The new regulatory regime is a valid tool for mitigating portfolio risks.
Some provisions were introduced in Solvency II to dampen the impact of interest-rate volatility on insurance companies’ balance sheets, such as those related to the parameters for the extrapolation of risk-free interest rates at very long-term maturities and other measures that are meant to smooth the transition to the new prudential regime; such provisions may also reduce the impact of a prolonged situation of low interest rates.