BoE creates volatility adjustment ‘stepping stone’ for insurers
Dynamic VA may be used for assets that fail to qualify for matching adjustment, say experts
A proposed change to the way the Bank of England implements the European Union’s Solvency II regime for insurers should boost the use of the volatility adjustment, according to experts. They say the regulator’s acceptance of a dynamic approach to the VA could result in the rule being used as a waiting room for the matching adjustment, which is a more attractive tool but involves a more difficult approval process.
“I think what you may see is [that] where firms struggled to get certain
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