EU policymakers clash over valuing insurers' liabilities
Thursday, 09 01 2016, Category: Insurance and Reinsurance, Country: Europe
European Union policymakers clashed on Wednesday over whether to cut a benchmark used by insurers to value billions of euros in liabilities to better reflect very low central bank interest rates.
New "Solvency II" rules for insurers in the 28-country bloc were introduced in January and include an "ultimate forward rate" or UFR, an interest rate for discounting liabilities which go out more than 20 years.
It was set at 4.2 percent, reflecting interest rate expectations in 2010, before the financial crisis prompted central banks to slash rates to negative territory in some cases.