UPDATE: Ceiops task force OKs liquidity premium

An industry task force appointed by the Committee of European Insurers and Occupational Pensions Supervisors (Ceiops) has recommended to the European Commission that an extra liquidity premium be included in the discount rate of liabilities used in the implementation of Solvency II.

As exclusively revealed by Life & Pension Risk last week, the task force has concluded that "most life insurance liabilities can be considered to be at least partially illiquid" and recommended an additional amount be added to the risk-free rate when computing the corresponding technical provisions.

This additional premium is to be "calculated and published by a central EU institution with the same frequency and according to the same procedures as the basic risk-free interest rate", according to

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