The fiscal rules have provided a framework for assessing fiscal policies but have at times proven difficult to enforce and hard to explain to the public. In the area of structural policies, the Country Specific Recommendations have had a limited impact, with less than 10% of recommendations [33] 5 / 10  BIS central bankers' speeches  being substantially implemented each year. [33] The disparity between the outcomes of the two methods does not stem from any difference in the quality of European and national authorities. Instead, it is a consequence of the inherent difference between rules and institutions. There are two reasons why institutions have proven superior. First, rules are generally static and require countries to adhere to specific actions, whereas institutions are required to achieve prescribed objectives. Rules therefore cannot be updated quickly when unforeseen circumstances arise, whereas institutions can be dynamic and employ flexibility in their approaches. That distinction matters hugely when underlying parameters and economic relationships change – as they often do. The distinction also matters for citizens, who ultimately care most about the results of economic policy rather than the actions taken by governments. The ECB’s monetary policy during the crisis is an example of the greater flexibility of action afforded by an institution-based approach. The ECB was faced with a range of challenges that few could have predicted when our mandate was defined. But the Treaty combines our mandate for price stability with discretion over the tools we could use to achieve it.
  A thematic review across a number of smaller Lloyd’s managing agents, to assess how distribution channels are changing. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3    Reviews of underwriting and risks around pricing at a number of motor insurers. For example, we will assess how insurers protect themselves against the risk that under-pricing leads them to take on a large number of policies quickly, particularly through price comparison websites. Life insurance risks and supervisory priorities  In the life sector, the search for yield on Solvency II capital is taking insurers in different strategic directions. Some are taking a ‘capital-light’ approach, focused on unit-linked liabilities and asset management. Others are growing their annuity books, particularly by taking on the liabilities of defined-benefit company pension schemes. One of the most direct and notable consequences of Solvency II has been growth in reinsurance of longevity risk. On average, between 2015 and 2016, longevity risk transfer increased by nearly 25% across UK annuity writers. Long-dated insurance risks, such as longevity exposures, attract a high risk margin. We 2  have been clear that we think the Solvency II risk margin is too sensitive to the level of market interest rates . It is therefore too high at current low levels of interest rates, encouraging insurers to transfer longevity risk through reinsurance. The risk margin is our first priority as part of the Solvency II review. We are working in EIOPA to achieve a sensible outcome.