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Twin Peaks Approach
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Background
The Interim Prudential Sourcebook policy paper PS04/16 was released during July 2004 by the FSA in the UK as a near final text version. This paper had the main policy for life insurers included, much of which was due for implementation on the 1st Jan 2005. Key to this paper was the rules and guidance for the Twin Peaks method of calculating financial reserves for insurers.
The twin peaks approach links provisioning and capital requirements more directly to how bonus payments are made to policyholders in practice.
The twin peaks approach provides a useful benchmark for the assessment of financial resources required to support with-profits business and a degree of standardization between firms.
The framework requires a firm to self-assess capital appropriate to its individual risk profile, as a complement to the minimum capital requirements for with-profits business (in the twin peaks approach) and other life business.
The initial consultation paper was called CP195 and this was developed and released as the Policy Paper PS04/16.
Please use the sub sections links on the left or the content links to find out more about Twin Peaks Approach.
Content
- CP195 Consultation Paper
- Twin Peaks approach for IPSB
- Is Lloyds a part of the Prudential Source Book
- Prudential Sourcebook CP195 Background