Financial Services Supervision Law (Insurance), 5741-1981
חוק הפיקוח על שירותים פיננסיים (ביטוח), תשמ"א-1981
Published: 1981-04-23Consolidated Hebrew text as of 2026-07-26 · Last amended 2026-07-22✓ Amendment status checked against the Knesset legislation record on 2026-09-29
Premium
Unofficial English translation — for reference only. It may contain errors or omissions and cannot be relied on as a legal text. Only the Hebrew text published in Reshumot is legally binding.More
This English text was translated from the official Hebrew using a range of translation tools, and it undergoes ongoing checks and updates. It is not a certified translation.
Despite these checks, it may contain errors, omissions, or imprecise renderings of legal terminology and cross-references, and it may not yet reflect the latest amendments. It cannot be relied upon as a legal text.
The Hebrew text as published in Reshumot (ספר החוקים) and on the Knesset website is the sole authoritative and legally binding version. In any discrepancy, the Hebrew text prevails.
This translation is provided for informational purposes only and does not constitute legal advice. For use in legal proceedings, request a certified Expert Legal Opinion.
Section E: Government Assistance
Government Assistance§
78n.
(a)
(1)The Government shall assist the veteran funds in the arrangement, including their members, by transferring monies from the state budget in the sum of NIS 78,300 million, which includes the subsidy value; for this purpose, "subsidy value" – the difference between the amount of linked interest paid by the Government on designated bonds of the "Miron" type issued to the veteran funds in the arrangement and not yet redeemed on the 29th of Nisan 5763 (30 April 2003), and the amount of linked interest that would have been payable on those bonds had the interest rate thereon been 4%;
(2)to the assistance amount pursuant to paragraph (1) shall be added an amount equal to the difference, as defined in section 78i(b)(8), to the extent required pursuant to that section.
(3)to the amounts pursuant to paragraphs (1) and (2) shall be added amounts from the general safety cushion as defined in section 78o1(a), to the extent required pursuant to section 78o1, and subject to the conditions established in that section.
(b)The transfer of monies to each veteran fund within the framework of the assistance pursuant to subsection (a) shall be carried out in accordance with the Minister's instructions, after consultation with the Commissioner, provided that no monies shall be transferred to any fund unless the uniform rules have been implemented in it, an efficiency plan for its operation as referred to in section 78l has been implemented in it, and the fund complies with all the provisions pursuant to this Chapter (hereinafter – eligible fund).
(c)The amount referred to in subsection (a)(1) shall be linked to the index, such that each amount transferred to an eligible fund shall be updated according to the rate of increase of the index known at the time of the transfer of each amount compared to the index for January 2003, with the addition of linked interest at a rate of 4% per annum.
(d)Government assistance to the veteran funds in the arrangement, including their members, shall be provided pursuant to the provisions of this section only; no addition to a pension shall be paid, by the Government or by the veteran fund, to a member of a veteran fund on account of the difference between the pension calculated according to the salary ratios average method and the pension calculated according to any other method.
Assistance Fund§
78o.
The Government may, for the purpose of spreading the expenditure from the state budget on account of the assistance to the veteran funds as referred to in section 78n(a)(1) and (2), establish a fund to which part of the amounts designated for assistance to the eligible funds shall be transferred before the date on which these amounts are to be transferred to the funds; the fund shall be managed in the manner and on the conditions to be directed by the Minister of Finance.
General safety net for veteran funds in arrangement§
78o1.
(a)Funds from the State budget shall be transferred to the veteran funds in arrangement, subject to the conditions set out in this section, for the purpose of mitigating the effect of changes in the interest rate curve on the rights of members in those funds (in this section – the general safety net).
(b)The amount of the general safety net shall be calculated, in each calculation year, as the aggregate of all amounts derived under subsection (c) in respect of each of the veteran funds in arrangement, provided that the amount of the general safety net shall not exceed the lower of the following:
(1)the maximum amount referred to in subsection (d) or (e), as the case may be;
(2)the aggregate of all actuarial deficit amounts in the balance sheets of each of the veteran funds in arrangement in which there is an actuarial deficit in that calculation year; for the purpose of calculating the deficit as aforesaid, funds due to a fund under this section shall not be regarded as assets of the fund.
