German finance ministry to lower guarantee rates below actuaries’ projections

German finance ministry to lower guarantee rates below actuaries’ projections

The German Ministry of Finance is to lower the maximum guaranteed interest rate for the new business domestic life industry from 2.25% to 1.75% despite a recommendation from the German Actuarial Society (GAS) that the appropriate rate is 2%.

A spokesman for the ministry said an – unannounced – political decision had been made by the ministry to decrease the rate further than GAS recommended because the future interest rate environment could force the rate to be lowered once again. Additionally,