UK regulator outlines wish list for Solvency II review

Risk margin “highly pro-cyclical” and ultimate forward rate “completely unrealistic”, says financial policy director

The PRA has several criticisms of Solvency II. Photo: Shutterstock/Gustavo Frazao

The UK’s Prudential Regulation Authority (PRA) has criticised key aspects of Solvency II, including the ultimate forward rate (UFR) at 4.2%, the dynamic version of the volatility adjustmen