The Association of British insurers (ABI) has said that the European Union’s capital rules for insurers should be copied into UK law post-Brexit to avoid “regulatory limbo”.
It said there was no appetite to replace completely the Solvency II capital rules. “Solvency II has been part of the UK regulatory landscape and on UK insurers’ radars for almost a decade,” Hugh Savill, the ABI’s director of regulation, said, adding that “dismantling this regulation so soon after implementation means considerable time and money spent would have been wasted.”
Parliament’s Treasury Select Committee said in September that Brexit created an opportunity to rethink Solvency II, and that it would open an inquiry.
The ABI said the risk margin component of Solvency II should be changed, since it made writing new business unattractive and increased costs for consumers.
The ABI said the Bank of England’s Prudential Regulation Authority had “erred on the side of caution” in implementing parts of Solvency II and this should be “reassessed”.