The U.K. Financial Services Authority is giving relief to insurance companies facing unnecessary selling of equities.

“We recognize that in current unusual market conditions further steps are necessary to avert the need for some insurance companies to sell equities for short-term technical reasons in a way which could be damaging to the interests of their policyholders, says William Hewitson, Head of the Actuary’s Department at the FSA.

“The overall effect of this action is to underline the flexibility that insurance companies and their actuaries have to exercise their own judgement as to the most appropriate investment strategy to adopt for their own particular circumstances.”

But, insurers are still required to take a “prudent view” of the assets they need in excess of their liabilities, says Hewitson.