The SIBA feels duty bound to advise the insurance public and those with life insurance policies in particular that Ennia and Fatum have announced the decrease of their actuarial interest rates:
In separate but recent memorandums, both companies advised agents and brokers that in light of falling markets, dismantling of the Netherlands Antilles and the ensuing debt reforms (amongst other reasons) they are now forced to reduce the "guaranteed" interest rate on life and life related products with a savings element from 4% to 3%.
Existing clients are given the assurance that their rights to the traditional 4% will be guaranteed despite the negative outlook.
All past and future customers will however maintain the rights to "profit-sharing" which means that any interest above the specified rate of 3% will be shared with clients. This will continue to happen by way of a "profit-letter" annually.
The decrease will not be applicable for Pension Plans based on Ministerial decree, which reads:
A socially acceptable old age pension constitutes a pension that amounts to no more than 70% of the pension-earning salary, which shall accrue by no more than 2% per year, governed by generally accepted actuarial principles whereby an actuarial interest rate of at least 4% is applied.
While this is unpleasant news, the SIBA is pleased that the aforementioned insurers informed "us" who advise clients on these products along the lines of financial planning and trust that all insurers taking this decision to do the same in a timely manner.
Sincerely,
SINT MAARTEN INSURANCE BROKERS ASSOCIATION
Neil D. Henderson
President