Insurers to repackage assets for matching adjustment

Firms consider structured options for assets to meet Solvency II criteria

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As the finer details of Solvency II become more clear, insurers are puzzling over what to do about parts of the regulation where the final rules fall short of what they hoped for. One such area is the matching adjustment, a rule that allows insurers to discount liabilities more favourably if they hold assets that match directly with corresponding liabilities. The adjustment is one of several amendments to Solvency II that have been strongly contested by insurers over several years, right up u