The Bank of England (BoE) is proposing a raft of measures that will make the raft of EU requirements of insurers less onerous, starting with a consultation paper published today.
The BoE’s Prudential Regulation Authority (PRA), which oversees insurers, published the paper today and aims to reduce the amount of regulatory reporting that firms must undertake under Solvency II, which came into effect a couple of years ago.
“In this consultation paper (CP), the Prudential Regulation Authority (PRA) proposes a number of regulatory reporting changes designed to reduce the burden for Solvency II firms and mutuals whilst maintaining the PRA’s ability to meet its statutory objectives and to supervise firms,” says the PRA.
The consultation will run until April.
The move seems designed to ease trading conditions for insurers, especially smaller ones with liabilities of less than £500m.
Move comes in response to Brexit
It can be seen as part of the ongoing Brexit negotiations, with insurers – backed by the Treasury select committee – arguing for such an easing of responsibilities under Solvency II.
Last November, governor of the BoE Mark Carney, pictured above, said “There are things we don’t think are necessary – there are areas we would make changes but within the context of maintaining the overall levels of resilience.”
Welcoming the publication of the consultation paper, Steven Findlay, head of prudential regulation at the Association of British Insurers, said: “We estimate Solvency II has resulted in the reporting burden on UK insurers increasing by between four and eight times.
“Today’s move by the PRA proposing some reductions to this is another step in the right direction and will be particularly helpful to smaller firms in easing this disproportionate burden they are facing.
“These changes are part of a broader set of reforms that the UK insurance industry has proposed and the Treasury Select Committee recently endorsed.
“There still remains plenty of opportunity for the PRA to go further to ensure our insurance industry is able to fulfil a vital role in helping Britain thrive post-Brexit.”