Matching adjustment: A theoretical solution?

European policymakers depict the matching adjustment as the most important change to the Solvency II framework as first described in the Solvency II Directive of 2009. Although the concept of the matching adjustment is well invented, there are serious questions about its user-friendliness and applicability. This article gives insight into the concept and calculation methodology of the adjustment as well as some drawbacks. The article was published in the November 2014 edition of “Bank- en Financiewezen” / “Revue bancaire et financière.”