The introduction of market-based valuation approaches by Solvency II causes some difficulties for insurance companies. This is particularly the case when insurers have provided long-term interest rate guarantees to their customers, while market interest rates are close to zero due to the central bank’s low interest rate policy. A special impact study conducted in 2013 attempts to make the problem situation transparent with regard to consumer protection, solvency, competition and other variables and to propose solutions. – The LTGA’s proposals were partially rejected by insurance industry associations. In particular, they criticized the fact that the high volatility of the solvency ratio (solvency ratio: this is calculated by comparing the solvency capital requirements and the available capital; solvency capital is the capital that the insurance company must hold in order to cover the risks it assumes) was hardly taken into account. – See financialization, life insurance, chasing returns, risk and solvency assessment, company-owned, interest guarantee reserve. – Cf. BaFin Annual Report 2013, p. 119 f. (presentation of the impact study).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/

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