The guaranteed maximum interest rate for life insurance branch 21 in Belgium will increase from 2.5% to 3.75% following the publication of a ministerial decree in the official gazette on Monday, according to L’Echo.
The new maximum rate, the highest allowed under current legislation, will apply to long-term life insurance contracts (over 8 years) signed from 1 January 2026. For existing contracts, it will affect flexible premiums paid and guaranteed interest rate increases made from that same date.
Economy Minister David Clarinval (MR), who initiated the measure, also plans to draft legislation to abolish this legal ceiling in the future in collaboration with Finance Minister Jan Jambon (N-VA).
Clarinval justifies the move based on advice from the FSMA, the financial services and markets authority, which considers the mechanism disproportionate and a restriction on free market competition. Additionally, scrapping the interest rate cap aligns with the government’s coalition agreement.
Insurers, however, remain hesitant. Industry group Assuralia, cited by L’Echo, views exceeding the legally calculated 2.5% cap as “imprudent” given its protective nature. Current law does allow insurers to exceed the ceiling, but only if the guaranteed rate applies for a maximum of eight years.
According to an L’Echo survey of major Belgian insurance companies, the immediate impact of the change is expected to be minimal.
