Recital 46

Directive (EU) 2025/2 of the European Parliament and of the Council of 27 November 2024 amending Directive 2009/138/EC as regards proportionality, quality of supervision, reporting, long-term guarantee measures, macro-prudential tools, sustainability risks and group and cross-border supervision, and amending Directives 2002/87/EC and 2013/34/EU (Text with EEA relevance) · European Union

(46) Where an insurance or reinsurance undertaking invests in debt instruments which have a better credit quality than the debt instruments contained in the representative portfolio for the calculation of the volatility adjustment, the volatility adjustment might overcompensate the loss of own funds caused by widening bond spreads and might lead to undue volatility in the own funds. With the objective of offsetting the artificial volatility caused by such overcompensations, insurance and reinsurance undertakings should be able to apply, in such cases, for a modification of the volatility adjustment that takes into account information on the undertaking’s specific investments in debt instruments.

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Source: EUR-Lex (Cellar) · retrieved 2026-10-14 · Text as adopted (Official Journal); later amendments are not incorporated in this text.