1)Say for example, selling a block of business will increase free assets if the receiving insurer is prepared to pay the insurer a cash sum for the profits it expects to make on that business. Will this cash sum be a proportion of profits expected to be made in the future? Will this cash sum be added to the assets or free assets? 2)Is the market consistent interest rate always a risk-free rate? 3)Generally, will insurers liabilities go up or down when markets are down? Please explain.
