Final Report on revised Guidelines on valuation of technical provisions - Solvency II Review

The Solvency II review introduces an exponential and time-dependent element (the so-called “lambda factor”) into the calculation of the risk margin to better account for the time dependency of risks and reduce both the amount of the risk margin for long-term liabilities and its sensitivity to interest rate changes. As the introduction of the lambda factor directly affects the existing Guidelines on the valuation of technical provisions, these have been updated to reflect the use of the lambda factor in the calculation of the risk margin.

The amended Guidelines will become applicable on 30 January 2027. Until then, the Guidelines on the risk margin set out in the revised Guidelines on valuation of technical provisions issued in 2022 are applicable.