‘Nom De Plume’ writes “I am not sure what the serious error you are referring to in respect of Rothesay’s SCR ratio is. Rothesay’s SFCR contains the very same 41% number. (Page 50)”.
It does indeed contain the very same number. But why would ‘the very same number’ not also be in error? Rothesay say (ibid) that “Without the matching adjustment, the BEL would increase by £7.8bn, although this would be offset by an increase in transitional solvency relief leaving Own Funds £3.0bn lower “. But the present value of transitional relief, which has to be paid back in 10 years, is precisely zero.
Moreover the Independent Expert’s report does not assume any increase in ‘transitional relief’ for Prudential, but rather gives the unadjusted figures, which compounds the error, or should I say deception.
Without the ‘benefit’ of MA, which the Expert in his correspondence with me has acknowledged to be a benefit only to existing shareholders, Rothesay is technically insolvent.