Hello,
Need help in understanding Q1 part i) risk 'interest rates up'
As BEL for Solvency II SCR is calculated using risk-free rate as prescribed by EIOPA, why would there by any impact on valuation of liabilities?
It is assumed that matching adjustment is applicable for annuity and hence its a well matched portfolio. But, the answer also mentions that 'there should not be a significant impact from annuity business'. Should it not be 'no impact from annuity business'?
MA calculation = spread on matching assets - fundamental spread prescribed by EIOPA. Are we saying that the EIOPA risk free rate will also increase?
Similarly, why will the discount rate for non-unit reserve of unit linked liabilities change?
Please help. Thank you!
Need help in understanding Q1 part i) risk 'interest rates up'
As BEL for Solvency II SCR is calculated using risk-free rate as prescribed by EIOPA, why would there by any impact on valuation of liabilities?
It is assumed that matching adjustment is applicable for annuity and hence its a well matched portfolio. But, the answer also mentions that 'there should not be a significant impact from annuity business'. Should it not be 'no impact from annuity business'?
MA calculation = spread on matching assets - fundamental spread prescribed by EIOPA. Are we saying that the EIOPA risk free rate will also increase?
Similarly, why will the discount rate for non-unit reserve of unit linked liabilities change?
Please help. Thank you!