Hello,
In the question it said that "If the impact of the matching / volatility adjustment under Solvency II is the same as the liquidity premium under MCEV, then there will be no emergence of future profits (or losses)."
My question is why would it matter? If i want to see the EV in SII why would I care if the MA is different to illiquidity premium?
In the question it said that "If the impact of the matching / volatility adjustment under Solvency II is the same as the liquidity premium under MCEV, then there will be no emergence of future profits (or losses)."
My question is why would it matter? If i want to see the EV in SII why would I care if the MA is different to illiquidity premium?