Life insurance: new requirements for calculating reserves
13 August 2021
News
The Bank of Russia proposes to use the market level of interest rates for calculating life insurance reserves. Thus, the approaches to calculating liabilities and assets for this type of insurance will be the same.
Such synchronisation will enable market participants to save on capital formation and use the available funds to develop their business. Besides, the changes will contribute to a more accurate assessment of insurers’ financial stability. Similar approaches are stipulated by the Solvency 2 Directive.
Currently, life insurance reserves are calculated with interest rates of up to 5%, regardless of the market level. The new rules are expected to come into force at the end of this year.
Preview photo: Pavlo Burdyak / Shutterstock / Fotodom