MNB Raises Classic Life Insurance Policy Yield Threshold
Photo by Adriana Iacob/Shutterstock.com
The National Bank of Hungary (MNB) on Wednesday said it is raising the maximum threshold for guaranteed yields on classic life insurance policies, according to a report by state news wire MTI.
The measure could reduce premiums on classic life insurance policies and pave the way for a "renaissance" of guaranteed-yield constructions, MNB said, noting that while policyholders shoulder the burden of investment risk for unit-linked policies, insurers take on the investment risk for classic life insurance policies.
The central bank and financial market watchdog is raising the upper threshold of the annual yield for forint-based classic life insurance policies with multiple premium payments from 1.8% to 4%. The threshold for the yield offered for single-premium policies with terms up to five years will rise to 7%, and the threshold for euro-based policies will be raised from 0.6% to 1.5%.
MNB calculated the changes taking into consideration long-term government securities yields, the Ultimate Forward Rate (UFR) of the European Insurance and Occupational Pensions Authority (EIOPA), and interest local insurers have been paid on mathematical reserves over the past two years.
In August, there were around 302,000 classic, multiple-premium life insurance policies in force in Hungary.
Lenders' Home Loan Outlays at HUF 344 bln in H2 2023
EC Calls on Hungary to Comply With CJEU Ruling on Asylum See...
Poland Retail Sales Growth Stable in March
Hungary Launches HUF 15 bln Tourism Sector Support Program
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
