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PARIS Oct 14 French life insurers have not cut
their payouts enough in light of how little their assets are
earning at currently record low interest rates, the head of the
French central bank warned on Friday.
Speaking as the head of the ACPR financial sector regulator
at an insurance conference, Francois Villeroy de Galhau said
that life insurers had on average trimmed their annual payouts
last year by a quarter of a percentage point.
But that was not enough as treasury bond yields had fallen
much more, leaving insurers paying clients more than they were
earning on bonds, Villeroy said.
"I would therefore urge insurers once again to show
moderation and to be realistic when setting rates of return on
euro-denominated life insurance policies for 2016," Villeroy
Thanks to a favourable tax treatment, life insurance
contracts are French retail investors' savings vehicle of
preference with on average 24,000 euros ($26,882) per habitant
in a contract.
($1 = 0.8928 euros)
(Reporting by Leigh Thomas; editing by Michel Rose)