UK Government Seeks to Speed Up Post-Brexit Insurance Reforms

The UK government is in talks to speed the implementation of a flagship insurance reform to release £100 billion ($121 billion) of capital for investment, after months of clashes over the plans and frustration about the slow pace of change.

The Treasury is in active discussions with the Prudential Regulation Authority and insurers for ways to hasten the process, a person familiar with the matter said, asking not to be identified discussing ongoing talks.

Officials could look to implement the Solvency II reforms in two stages, the Financial Times, which first reported the news, said. Insurers could be allowed to swap bonds they have to hold currently for assets such as green technology or housing at first, with other changes such as reporting requirements implemented more slowly, the Financial Times reported, citing unnamed people familiar with the matter.

UK Insurers Fear That Promised Brexit Capital Reforms Will Be Derailed

Andrew Griffith, the City Minister, has made reform of the European Union’s Solvency II insurance rules a key part of the government’s City reforms agenda. But the topic has been the subject of long-running disagreement between ministers and regulators over how far to go.

Insurance firms have fretted over how significant the changes will be and how long they will take to implement. The Association of British Insurers has estimated Solvency II reforms could free up £100 billion over a decade for investment.

Photograph: The headquarters of HM Treasury in the Westminster district of London, UK, on Tuesday, Jan. 24, 2023. The UK tax system allows people to use their pension pots to avoid inheritance tax and should be changed to allow the government to collect more tax, a think tank has said. Photo: Hollie Adams/Bloomberg

Related:

• Bank of England Worried New Insurance Capital Rules Could Risk Policyholder Bailout
• UK Insurers, Banks Hope for Substantive Financial Services Reforms in 2023
• UK’s Post-Brexit Financial Services Reforms Fall Short of Promised ‘Big Bang’
• Making London’s Financial Center a ‘Wild West’ Would Be Self-Defeating: BoE’s Woods
• UK Lawmakers Warn About Watering Down Post-Brexit Financial Regulation

Topics Europe