UK Prime Minister Boris Johnson and Chancellor Rishi Sunak, as part of the government’s response to the country’s economic woes, will reportedly delve into the proposed overhaul of insurance sector regulation in a joint speech this month.
In an opinion piece, The Sun political editor Harry Cole ‘revealed’ that Johnson is planning to make a joint pronouncement with Sunak about addressing the cost-of-living crisis, an escape from which will partly involve the changes in Solvency II requirements.
A European Union directive, Solvency II is a risk-based capital regime, the easing of which in post-Brexit UK will help in freeing up capital.
“[The proposed reforms] will involve a substantial reduction in the risk margin, including a cut of around 60-70% for long-term life insurers,” stated Economic Secretary to the Treasury John Glen in February during the annual dinner of the Association of British Insurers.
“Secondly, there will be a reassessment of the fundamental spread used to calculate the matching adjustment, in order to better reflect its sensitivity to credit risk. Thirdly, we will introduce a significant increase in flexibility to allow more investment in long-term assets such as infrastructure, the hardware which makes economic growth possible.”
The MP also said at the time: “And, fourthly, we want a major cut in the EU-derived regulations which make up the current reporting and administrative burden.”
Meanwhile, no further details were provided in relation to the supposedly imminent June speech.
