Two more insurers, Standard Life and Friends Provident have taken up the industry regulator's, Financial Services Authority (FSA), offer to apply for solvency waivers.
In simple terms, financial advisers, banks and insurers are required to maintain a minimum of assets in excess of liabilities i.e. they are solvent. There are limits that are not allowed to be breached.
However, give the poor investment climate over the last few years, companies have seen their assets fall putting them in danger of breaching the capital adequacy tests and risking suspension from trading.
The FSA held out an olive branch to insurers by suggesting that they apply for a solvency waiver.
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