Hi
1. Stat reserves (best estimate assumptions plus margins) = BEL + VIF. Firms expect the amount calculated as BEL to be sufficient to pay claims and expenses on their central scenario. This will leave VIF as profit.
2. BEL = Reserves (best estimte) and VIF = profits so the two are not the same. In Solvency 2, firms take credit for VIF implicitly by being able to hold BEL directly on the balance sheet (so it's a presentational thing to increase transparency among others).
3. Under Solvency II the reserves are market consistent and there are no prudential margins held (whilst firms are required to hold a risk margin this is to get the reserves to a market consistent level & therefore serves a different purpose compared to the current Solvency 1 Peak 1 regime).
4. Ref your original question, different insurers are adopting various approaches. Some may stop producing EV disclosures when S2 kicks in (I'm aware of one firm who has indicated this). I suspect once IFRS Phase II finally kicks it, the need to produce EV results will stop altogether as it is designed to more accurately value long-term insurance business compared to current accounting rules, which doesn't but those in reporting may have more insight
Last edited: Dec 10, 2014