2 of the Law of December 18, 2015, aimed at guaranteeing the sustainability and social character of supplementary pensions and at strengthening their supplementary nature in relation to retirement pensions, Article 24 of the Law of April 28, 2003, concerning supplementary pensions and their tax regime and certain supplementary social security benefits, is being amended; that the new Article 24 of this law provides for a new calculation to determine the minimum interest rate at which contributions provided for in the pension commitment must be capitalized; that this new regulation provides for a minimum return guarantee of 1.75%; Considering that, in the case of supplementary pensions concluded via group insurance with an insurance undertaking, a large number of contributions are invested in branch 21 life insurance; that there is therefore a clear link between the minimum return guarantee provided for supplementary pensions, in this case 1.75%, and the maximum interest rate provided for branch 21 life insurance; that a maximum interest rate for life insurance contracts of 0.75% would make it impossible for insurance undertakings to ensure a minimum return of 1.75% for the investment of supplementary pension contributions in long-term life insurance; Considering that the Council of State, in its opinion on
the aforementioned Law of December 18, 2015, also pointed out this problem and states that “the range within which the minimally guaranteed interest rate must fall under the proposed regulation (between 1.75% and 3.75%) does not correspond to the range within which the maximum interest rate must fall under the proposed prudential regulation (between 0.75% and 3.75%); that this may lead to a situation where, for the same agreement, the guaranteed minimum interest rate is higher than the maximum guaranteed interest rate permitted under prudential legislation.” Having regard to the risk that, with a maximum interest rate of 0.75%, employers will no longer be motivated to develop a supplementary pension scheme for their employees through the group insurance system; BELGIAN OFFICIAL GAZETTE — 17.10.2016 — BELGIAN MONITOR 70161 Having regard to the importance for insurance undertakings to be able to maintain a minimum margin between the interest rate they must offer as a minimum on supplementary pension insurance, on the one hand, and the maximum interest rate they may offer on long-term life insurance, on the other hand, Decides:
Sole Article. The maximum technical interest rate for life insurance contracts referred to in Article 216, § 1, of the Law of March 13, 2016 on the status and supervision of insurance or reinsurance undertakings, is maintained at 2%. Brussels, September 22, 2016. K. PEETERS 70162 BELGIAN OFFICIAL GAZETTE — 17.10.2016 — BELGIAN MONITOR