FSA plans will push with profits further into bonds

asset allocation

The regulator is to restrict circumstances in which life offices can apply MVRs

With-profits funds will be forced into holding a higher proportion of non-equity assets under FSA proposals for setting target ranges for maturity payouts. While the regulator recognises this could potentially reduce overall returns to policyholders, it states this would be in exchange for less volatile assets in with-profits funds and an increased likelihood of policyholders receiving consistent payouts. The proposals, set out in the FSA's Consultation Paper 207, call for firms to set publicly available target ranges for payouts and smoothing. With specific targets to meet, many firms a...