Note d’information 23/3 du Commissariat aux Assurances relative à des offres de rendements garantis supérieurs au taux d’intérêt technique maximal autorisé par le CAA

The Information Note 23/3 of the CAA discusses the recent observation by the CAA that some Luxembourgish life insurance companies are offering guaranteed returns that exceed the maximum technical interest rate allowed by the CAA for calculating technical provisions.
The CAA reminds companies that such offers require prior notification in the form of a separate technical note, and that the calculation of provisions for these contracts must always be done with an interest rate that is equal to or lower than the maximum technical interest rate.
Additionally, the guarantee cannot be financed by using any profit-sharing provisions. The CAA emphasizes that a guaranteed return cannot be considered a profit-sharing provision but should be considered a classic interest rate guarantee.
Finally, the information note recalls the mechanism of increased technical rates, which is a possibility for derogation from the maximum technical interest rate allowed by the CAA for calculating technical provisions, and whose conditions of use are set out in point 2 of CAA Circular letter 98/1 on technical interest rates.