BERLIN, April 29 (Reuters) - Germany's Finance Ministry wants to enable German life insurers to offer products with higher guaranteed benefits again from 2025, the ministry told Reuters on Monday.
The so-called maximum actuarial interest rate is to be raised to 1.0% as of Jan. 1, 2025, the ministry said, in reply to a request by Reuters.
"The Finance Ministry is taking account of the increased interest rates on capital markets," it said.
The change will take effect from January 1 of next year. This means that the rate will rise again for the first time in over 30 years.
The German Association of Actuaries had proposed an increase in the maximum actuarial interest rate for new contracts to 1% from the current 0.25% at the end of 2023. It limits the guaranteed interest rate that insurers are allowed to guarantee over the entire term of a life insurance contract.
During the period of permanently low interest rates following the global financial crisis of 2008, the rate was continually reduced, most recently from 0.9% to 0.25% in 2022. (Reporting by Christian Kraemer und Alexander Huebner, writing by Maria Martinez, editing by Miranda Murray)
