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FSA proposes new financial rules for life insurers.

Publication: M2 Presswire
Publication Date: 29-AUG-03 		Format: Online - approximately 1004 words
Delivery: Immediate Online Access

Article Excerpt
M2 PRESSWIRE-29 August 2003-UK Government: FSA proposes new financial rules for life insurers(C)1994-2003 M2 COMMUNICATIONS LTD

RDATE:08292003

The Financial Services Authority (FSA) has today proposed new rules to determine how much capital should be held by life insurers. These rules will link the capital requirements for with-profits insurers more directly to how they smooth the payments they make to their policyholders. Thus the more smoothing takes place the more capital with-profits life insurers will have to hold. This will reduce the pressure on with-profits funds to sell equities when the stock markets fall as the capital requirements will also reduce as a reflection of their ability to adjust discretionary payments downwards.

The new rules would also give the regulator more scope to set higher capital requirements than the minimum levels to reflect any additional risks in the business. In addition the new regime would require all life insurers to...

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