Among the changes outlined in CP 195 published today, the FSA proposes to require life companies to ...
Among the changes outlined in CP 195 published today, the FSA proposes to require life companies to report their "realistic with profits position" and to have their calculations of "realistic with profits reserves and capital" audited.
Both proposals are likely to be welcomed by consumer groups pressuring for more transparency of with profits calculations affecting annual and terminal bonus rates.
Life companies will also have to deal with two new reporting forms, which comprise a "realistic balance sheet and a schedule that sets out the calculation of the with profits capital requirement".
Implementing the new forms will force companies to provide "clear indication of the realistic solvency position of a with profits fund, including the effect of any financial engineering on that fund."
The forms will be required as part of companies' annual reporting package and will be publicly disclosed, the FSA proposes.
A half-yearly publication of the forms will also be required, but these will not be publicly disclosed, but instead will "be private" to the FSA.
Industry Voice: Scottish Widows pension expert Robert Cochran and economist Andrew Scott discuss the future of employment and income, in episode three of Scottish Widows' podcast series.
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