FRANKFURT, May 5 (Reuters) - Germany's top insurance regulator is urging Berlin to ease requirements on the insurance industry to build up capital buffers designed to guard against the effects of low interest rates, he told Handelsblatt in an interview published on Friday.
Many German life insurers sold savings policies with guaranteed interest rates as high as 4 percent in the past and, with current interest rates near zero, are finding it increasingly tough to achieve the returns needed to pay policyholders.
Since 2011, Germany has required that insurers set aside special reserves to make sure that savings guarantees will be paid as promised. Companies have had to dip into their hidden reserves or sell assets to finance the interest rate fund.
"This is becoming increasingly difficult from one company to the next," Frank Grund, head of insurance supervision at financial market regulator Bafin, said in the interview.
He said the interest-rate reserve fund, known as the ZZR in Germany, would grow to around 64 billion euros ($70 billion) in 2017 after insurers pay an additional 20 billion euros this year.
"We will have built up a security buffer that allows us to make a further buildup a little milder," he said.
"I believe it is sensible to think about a change toward a more moderate build-up from 2018 onwards," he said. "But it is a decision for lawmakers." ($1 = 0.9125 euros) (Reporting by Tom Sims; Editing by Georgina Prodhan)