Israel’s Ministry of Finance has reportedly
ruled that the life expectancy component of an employee benefit
known as managers insurance will no longer be available to under
55-year-olds.
Managers insurance typically provides a
monthly allocation into an insurance fund of 18.3 percent of the
employee’s salary, paid in part by the employer and in part by the
employee. A portion of the employers’ contributions are also in
lieu of severance pay.
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Israeli newspaper Haaretz reported that the
current situation means that a 30-year-old could expect the payout
on a managers insurance policy to remain intact, even if he or she
lived longer than the insurance company had predicted when the
policy was taken out.
However, actuarial estimates have reportedly
found that life expectancy is rising much faster in Israel than
indicated by a previous estimate in 2008.
Since adequately predicting life expectancies
is difficult, Israel’s Ministry of Finance is said to have decided
that uncertainty and risk could threaten Israeli companies’
stability.
It is reported that the insurance companies
most likely to be affected by the development are Migdal, Clal and
Harel, which are said to hold 36%, 23% and 13% of the market for
managers insurance respectively in Israel.
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