Question 7iii of ST2 Septemeber 2009 compares embedded value assumptions against assumptions used to calculate statutory reserves. 1. I assume statutory reserves in the UK mean solvency II reserves, specifically the best estimate liability? It says "It is likely that supervisory reserves will not allow for any assumptions regarding lapses, going paid up or surrenders, unless to do so would increase reserves". 2. Is this true about Solvency II - so we can't use lapse assumptions if this would lower the reserves?