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June 28, 2022

UK plans to proceed quickly with insurance regulatory reforms

The UK Chancellor of the Exchequer Rishi Sunak told industry executives that the government is planning to proceed ‘at pace’ with the insurance regulatory reforms.

The Chancellor and Economic Secretary John Glen met with senior executive from the insurance industry as part of the government’s ongoing consultation process on post-Brexit reforms to Solvency II insurance regulations.

Later, a government statement said that Sunak discussed the government’s three key objectives for the reforms with the executives.

The objectives are to support the development of an internationally competitive insurance market in the UK, ensure stability of firms, protect policy holders, and encourage the insurance firms to invest in long-term capital to spur growth.

Notably, the Solvency II rules are the regulatory requirements for insurance firms within the EU. Despite leaving the EU, the UK continued with the Solvency II rules.

The proposed changes to the rules will seek to reduce red tape and unlock investment in the sector.

“The Chancellor valued the perspective of industry, and their input will inform the government’s final package of reform.

“He also made clear that also that the aim is to deliver these ambitious reforms at pace, with our consultation closing on Thursday 21st July – but noted that they are complex in nature and the importance of getting these changes right,” the government statement said.

The Bank of England’s Prudential Regulation Authority will also publish a more detailed consultation on the proposed changes later this year.

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