Chancellor announces plans for Solvency II reforms

Written by Michael Griffiths

17/11/2022

The Chancellor has announced new plans to reform the regulations around Solvency II rules.

In his Autumn Statement today, Jeremy Hunt said the move will be part of a bid to unlock “tens of billions of pounds” of investment from the UK’s insurers.

The Treasury has also stated that these reforms would “slash red tape left over from the EU” and “maintain high standards of customer protection”.

Responding to Hunt’s fiscal statement in the House of Commons, a spokesperson from the Bank of England said: “The Prudential Regulation Authority supports the government's goal of promoting growth and productive investment, and has a primary duty to protect insurance policyholders.

“Following the government’s announcements today about its plans to legislate reforms to Solvency II, the key decisions will now be for Parliament and we will implement those decisions faithfully.”

The Association of British Insurers (ABI) has welcomed the changes to the Solvency II regime. Director general at the ABI, Hannah Gurga, said they will allow the UK insurance and long-term savings sector to play an “even greater role” in supporting the levelling up agenda and the transition to Net Zero.

She added: “Meaningful reform of the rules creates the potential for the industry to invest over £100bn in the next 10 years in productive finance, such as UK social infrastructure and green energy supply, whilst ensuring very high levels of protection for policyholders remain in place.

“More broadly, it will encourage a thriving and competitive industry which will ultimately benefit the UK economy, the environment and customers. This meets the objectives that HM Treasury set out to achieve and which the industry has supported throughout.”

Related Articles