UK firms prep Vif hedging options
Unit-linked providers reviewing ways to maximise benefit of new rules
UK unit-linked providers are looking at ways to maximise the capital benefit of new Solvency II value-in-force (Vif) rules that take effect next year.
Under current UK rules on the treatment of future profits for in-force policies, insurers must invest the full face value of unit-linked policies in units of the linked fund. But changes as part of the directive, which takes effect from January 1, 2016, mean firms can choose to invest part of the money in less capital-intensive assets.
Firms are
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