Hi Lindsay, Can I please clarify the following statements: "...essentially, the VIF is already recognised as part of the net assets on the SII BS. ie the VIF has already been deducted from the liabilities by the use of best estimate assumptions. To include a VIF in the EV as well would be double counting." I thought that if the assumptions are BE in SII, there is no VIF. So the statements are not making sense. There are some exceptions for VIF to exist in SII as per the core reading but it doesn't explain the statements in the X4.2.
"... essentially, the VIF is already recognised as part of the net assets on the SII balance sheet..." is the same as saying that there is no VIF to allow for. Future profits are capitalised into the net assets under SII because the assumptions used for the liabilities are best estimate. So it is just two different ways of saying the same thing.
