FSA removes super-equivalence in life requirements

A new consultation paper proposing changes to the reserving and capital requirements of life insurers is due to be published in September in response to concerns that the regulator has been too prudent. Outlining the changes in its August Handbook, the Financial Services Authority (FSA) said it has identified areas of super-equivalence that “may no longer be justified in our Pillar I requirements”. The FSA is proposing to adjust the regime, which currently requires life insurers to hold capital reserves to cover future administrative expenses, to: