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Term Definition Legal instruments

volatility adjustment

31/12/2020

The changes to this defined term are effective from 23:00 on 31/12/2020.

means the adjustment to the relevant risk-free interest rate term structure to calculate the best estimate in accordance with:

(1) the Solvency II Regulations adopted under Article 86(1)(j) of the Solvency II Directive; and

(2) for the purposes of calculating technical provisions as at a point in time falling before IP completion day, in accordance with the relevant technical information made by EIOPA under Article 77e(1)(c) of the Solvency II Directive and adopted in Solvency II Regulations under Article 77e(2) of the Solvency II Directive; or

(3) for the purposes of calculating technical provisions as at a point in time on or after IP completion day, in accordance with the relevant technical information published by the PRA in accordance with regulation 4B(1) of the Solvency 2 Regulations.