Life offices are to adopt a more realistic model for building reserves, based on the risks in indivi...
Life offices are to adopt a more realistic model for building reserves, based on the risks in individual funds rather than using a blanket formula. In a consultation paper released last week, the FSA has proposed a more flexible model on which to base reserves, allow ing groups to adjust more easily to changing conditions, such as bear markets, without having to sell underlying assets. At a minimum, groups will have to hold at least 4% of assets over and above their liabilities, based on existing EU requirements. However, the FSA is now proposing groups calculate reserves taking into ...
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