CEA Note on Solvency II - Cost of Capital

21 April 2006

The CEA issued a document on Solvency II – Cost of Capital which describes potential differences between the economic framework supported by the CEA and CEIOPS and highlight certain issues and potential misconceptions. The note also explains the reasons why the CEA believes the cost of capital approach is coherent and consistent with our intended framework, and how in practice a cost of capital approach could be used in a simple way under a standard approach like the European Standard Approach proposed by the CEA.

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