(c)The amount in respect of each of the veteran funds in arrangement shall be calculated, in each calculation year, as the aggregate of the amounts derived under paragraphs (1) to (5) below, less the amount referred to in paragraph (6) below, provided that the amount obtained after the said deduction is a positive amount:
(1)the amount obtained by aggregating all of the following:
(a)the cumulative amount in the previous year;
(b)the amount obtained by multiplying the expected rate of index change for the calculation year by the cumulative amount in the previous year;
(c)the amount obtained by multiplying the risk-free interest rate for the calculation year by the amount obtained by aggregating the amounts referred to in sub-paragraphs (a) and (b) of this paragraph;
(2)the amount obtained by multiplying the amount referred to in sub-paragraph (a) below by the rate referred to in sub-paragraph (b) below:
(a)the amount obtained by aggregating the fund's balance sheet result at an interest rate of 4% for the previous year and the product of the expected rate of index change for the calculation year multiplied by that balance sheet result;
(b)the positive or negative difference, as the case may be, between an interest rate of 4% and the risk-free interest rate for the calculation year;
(3)the positive or negative difference, as the case may be, between the amount referred to in sub-paragraph (a) below and the amount referred to in sub-paragraph (b) below:
(a)the amount obtained by aggregating the amounts referred to in sub-paragraphs (1) and (2) below, less the amount referred to in sub-paragraph (3) below:
(1)an amount equal to the product of 4% multiplied by the amount obtained by aggregating the value of the marketable assets in the fund's balance sheet for the previous year and the product of the expected rate of index change for the calculation year multiplied by that asset value;
(2)an amount equal to the aggregate of the products of each receipt plus index by the proportionate part of an interest rate of 4% from the date of receipt to the end of the calculation year; for this purpose, "receipt plus index" – a payment received by the fund in the calculation year, plus the product of the proportionate part of the expected rate of index change for the calculation year from the date of receipt to the end of the calculation year, multiplied by that receipt;
(3)an amount equal to the aggregate of the products of each payment plus index by the proportionate part of an interest rate of 4% from the date of payment to the end of the calculation year; for this purpose, "payment plus index" – a payment made by the fund in the calculation year, plus the product of the proportionate part of the expected rate of index change for the calculation year from the date of payment to the end of the calculation year, multiplied by that payment;
(b)the amount obtained by aggregating the amounts referred to in sub-paragraphs (1) and (2) below, less the amount referred to in sub-paragraph (3) below:
(1)an amount equal to the product of the risk-free interest rate for the calculation year multiplied by the amount obtained by aggregating the value of the marketable assets in the fund's balance sheet for the previous year and the product of the expected rate of index change for the calculation year multiplied by that asset value;
(2)an amount equal to the aggregate of the products of each receipt plus index as defined in paragraph (3)(a)(2), by the proportionate part of the risk-free interest rate for the calculation year from the date of receipt to the end of the calculation year;
(3)an amount equal to the aggregate of the products of each payment plus index as defined in paragraph (3)(a)(3), by the proportionate part of the risk-free interest rate for the calculation year from the date of payment to the end of the calculation year;
(4)the positive or negative difference, as the case may be, between the effect of yield according to the interest rate curve for the calculation year and the effect of yield according to 4% for the calculation year, less the amount referred to in paragraph (3);
(5)the positive or negative difference, as the case may be, between the amount referred to in sub-paragraph (a) below and the amount referred to in sub-paragraph (b) below:
(a)the fund's balance sheet result for the calculation year, according to the interest rate curve;
(b)the fund's balance sheet result for the calculation year, according to an interest rate of 4%;
(6)an amount equal to the aggregate of the amounts from the general safety net that were transferred to that fund under this section in the period from the date of commencement of Amendment No. 33 to the end of the calculation year, plus the expected rate of index change and plus the risk-free interest rate, all in respect of each year from the date of payment of each such amount to the end of the calculation year.
(d)The maximum amount of the general safety net in each calculation year shall be the amount referred to in paragraph (1) below, less the amount referred to in paragraph (2) below:
(1)a total of NIS 11,320 million, plus the rate of index change by which the funds' balance sheets were calculated for the calculation year as against the index of December 2008, and plus interest at the rate of 3.48% per annum for the period from January 2009 to the end of the calculation year;
(2)the total of the amounts transferred to all the veteran funds in arrangement from the general safety net under this section in the period from the date of commencement of Amendment No. 33 to the end of the calculation year, plus the rate of index change by which the funds' balance sheets were calculated for the calculation year as against the index of the month in which each such amount was paid, and plus interest at the rate of 3.48% per annum for the period from the date of payment to the end of the calculation year.
