Economic downturn perhaps? People would be coming in for their surrender values. Maybe also negative perception of the company/increased probability of insolvency?
About insolvency possibility, isn't the purpose of SII regulations to ensure company are not insolvent ?
Hi, yes the objective of Solvency 2 is to ensure a company doesn't go into insolvency as it aims to provide adequate protection for policyholders. But if a company is showing poor solvency ratios (or even breaching its SCR) and possibly there are market concerns that it may soon breach its MCR (say) then I can see how this could potentially lead to a mass lapse.
