The Association of British Insurers (ABI) is urging regulators to refine, rather than replace, Solvency II to make it more of a fit for the UK market and customers post-Brexit.
According to the industry body, there is no appetite from its members to withdraw from or completely replace Solvency II.
Instead of crafting new capital rules for insurers, the ABI said it is better to adopt the Solvency II text into UK law so that companies would not get stuck in regulatory limbo.
The ABI said the government should retain the EU regulation and introduce some amendments that would help customers, support infrastructure investment and ensure the UK’s status as a global insurance hub.
These include the removal of long-term investment barriers and changes to rules on risk margin and reporting requirements.
“Solvency II has been part of the UK regulatory landscape and on UK insurers’ radars for almost a decade,” said Hugh Savill, ABI’s director of regulation.
“Dismantling this regulation so soon after implementation means considerable time and money spent would have been wasted,” Savill added, in response to a parliamentary committee investigation into Solvency II.
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