Lower UFR would be dangerously pro-cyclical – Bafin

Solvency II rate cut would crowd insurers into long-dated assets, says insurance chief

Frank Grund would prefer to see the UFR unchanged

German financial regulator Bafin's insurance chief has criticised a proposal from regulators to lower the Solvency II ultimate forward rate (UFR), saying the pro-cyclical effects of a change would be a "major" concern.

The European Insurance and Occupational Pensions Authority (Eiopa) has proposed cutting the UFR, which insurers use to construct liability discount curves under the directive, from 4.2% to 3.7%.

Frank Grund, chief executive director of insurance and pension funds at Bafin in

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