The Minister of Economy has decided to keep the maximum interest rate applicable to long-term life insurance policies for 2027 at 3.75%, despite the National Bank's proposal to lower it to 2.75%.
While several insurers have recently announced an increase in the interest rates of their long-term life insurance policies (branch 21), Economy Minister David Clarinval has chosen to support this competitive dynamic in the savings market. Last July, the National Bank had proposed to the minister that the maximum interest rate for life insurance policies for 2027 be set at 2.75%. The FSMA, as in the previous year, issued an unfavourable opinion on this proposal and argued for the abolition of the interest rate cap system. By ministerial decree, David Clarinval decided to keep the maximum rate at 3.75% for 2027, the maximum ceiling allowed under current legislation.
Considerable rise in interest rates since January 2026
Until the end of 2025, the maximum interest rate that insurers could offer on their long-term life insurance policies was capped at 2.50%. A decision taken under the previous government.
The first time Minister Clarinval, as the new Minister of Economy, was granted the power to change the interest rate was for the year 2026. The National Bank had proposed that he keep this maximum interest rate at 2.50% until the end of 2026. However, the minister decided to change course and liberalise this market segment after more than a decade of state intervention. The maximum interest rate for 2026 was therefore set by the minister at the absolute ceiling allowed by current law, namely 3.75%. This decision was met with scepticism by some stakeholders. According to them, the interest rates offered by insurers would not increase significantly as a result of the minister's decision. However, the past eight months have proven exactly the opposite. While most insurers, until the end of 2025, were still offering interest rates below the old limit of 2.50%, some insurers are now offering interest rates of as much as 3.25%. The recent issuance of 10-year government bonds at an interest rate of 3.7% (gross) has further reinforced this dynamic in the savings insurance markets.
Towards the complete removal of the cap
Minister Clarinval intends to go even further. The complete abolition of the interest rate cap system is included in the draft bill on various provisions relating to insurance, approved in first reading by the Council of Ministers on 20 June. To ensure the stability of the sector, the bill also provides for new powers for the National Bank: if an insurer offers clearly unrealistic interest rates, the prudential authority will be able to intervene to have the situation corrected. The text is currently being submitted to the Council of State for its opinion and will be presented to Parliament before the end of the year. Once this law comes into force, the cap system will be abolished. The maximum interest rate set by ministerial decree will then automatically cease to apply.
David Clarinval, Minister of Economy: "We are enabling insurers to offer more attractive deals and to make better use of citizens' savings. This measure helps push interest rates upward, boosts purchasing power and strengthens competition to the benefit of savers."