Valuation

1.1

Unless otherwise stated, this Part applies to:

1. (1) a UK Solvency II firm;
2. (2) in accordance with Insurance General Application 3, the Society; and
3. (3) in accordance with Insurance General Application 3, managing agents.

2.1

A firm must, except where otherwise provided, value:

1. (1) assets at the amount for which they could be exchanged between knowledgeable willing parties in an arm’s length transaction; and
2. (2) liabilities at the amount for which they could be transferred, or settled, between knowledgeable willing parties in an arm’s length transaction.

[Note: Art. 75(1) of the Solvency II Directive]

2.2

For the purposes of 2.1(2) when valuing liabilities no adjustment must be made to take account of the own credit standing of the firm.

[Note: Art. 75(1) of the Solvency II Directive]