Proposition 51K2844

Projet de loi portant modification de la procédure de fixation du taux maximum de référence pour les opérations d'assurance à long terme.

General information ¶

Submitted by

PS | SP MR Open Vld Vooruit Purple Ⅰ

Submission date

Jan. 11, 2007

Official page

Visit

Status

Adopted

Requirement

Simple

Subjects

life assurance interest insurance

Voting ¶

Voted to adopt

Vooruit PS | SP Open Vld MR

Contact form ¶

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Discussion ¶

March 8, 2007 | Plenary session (Chamber of representatives)

Full source

I refer to my written report.

After the discussion of this bill, I will close the afternoon session. After that, we have not so much work anymore. We will probably vote before 19:00.

Mr. Speaker, Mr. Minister, I will not be so short this time, because this bill does not take away our approval. We need to vote on this bill. This is about the maximum interest that the insurance companies may grant to the consumer on life insurance that is used by many Belgians as a savings tool.

During the work in the committee, in response to the PS’s request to organise hearings, a question was supported by my group – eventually asked for two opinions.

A first advice came from Test-Buy, which represents the interests of the consumer. The second opinion came from the CBFA on the chosen procedures.

Both opinions were negative. The last advice was special, as will be shown. I will come back to that later.

Today, the maximum reference rate for life insurance through KB is fixed at 3.75%. For years, the guaranteed interest rate on life insurance premiums was 4.75% during the entire term of the contract. This has not been the case since 1999.

We have long known that the insurance sector is a requesting party to lower this maximum interest rate even further.The argument they argue for this is the fact that a maximum interest rate of 3.75% would pose a risk to the solvency of the companies.

Of course, this argument does not support. After all, we are talking here about a maximum interest rate, which the insurance companies can perfectly go down if they want to do so in practice, and they do so. I invite you to check if there are still many companies that offer a 3.75% interest rate on their life insurance.

Furthermore, we also note that there are no insurance undertakings that are at risk of being overrun by a too high reference rate for life insurance. After all, the CBFA closely monitors the insurer’s solvency and will immediately intervene if they are already planning to offer too high interest rates.

The first argument for lowering the maximum interest rate is therefore, in our view, of little importance.

A second argument for lowering the maximum interest rate concerns the possible conflict with the first European directive (Leven) which sets the maximum interest rate at 60% of the state bond loans. We do not share this view of a possible conflict. In fact, the Directive does not require that only the current interest rate of State bond loans should be taken into account.

Insurers now still reap the fruits of investments made in the past at a time when the interest rate was much higher.

It is therefore necessary to take into account the average of the long-term interest rates valid in the past rather than making a momentary record. That the CBFA shares that interpretation of the directive is evident from the fact that, in the contrary, it would undoubtedly have taken measures.

Furthermore, the Directive dates back to 1979. It is difficult to understand that an adaptation would now need to be made due to the incompatibility with the Directive. This view is also shared by the consumer organization Test-Akkup, which, by the way, calls on all parliamentarians in a press release not to approve the draft.

With the draft, the Minister of Economy intends to amend the procedure used to establish the maximum reference rate. Until now, this has always happened through a royal decision and therefore after consultation in the government. With the present draft, the Government wants to transfer that power to the CBFA.

At first glance, it seems to be a more objective procedure, which in itself can be considered reasonable. However, there is a big problem. The CBFA itself states that it does not want and does not have that power, since the fixing of the maximum reference rate is primarily a decision that must be taken by the politics and not a mere technical issue.

I can herewith quote from the opinion contained in the Annual Report 2005 that the CBFA has become the committee and which is based on a 2004 opinion. The CBFA writes literally: “Given the fact that the establishment of the maximum reference rate implies the weighing of various civil society interests, this seems to require, in the first place, in accordance with the general principles of our law, the intervention of a politically responsible authority. Consequently, it seems to us that there are serious doubts as to whether the determination of the maximum guaranteed technical interest rate is a technical point as provided for in Article 64 of the Act of 2 August 2002, which can be regulated by means of CBFA regulations.”

