(46)Where an insurance or reinsurance undertaking invests in debt instruments which have a better credit quality than the debt instruments contained in the representative portfolio for the calculation of the volatility adjustment, the volatility adjustment might overcompensate the loss of own funds caused by widening bond spreads and might lead to undue volatility in the own funds. With the objective of offsetting the artificial volatility caused by such overcompensations, insurance and reinsurance undertakings should be able to apply, in such cases, for a modification of the volatility adjustment that takes into account information on the undertaking’s specific investments in debt instruments.