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Insurance Companies (Assets)

Volume 927: debated on Tuesday 1 March 1977

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asked the Secretary of State for Trade what changes he proposes in the proportion of commercial and domestic property holdings which can be accepted as assets for the purpose of insurance company solvency.

Existing regulations only provide limits, relative to the scale of the business of an insurance company, to the size of individual assets which that company may count towards solvency requirements. I have no plans for changing this.

asked the Secretary of State for Trade if he plans to define the rate of interest which must be employed in the assessment of insurance company assets.

No. Existing regulations under the Insurance Companies Act 1974 require insurance companies' assets to be valued, according to their nature, by reference to their current value on the open market, as a proportion of cost price or as the amount which can reasonably be expected to be recovered. Some assets must be left totally out of account.