MILAN (Reuters) - An Italian life insurance guarantee fund to be set up next year will have a capacity of 4 billion euros ($4.27 billion) in ten years, much more than comparable funds in France and Germany, the president of insurance association ANIA said on Wednesday.
The fund aims to protect policyholders and avoid cases similar to Eurovita, which this year became the first Italian insurer to be placed under special administration after higher interest rates and a drop in the value of bonds led savers to redeem their policies, draining its capital reserves.
Italy's top insurers, together with Germany's Allianz (ETR:ALVG), in June agreed to a multi-billion-euro rescue deal for Eurovita backed by the Rome government.
The new fund, set up under the government's 2024 budget, will gradually reach a financial endowment of at least 0.5% of the amount of life insurance reserves held by companies.
According to preliminary estimates based on June data, it "should reach 4 billion euros in ten years", Maria Bianca Farina said during an insurance event in Milan.
That would be ten times the size of a similar fund in France and five times as big as one in Germany, she said.
The fund will protect claims worth up to 100,000 euros.
Speaking at the same Milan event, Luigi Federico Signorini, who heads the Italian insurance supervisor IVASS, said the guarantee fund "if implemented, will be an important tool for crisis management, a tool we do not have today".
Under the terms set out in the budget, which is still subject to possible change in parliament, Italian insurers must participate in the fund when their annual income from life insurance premiums is 50 million euros or more.
($1 = 0.9371 euros)