July 18, 2014 / 11:12 AM / 3 years ago

Austria cuts guaranteed life insurance rates

VIENNA, July 18 (Reuters) - Austria's financial regulator will cut the maximum guaranteed interest rates insurers are allowed to offer for life insurance and state-subsidised pension schemes to 1.5 percent from 1.75 percent.

The FMA said it was making the cut, which will take effect for new contracts from 2015, because of a sustained low interest-rate environment.

"This measure should ensure that guaranteed benefits from insurance contracts can continue to be fulfilled," the watchdog said in a statement on Friday.

In December, the FMA ordered insurers offering guaranteed-interest life-insurance products to make provisions to ensure they could make good on them.

Reporting by Georgina Prodhan; Editing by Pravin Char

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