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New technical rate in Life Insurance as of 1 January 2020

Reduction of the technical rate for new Life Insurance policies

Due to the persistent decline in interest rates on the financial markets, the 'Commissariat aux Assurances' has decided to reduce the guaranteed technical rate to 0% as of 1 January 2020 for new life insurance policies.

Why this interest rate cut ? 

Life insurance is a long-term commitment, mainly covered by Eurozone government bonds. Interest rates on these bonds have fallen significantly in recent years. Integrale Luxembourg, like all other market participants, has a legal obligation to adjust its guaranteed rate. 

What are the consequences for new and existing policies ? 

The new 0% rate will apply from 1 January 2020 :

  1. to all new policies,
  2. to all new affiliations in existing policies,
  3. to new payments for single premium policies,
  4. to premium increases for policies with recurring premiums. 

This change in rate has no impact on the reserves established at the end of December 2019, which benefit and will continue to benefit from the tariff bands of the past, depending on their date of establishment, until the expiry of the policies.

What impact on the principle of total profit distribution ? 

We remind you that this is a change in the guaranteed rate. Depending on the financial results, profit shares may be added to form the total return attributed to the policies. 

Integrale Luxembourg, a true partner in group and life insurance, maintains its policy of competitive returns and limited costs. The average return for 2019 will only be known once the accounts are closed. 

In 2018, the minimum net total return granted by Integrale Luxembourg was 2.00%. Over the reference period 2011-2018, Integrale Luxembourg's affiliates enjoyed an average net return of 2.84%. 

We fully understand that this change is quite technical: your usual Integrale Luxembourg contacts are of course at your disposal for any further information. 

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