Insurers have applauded Government plans to reform Solvency II rules to make it easier for insurance companies to operate.
The Government says the insurance sector will benefit from post-Brexit freedoms, unlocking billions of pounds in investment by reforming the sector’s regulatory structure, according to the Economic Secretary of the Treasury and City Minister John Glen.
Speaking at the Association of British Insurers annual dinner last night, Glen announced measures to reduce bureaucracy and loosen regulation to boost growth and investment.
The Government says the proposed change to insurance sector regulation will result in a more personalised and dynamic regulatory environment, allowing billions of pounds in infrastructure investment in the UK. The reform will mean that businesses will be able to spend more of their money on investing, developing, and creating jobs. The Government also says policyholder protection will remain a key priority.
Solvency II was introduced in 2016 and sets out regulatory requirements for insurance firms and groups.
Glen says: “In the simplest terms, leaving the EU means that the UK can now tailor the prudential regulation of insurers to our unique circumstances. Put even more bluntly, regulation developed to reconcile insurance markets for 28 different countries in the European Union never worked well for us. Now we’re outside the EU, this Government is determined to fix that.”
He adds: “The headline ambition is as follows: to replace what is an EU-focused, rules-driven, inflexible and burdensome body of regulation with one that is UK-focused, agile and easily adaptable. A body of regulation which facilitates, not hinders, market developments which encourages the emergence of new types of assets which supports the entry of new and innovative firms and which, importantly, allows the release of meaningful amounts of capital for productive investment.”
Industry leaders have praised the Government’s proposal, calling it a ‘positive outcome’ for the industry.
Phoenix Group CEO Andy Briggs says: “Phoenix is strongly supportive of the package of measures to reform Solvency II that have been announced this evening. The proposed reforms are a positive outcome for the industry, are fully aligned with the Treasury’s stated objectives and represent a unique and very significant opportunity to ensure more private-sector capital can be directed by insurers into long-term infrastructure assets in the UK.
“At the same time, Phoenix will remain fully committed to preserving policyholder protection which is the core priority for us as a business. We look forward to working intensively with the Treasury and PRA in the coming months to finalise and implement the reforms which will enable Phoenix to increase its investment across the UK to support and accelerate the decarbonisation and levelling-up agendas.”