Economic Secretary to the Treasury John Glen this week set out plans to reform Solvency II, a move he said would unlock “tens of billions of pounds of investment by slashing red tape”.
Speaking at the Association of British Insurers' annual dinner this week, Glen promised the changes would “unlock growth and unleash investment in UK infrastructure”, adding that the plans would “further deliver the benefits of Brexit”.
Jonathan Drake, partner in the insurance team at DWF, said the announcement is one of the first signs that Brexit will be having a significant impact on UK insurers, and life insurers in particular.
“Although being branded as the UK 'slashing red tape' the EU itself is also undertaking a review of a number of the features of Solvency II as EU and UK insurers had previously expressed dissatisfaction with its operation,” he said.
“However UK authorised insurers will soon have the opportunity to take advantage of a revised insurance regulatory regime that should in principle give them advantages over EU authorised insurers, which is a tangible benefit to emerge from a Brexit process that has not been an easy one for the UK insurance sector."
The UK’s insurance sector has been subject to Solvency II since 2016 after the rules were introduced to harmonise insurance regulation across the EU.
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