Despite previously denying problems with meeting solvency criteria, Prudential have now admitted they would seek a solvency waiver from the industry regulator, the Financial Services Authority.
Prudential said that asking for the waiver would only be a technical issue, as they want to manage the business on a 'realist' rather than 'statutory' basis.
All insurers must maintain a certain amount of assets over liabilities and many do this by taking into account expected future profits. Prudential has not done this and this is the reason they are asking for the waiver.
Our tip:
Keep a close eye on your with profits policies and make sure you take action if you need to.
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