The capital position of the UK's largest with-profits houses is improving, the FSA has revealed.
Firms' aggregate surplus assets over liabilities, measured on the FSA's "realistic basis", had improved by 16% at the 2004 year-end.
David Strachan, FSA sector leader for insurance, said: "The second half of 2004 saw major progress by the largest firms under our new realistic reporting requirements.
The stronger market conditions have played their part, but this is also an indication of firms getting to grips with the new requirements." The FSA introduced new capital requirements for insurers on 31 December 2004.
These require insurers with with-profits liabilities in excess of £500m to take a more risk-based approach to the calculation of their assets and liabilities.
Under the changes, firms need to reserve for benefits, which are necessary to treat policyholders fairly, but which the firm is not obliged to pay.
According to the regulator, between June 2004 and the 2004 year-end, the realistic working capital of with-profits firms increased 8% to £24.9bn.
Several firms were allowed to include support arrangements in their assets, which took total aggregate realistic working capital to £26.
7bn, some 16% higher than in June 2004.
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