In the valuation bases chapter, page 26, it states that statutory reserves are effectively undiscounted. Is this now out of date? As, solvency 2 allows reserve discounting. Also, does the implementation of solvency 2 change how discounting is done for companies act accounts? Or are they still driven by the company acts and SORP?
Solvency II report and SORP report are two different things. One is like a kind of statutory reporting and the other is like a kinda general financial reporting. When the company prepares its annual report, SORP rather than SII will be followed. What's more, IFRS is another guy.
See the bottom of page 10 of Chapter 9, which explains that this discussion applies to pre-2016 accounts. With the implementation of Solvency II, this discussion is redundant. (The Core Reading published by the IFoA was current at the time of writing, ie May 2015. Of course, since the regulatory framework has been evolving very quickly, some of this is necessarily out of date. This is a pain for you but it's pretty unavoidable. The examiners would award marks if you show more up-to-date knowledge in the exam.) I think Amsbam1 answered this question pretty well. (Thanks Amsbam!) What else do you want to know?
My question is does the implementation of solvency 2 change how discounting is done for companies act accounts. I am guessing from your response that the answer is no? I appreciate the difference between statutory and company accounts. My question is if the large overhaul in the way one is calculated (i.e. the statutory accounts) has lead to any change in the guidelines, regulations or legislation controlling how the other (the company accounts) is calculated. I would have guessed that the GAD and the other bodies involved in advising how actuarial elements feed into company accounts would have wanted to keep a consistency with the new international initiative.
Company accounts and statutory accounts are 2 different things. Different legislation applies to each. The new UK GAAP and planned IFRS have a lot of similarities to Solvency II, so no doubt there's a strong influence there. But they're not identical by any means. I'd recommend you keep up to date with IFRS developments in particular. There's loads of useful stuff on the IFRS website. See http://www.ifrs.org/current-project...ance-contracts/Pages/insurance-contracts.aspx.
