ABI hails EC's 'pragmatic' approach to liquidity premium
The Association of British Insurers (ABI) hails the inclusion of a liquidity premium and grandfathering measures for annuities in the fifth quantitative impact study (QIS5) technical specifications as a "welcome move to a pragmatic approach to Solvency II" by the European Commission.
The liquidity premium will be added to all liabilities resulting from contracts more than one year long, effectively including all life insurance liabilities, with the premium doubling for annuities. The
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