Britain proposes post-Brexit easing of insurer capital rules

div classBodysc17zpet90 cdBBJodivpBy Huw Jonesp

pLONDON Reuters – Britain launched on Thursday a public consultation for a postBrexit relaxation of capital rules for insurers, in a step the government said would increase investments in longterm infrastructure.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pBritain inherited rules known as Solvency II from the European Union, and reforming them is seen by industry and government as a key component in keeping the countrys financial sector globally competitive.p

pThe long flagged proposals include a 6070 reduction in the risk margin for longterm life insurers, a buffer that they hold in case they need to transfer policies to another insurer in a crisis.p

pThe finance ministry said the proposed changes will maintain high protection for policyholders, and help attract new insurers to increase consumer choice.p

p“Our reforms will unlock tens of billions of pounds of investment in the UK economy, spur innovation in the market while protecting policyholders – and will cement the UKs position as a global hub for financial services,” UK financial services minister John Glen said in a statement.p

pThe government also proposed a more sensitive treatment of credit risk in the matching adjustment, which provides incentives for insurers to issue longterm life insurance products by matching them against assets with similar characteristics.p

pThe proposals also make it easier for insurers to invest in longterm assets like infrastructure, and cut reporting requirements, the ministry said.p

pThe EU is also reforming the Solvency II rules and has already made formal proposals which it says will also unlock billions of euros for green investments.p

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pp Reporting by Huw Jones Editing by William Schomberg and John Stonestreetp

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