The MFSA is proposing to amend the Insurance Business (Assets and Liabilities) Regulations 2007 (“the Assets and Liabilities Regulations”) to change the manner in which the equity yield for variable interest is calculated.

It is being recommended that Regulation 68(6) of the Assets and Liabilities Regulations be revised to allow authorised companies to calculate the equity yield as the value of the dividend yield, in situations where the dividend yield is higher than the earnings yield. In the event that the dividend yield is lower than the earnings yield, the equity yield shall be calculated as 50% of the sum of the dividend yield and the earnings yield.

These amendments are intended to rectify the current methodology established in Regulation 68(6) which does not allow authorised companies any credit for investing in equity shares where the dividend yield is zero.

Interested parties are instructed to send their comments to the MFSA’s Insurance and Pensions Supervision Unit by email on by not later than 14 February, 2014.

The MFSA’s proposed amendments can be accessed by clicking here.