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?
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. No. The Peak 2 calculation is only performed for with-profits funds. Best wishes Mark
