• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Realistic basis firm

C

claire3000006

Member
Wouldn't all companies with tiny amounts of with profits opt to be realistic basis firms because then they wouldn't have to have an RCR? Are you allowed to opt to be realistic if you have no with profits?
 
Wouldn't all companies with tiny amounts of with profits opt to be realistic basis firms because then they wouldn't have to have an RCR?
Click to expand...

Probably not. Its a lot of extra work to calculate Peak 2. So the cost of the extra calculations would probably outweigh any reduction in required capital for many small firms.

It's not clear whether realistic basis firms have lower capital requirements anyway. On Peak 1 they don't need an RCR but may need a WPICC (derived from Peak 2). On Peak 2 they have to hold the asset share to cover the with-profits benefit reserve, then they have the future policy related liabilities and RCM on top of that.

Are you allowed to opt to be realistic if you have no with profits?
Click to expand...

No. The Peak 2 calculation is only performed for with-profits funds.

Best wishes

Mark
 
You must log in or register to reply here.
Back
Top