Regulation 61 Provision for adverse changes
An insurance company which has or may have (following the exercise of any right by a third party) an obligation under a derivative contract or a contract to which regulation 48(8) applies shall make such provision as shall be sufficient, on prudent assumptions, to allow for the effect of possible adverse changes in—
the current value of the assets or indices of assets to which that contract relates; and
the current value of any assets held by the company,
on the ability of the company to meet its obligations under that contract.
For the purposes of paragraph (1) above, the company shall have regard to—
past volatility in the value of such assets or indices of assets (and in the value of assets or indices of a similar nature); and
the possibility of adverse changes in the volatility of the value of such assets or indices in the future.