No-one in the UK seems to like the Solvency II risk margin, not even the regulator.
The margin, which requires insurers to hold enough capital to pay a third party to take on their liabilities in insolvency, is highly sensitive to interest rates. From January 1, it will add unwanted volatility to insurers' balance sheets. And with rates so low, it presents enough of a problem to firms for the UK's Prudential Regulation Authority (PRA) to voice concerns about its impact.
Insurers are starting to
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