In other words, the CBFA itself claims that the competence does not belong to it. In addition, the CBFA is a body that should watch over the profitability of the sector and not over the interests of the consumer. The voice of the insurance sector will be heard, the voice of the consumer at all not.

In summary, in other words, we are presented with a draft law that, firstly, grants a power to an institution that itself says it is not competent and, secondly, is based on a false assumption, namely that the maximum interest rate of 3.75 percent could jeopardize the solvency of the insurers, which is not true. It is a maximum. This can be undermined and there is no conflict with the directive.

For us, the question is not who should set the maximum, but whether a maximum is needed. There is no maximum for savings books. Why should there be a maximum for life insurance? These are also savings products, though in the longer term. For us, there must also be free competition and the consumer must be able to choose the society that offers the highest reasonable return. The insurance company should allocate a interest rate based on a number of business economic parameters and the competition, which is in the benefit of the consumer, should be able to play full play here. Why should competition be restricted?

For all these reasons, as in the committee, we will vote against the draft. I remind the socialist colleagues that Test-Akkup, with whom they would like to get out of hand, has urged every member of parliament to vote against the draft. I am curious to hear, Mr. Speaker, colleagues, how important the consumer is considered.

Mr. Speaker, I see Mrs. Pieters standing in front of me, but I hear Mrs. Creyf. This is Mrs. Creyf’s speech. I have no objection that it is brought by Mrs. Pieters. I just say that the discourse is not correct.

There are three reasons why we submitted the bill.

The first reason is that most European countries – yet our competitors in that market – do not have a system of a guaranteed maximum interest rate. The existing interest rate usually fluctuates – today – between 2.75 and 3.35 percent. I will list the countries, because then you will immediately hear that they are our neighbors. These are Denmark, France, Italy, the Netherlands, Spain, Luxembourg. I can add Norway, Austria and Sweden. Imagine those who are on the market with products that, as far as they are concerned, present a much more viable situation for the insurance sector than the maximum interest rate we have.

There is a second reason. That is the most compelling reason. The European Directive of 5 March 1979 states that the maximum interest rate must not be higher than 60 percent of the interest rate of government bond loans.

Mrs. Peters asks why we come to that now. Mr. Speaker, it is a public secret that interest rates have remained very high for a very long time and 3.75% was not a disability at that time. However, if interest rates become ⁇ low – and we are still in a situation where this has been going on for a fairly long time – the sector in question is placed for an impossible contract. On the one hand, a guaranteed income must be arranged but they themselves in their participation in the economic circulation are naturally limited by and embedded in the percentages of the investments they can realize.

There is also a third reason. I would not like, as it is too easily suggested by Test-Buy, that this happens at the request of the insurance companies. You do not hear me say that the insurance companies do not ask that. However, it is primarily a recommendation from the International Monetary Fund that Belgium has recommended to inspire itself from the Luxembourg scheme. There, too, it is the regulator, the CBFA or the Commission for Banking, Finance and Insurance, who deals with this.

Furthermore, there is another technical issue. Politics does not take it out of hand. If the CBFA does not make a decision, the Minister of Economy can make a decision because the CBFA has made the deadline expire. Furthermore, if a decision is made by the CBFA, there is still a right of evocation in which the government draws the case to itself and makes a decision. I think that in those circumstances all conditions are met to accept this bill.

Mrs. Peters, the Chamber has the last word.

Mr. Minister heard me and saw Mrs. Creyf, that is clear.

There is a difference.

There are never accusations in this world if they come from the ministers. That’s right, Mrs. Creyf couldn’t be here today. Mr. Minister, you know very well that I followed the debate. We presented our arguments in the committee. You bring yours forward. However, this did not convince Mrs. Creyf and me.

Mr. Speaker, I would like to add that the studies of Test-Buy are always interesting, but that Test-Buy therefore does not always have the truth in packages.

In the pacht. I thought I could understand the nuances.