Solvency requirement

Solvency requirement
On transition to Solvency II, the principal change compared with the previous rules is the calculation of SCR (solvency capital requirement). In addition, a profit margin must be included in the calculation of capital base.

By profit margin is meant a component of the value of an insurance or investment contract representing the present value of the company's future profit on the contract.

The value is recognised in the income statement as the company provides insurance cover and any other benefits under the contract. The increase in the capital base is partially matched by an increased solvency capital requirement.  

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Pensions and insurance
Your pension scheme is not only about pension savings, but also insurance for you and your family.

Pensions and insurance