Insurance Companies

Treasury written question – answered at on 2 June 2020.

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Photo of Lord Myners Lord Myners Crossbench

To ask Her Majesty's Government whether they intend to review the effect of deteriorating credit quality on the (1) profits, and (2) capital generated to meet claims, of life insurance companies under the matching adjustment permitted by the Prudential Regulation Authority.

Photo of Lord Agnew of Oulton Lord Agnew of Oulton Minister of State (HM Treasury), Minister of State (Cabinet Office)

Since the onset of the crisis caused by covid-19, the Government has been monitoring any impact of any deteriorating credit quality on the profits and capital generated to meet the claims of life insurance companies closely. We monitor developments in the profitability, liquidity and solvency of insurance companies, including the impact of credit quality on the matching adjustment and any resulting impact on these metrics. The Prudential Regulation Authority continually keeps the operation of the matching adjustment under review.

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