FSA tightens MVR rules for with-profits

It proposes to remove firms' ability to impose MVRs on the grounds of surrender volumes alone. Instead, an MVR would only be applied where the face value of the policy is higher than the value of the underlying assets. However, the FSA also proposes removing the requirement for the difference in value to be ‘significant' before an MVR can be applied. It says if there is a high volume of surrenders, firms may need to be able to apply an MVR when the asset value is less, but not significantly less, than the face value of policies. Elsewhere in the paper, the FSA proposes streng...