(e)Notwithstanding the provisions of subsection (d) –
(1)if Government assistance was given to the veteran funds in arrangement in addition to the assistance prescribed in section 78n as it read on the eve of the commencement of Amendment No. 33, the amount of the additional Government assistance shall be deducted from the maximum amount referred to in subsection (d), provided that the rights of members in those funds as they existed on the eve of the granting of the additional Government assistance shall not be prejudiced by reason of that deduction;
(2)if in a calculation year the ratio between the amount referred to in subsection (d)(1) and the total liabilities of all the veteran funds in arrangement exceeds 11.8%, the maximum amount of the general safety net for that year shall be an amount equal to the product of 11.8% multiplied by the total liabilities of all the veteran funds in arrangement as determined in the funds' balance sheets for the calculation year, provided that the maximum amount of the general safety net under this paragraph shall not be less than the amount obtained by aggregating the following two:
(a)the higher of the following (in this paragraph – the utilised amount):
(1)the amount from the general safety net calculated under subsection (c) in respect of all the veteran funds in arrangement in the previous year, plus the expected rate of index change for the calculation year and plus the risk-free interest rate for the calculation year;
(2)the cumulative amount in the calculation year, or the maximum amount in the previous year plus index and interest, whichever is lower; for this purpose, "the maximum amount in the previous year plus index and interest" – the maximum amount of the general safety net as calculated in the previous year under subsection (d) or under this subsection, as the case may be, plus the rate of index change by which the funds' balance sheets were calculated for the calculation year as against the index by which the funds' balance sheets were calculated for the previous year, and plus interest at the rate of 3.48% for the calculation year;
(b)the difference between the maximum amount in the previous year plus index and interest and the utilised amount, when that difference is multiplied by 11.8% of the total liabilities of the veteran funds in arrangement as determined in the funds' balance sheets for the calculation year and divided by the maximum amount in the previous year plus index and interest; for this purpose, "the maximum amount in the previous year plus index and interest" – as defined in sub-paragraph (a)(2).
(f)Funds from the general safety net shall be transferred to a veteran fund in arrangement only after all its assets have been exhausted, subject to the provisions of subsection (g), and in accordance with the Commissioner's instructions regarding the manner of transferring the funds, if such instructions have been given; for the purpose of this subsection, funds due to the fund under this section shall not be regarded as assets of the fund.
(g)Funds from the general safety net shall not be transferred to a veteran fund in arrangement in an amount exceeding the amount required by the fund in order to meet its liabilities.
(h)Notwithstanding the provisions on the actuarial balancing mechanism set out in the uniform articles of association, in a calculation year in which an actuarial surplus arises in a veteran fund in arrangement, funds due to the fund under this section shall not be regarded, for the purposes of those mechanism provisions, as assets of the fund; however, if an actuarial surplus arises in the fund after the rights of its members have been reduced by reason of the actuarial balancing mechanism as aforesaid following the date of commencement of Amendment No. 33 (in this subsection – reduction of rights), funds due to the fund under this section shall be regarded as assets of the fund, up to the lower of the following:
(1)the amount obtained by multiplying the following two:
(a)the fund's liabilities as they appear in the fund's balance sheet in which the actuarial surplus was presented;
(b)the rate of reduction of rights, divided by the rate obtained from the positive difference between the rate of reduction of rights and 1;
(2)the maximum amount of the general safety net under subsections (c) to (e), as the case may be.
