LIFE assurer Legal and General said it remained very strong under a changed accounting regime.

The group said it had 4.7 times the capital it needed to cover its liabilities under the Financial Services Authority's new "realistic" system.

The new regime was introduced to increase the transparency of the insurance sector by showing companies' assets and liabilities in a more realistic way.

The group said that under the new regime, its with-profits fund had liabilities of £960m based on a pessimistic hypothetical scenario, under which the stock market fell by 18 per cent and the value of other investments also dropped.

However, it said it had £4.5bn in surplus capital above what was needed to cover these liabilities, giving it a risk capital margin of 4.7 times.

It added that under the new regime, the with-profits fund had a surplus of £1.03bn.

The group said Legal and General Assurance Society had total assets of £18.61bn on a realistic basis, up from £18.12bn under the former statutory regime.

However, its total liabilities rose slightly under the new system to £17.58bn from £16.19bn previously.