Royal London claims the new realistic reporting regime, which it says caused Standard Life's woes, has confirmed its own financial strength.
The mutual says it has a realistic surplus of £1bn. This compares with Standard Life, whose annual results showed it has £4.6bn in surplus capital.
Standard Life has £31bn in its with-profits fund and 2.2 million UK WP policyholders compared with Royal London which has £12bn in its WP fund and an estimated 2.5 million WP policyholders.
Royal London has a risk capital margin cover of 5.6 times, a fund for future appropriations of £2.3bn and free assets, based on statutory valuation, of £1.4bn.
Its free-asset ratio, based on statutory valuation, is 7.8 per cent while its WP free-asset ratio is 13.7 per cent.
Royal London says its free-asset ratio is almost identical to its 2002 ratio of 7.9 per cent. However, in reality it is a considerably stronger measure because the group has significantly reduced the value of the implicit term which is permitted by the FSA's waiver in the statutory valuation.
Group chief executive Mike Yardley says: “We have been supportive of the FSA's determination to improve transparency of life company financial strength through introducing realistic reporting. We are satisfied that the new methodology confirms the financial strength of the Royal London Group and its main IFA businesses, Scottish Life and Bright Grey.
“The realistic balance sheet is an improvement on previous methods of measuring financial strength, the results of which could easily be misunderstood or misrepresented. There should be fewer doubts about the strength of life companies in the future, which is something that everyone should welcome.”