(32)In order to prevent pro-cyclical investment behaviour, insurance and reinsurance undertakings should be allowed to adjust the relevant risk-free interest rate term structure for the calculation of the best estimate of technical provisions to mitigate the effect of exaggerations of bond spreads. Such a volatility adjustment should be based on reference portfolios for the relevant currencies of those undertakings and, where necessary to ensure representativeness, on reference portfolios for national insurance markets. Insurance and reinsurance undertakings should publicly disclose the impact of the volatility adjustment on their financial position to ensure adequate transparency.