(4)Current prudential calibrations ensure a high level of policyholder protection and contribute significantly to financial stability. However, those calibrations can also be overly conservative, limiting insurers’ capacity to engage in long-term investments. To address that issue, the prudential framework should be revised to remove unjustified layers of prudence. While such revisions may result in higher own funds in excess of the solvency capital requirements, insurance and reinsurance undertakings are expected to support the Union’s broader policy objectives, by directing additional capital towards productive investments in the real economy.