15. For regulation 61 of the 1994 Regulations (provision for adverse changes), substitute—
61.—(1) An insurance company which has or may have (following the exercise of any right by the company or any other party) an obligation to deliver assets or make a payment shall—
(a)at all times identify the assets held by it which it considers to be the most suitable to cover such obligation; and
(b)make prudent provision for the effect on the amount of its excess assets of adverse variations between the value of the assets identified and the value of the assets which it is or may be obliged to deliver or the amount of the payment which it is or may be obliged to make.
(2) For the purposes of paragraph (1) above the company shall take into account all reasonably foreseeable adverse variations and shall have particular regard to past volatility in the value of the assets concerned (or assets of a similar nature) and the possibility of adverse changes in such volatility in the future.
(3) For the purposes of this regulation, “the amount of its excess assets” means the difference between the aggregate value of its assets, determined in accordance with Part VIII of these Regulations, and the amount of its liabilities, other than liabilities determined in accordance with this regulation.”