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Solvency II Review

HM Treasury is conducting a comprehensive review of Solvency II, the EU-derived prudential regulatory framework for insurers and reinsurers operating in the UK. The review addresses capital requirements, risk transformation, captive insurance, and alignment with international standards including Basel 3.1 and IFRS 17, with draft amendment regulations and consultation on insurer resolution regimes currently in progress.

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Family: Scrutiny and evidence
16 Jun 2022 | Committee report linked

We recommend that there should be a secondary objective for both the Financial Conduct Authority and the Prudential Regulation Authority to promote long-term economic growth. The wording will be crucial: pursuing international competitiveness in the short term is unlikely to lead to economic growth or international competitiveness in the long term if it is achieved by weakening the UK’s strong regulatory standards. Weakening standards could reduce the financial resilience of the UK’s financia...

We recommend that there should be a secondary objective for both the Financial Conduct Authority and the Prudential Regulation Authority to promote long-term economic growth. The wording will be crucial: pursuing international competitiveness in the short term is unlikely to …

▤ View document · ↗ GOV.UK
16 Jun 2022 | Committee report linked

The Treasury should continue to reject any calls for a growth and/or competitiveness objective to become a primary objective. This would increase any pressure on regulators to trade off competitiveness against resilience, and would undermine the regulators’ ability to deliver on their core functions. There is a danger that as memories of the financial crisis fade, its lessons are forgotten.

The Treasury should continue to reject any calls for a growth and/or competitiveness objective to become a primary objective. This would increase any pressure on regulators to trade off competitiveness against resilience, and would undermine the regulators’ ability to deliver …

▤ View document · ↗ GOV.UK
16 Jun 2022 | Committee report linked

In their review of Solvency II, the Treasury and Prudential Regulation Authority (PRA) should aim to secure a robust insurance regulatory regime that adequately captures risk and incentivises investment in infrastructure and business, but one that is also appropriately tailored to the UK market.

In their review of Solvency II, the Treasury and Prudential Regulation Authority (PRA) should aim to secure a robust insurance regulatory regime that adequately captures risk and incentivises investment in infrastructure and business, but one that is also appropriately tailored …

▤ View document · ↗ GOV.UK
16 Jun 2022 | Committee report linked

The Prudential Regulation Authority should consider where there is more that can be done to reduce the advantages from which large banks and insurers benefit through modelling their own capital requirements. The purpose of doing so would be not only to strengthen competition by reducing the barriers faced by smaller or newer firms, but also to assess whether firms modelling their own capital requirements are truly reflecting the levels of risk involved.

The Prudential Regulation Authority should consider where there is more that can be done to reduce the advantages from which large banks and insurers benefit through modelling their own capital requirements. The purpose of doing so would be not only …

▤ View document · ↗ GOV.UK
22 Apr 2021 | Committee report linked

The Treasury should, as part of its review of Solvency II, consider reforms that could improve the funding of sustainable green infrastructure while maintaining the financial stability of insurers.

The Treasury should, as part of its review of Solvency II, consider reforms that could improve the funding of sustainable green infrastructure while maintaining the financial stability of insurers. Type: conclusion | Number: 11 | Paragraph: 84 | Response status: …

▤ View document · ↗ GOV.UK
11 Sep 2020 | Committee report linked

We are concerned about the implications of the pandemic for insurance, given that businesses will need the confidence that insurance cover provides if they are to resume normal activities. (Paragraph 184) 58 Economic impact of coronavirus: the challenges of recovery

We are concerned about the implications of the pandemic for insurance, given that businesses will need the confidence that insurance cover provides if they are to resume normal activities. (Paragraph 184) 58 Economic impact of coronavirus: the challenges of recovery …

▤ View document · ↗ GOV.UK
11 Sep 2020 | Committee report linked

The Treasury should consider whether Government intervention is required to support the insurance industry in finding a solution for pandemic insurance cover; and whether such support would be an effective use of public money. We also recommend that the Treasury investigates whether it needs to mitigate the risk of insolvencies in the insurance sector, should the Court’s ruling find in favour of policyholders.

The Treasury should consider whether Government intervention is required to support the insurance industry in finding a solution for pandemic insurance cover; and whether such support would be an effective use of public money. We also recommend that the Treasury …

▤ View document · ↗ GOV.UK