(i)In this section –
"effect of yield according to the interest rate curve", in respect of a particular year – the positive or negative difference, as the case may be, between the amount referred to in paragraph (1) below and the amount referred to in paragraph (2) below:
(1)the fund's balance sheet result for that year; however, for this purpose the value of the marketable assets shall be calculated as the amount obtained by aggregating the amounts referred to in sub-paragraphs (a) to (d) below less the amount referred to in sub-paragraph (e) below:
(a)the value of the marketable assets in the fund's balance sheet for the year preceding that year;
(b)an amount equal to the product of the expected rate of index change for the year in respect of which the fund's balance sheet result was calculated, multiplied by the amount referred to in sub-paragraph (a);
(c)an amount equal to the product of the risk-free interest rate for the year in respect of which the fund's balance sheet result was calculated, multiplied by the amount obtained by aggregating the amounts referred to in sub-paragraphs (a) and (b);
(d)an amount equal to the aggregate of the receipts plus index, together with the aggregate of the products of each receipt plus index by the proportionate part of the risk-free interest rate for the year in respect of which the fund's balance sheet result was calculated, from the date of receipt to the end of that year; for this purpose, "receipt plus index" – a receipt received by the fund in that year, plus the product of the proportionate part of the expected rate of index change for the year in respect of which the fund's balance sheet result was calculated from the date of receipt to the end of that year, multiplied by that receipt;
(e)an amount equal to the aggregate of the payments plus index, together with the aggregate of the products of each payment plus index by the proportionate part of the risk-free interest rate for the year in respect of which the fund's balance sheet result was calculated, from the date of payment to the end of that year; for this purpose, "payment plus index" – a payment made by the fund in that year, plus the product of the proportionate part of the expected rate of index change for the year in respect of which the fund's balance sheet result was calculated from the date of payment to the end of that year, multiplied by that payment;
(2)the fund's balance sheet result according to the interest rate curve for that year;
"effect of yield according to 4%", in respect of a particular year – the positive or negative difference, as the case may be, between the amount referred to in paragraph (1) below and the amount referred to in paragraph (2) below:
(1)the fund's balance sheet result for that year; however, for this purpose the value of the marketable assets shall be calculated as the amount obtained by aggregating the amounts referred to in sub-paragraphs (a) to (d) below less the amount referred to in sub-paragraph (e) below:
(a)the value of the marketable assets in the fund's balance sheet for the year preceding that year;
(b)an amount equal to the product of the expected rate of index change for the year in respect of which the fund's balance sheet result was calculated, multiplied by the amount referred to in sub-paragraph (a);
(c)an amount equal to the product of an interest rate of 4% multiplied by the amount obtained by aggregating the amounts referred to in sub-paragraphs (a) and (b);
(d)an amount equal to the aggregate of the receipts plus index, together with the aggregate of the products of each receipt plus index by the proportionate part of an interest rate of 4% from the date of receipt to the end of that year; for this purpose, "receipt plus index" – as defined in paragraph (1)(d) of the definition of "effect of yield according to the interest rate curve";
(e)an amount equal to the aggregate of the payments plus index, together with the aggregate of the products of each payment plus index by the proportionate part of an interest rate of 4% from the date of payment to the end of that year; for this purpose, "payment plus index" – as defined in paragraph (1)(e) of the definition of "effect of yield according to the interest rate curve";
(2)the fund's balance sheet result according to an interest rate of 4% for that year;
"marketable assets" – the total assets of a veteran fund in arrangement, excluding:
(1)a non-marketable bond issued by the State of Israel to a veteran fund in arrangement, under the State Loan Law, 5739-1979;
(2)the amounts of Government assistance under paragraphs (1) and (2) of section 78n(a);
(3)other assets that are not transferable to another person under law or agreement;
"cumulative amount", in a particular year – the amount from the general safety net, obtained by aggregating the amounts referred to in paragraphs (1) to (4) of subsection (c), as calculated in that year; however, in respect of years preceding 2009, the cumulative amount shall be – 0;
"interest rate curve" – the expected interest rates by which the fund's liabilities were calculated in the fund's balance sheet;
"previous interest rate curve", in respect of a particular year – the interest rate curve by which the fund's balance sheet was calculated for the year preceding that year;
"risk-free interest rate", in respect of a particular year – the interest rate for that year according to the previous interest rate curve;
"expected rate of index change", in respect of a particular year – the expected rate of change in the index for that year, by which the fund's balance sheet was calculated for the year preceding that year;
"previous year" – the year preceding the calculation year;
"calculation year" – a particular year, commencing in 2009;
"fund's balance sheet result", in respect of a particular year – actuarial surplus, actuarial deficit or actuarial balance, as determined in the fund's balance sheet for that year, where the value of the marketable assets is calculated in accordance with the provisions regarding the calculation of the value of an asset under section 33 of the Provident Funds Supervision Law;
"fund's balance sheet result according to the interest rate curve" – the fund's balance sheet result where the value of the liabilities and the value of assets that are not marketable assets are calculated in accordance with the interest rate curve;
"fund's balance sheet result according to an interest rate of 4%" – the fund's balance sheet result where the value of the liabilities and the value of assets that are not marketable assets are calculated in accordance with an interest rate of 4%;
"Amendment No. 33" – the Financial Services Supervision Law (Insurance) (Amendment No. 33), 5777-2017.
Need to cite this law in a foreign court?
Eli Shimony Israeli Attorneys-at-Law provides certified Expert Legal Opinions on Israeli law within 24–48 hours, accepted by courts worldwide.
Contact Us →Read the entire law on one page — continuous text, no page breaks, plus PDF downloads.