|
|
The Treasury Committee, launched an inquiry into Solvency II. The inquiry's finding is intended to supplement the committee's work on the UK's potential future relationship with the EU.
Following past complaints about the costs and compliance burden of Solvency II, the committee will look at the impact of the directive and options open to the UK as it leaves the EU.
Commenting on the inquiry, Andrew Tyrie, member of parliament and chairman of the Treasury Committee, said: "Brexit provides an opportunity for the UK to assume greater control of insurance regulation."
Launching the review, the Treasury Committee noted that the insurance industry has expressed fears that Solvency II imposes substantial costs on the insurance industry. It also said it has heard evidence suggesting that Brexit provides an opportunity to leave the Solvency II arrangement, and that doing so would help insurance companies.
Giving evidence to a past Treasury Committee review of Solvency II, Lord Turnbull, former non-executive director at UK insurer Prudential, suggested that Solvency II disadvantaged UK insurers looking to expand overseas. Sam Woods, chief executive of the Prudential Regulation Authority, also told the Committee that there were elements of Solvency II that he would like changed.
Speaking to AM Best at the Monte Carlo Reinsurance Rendez-Vous de Septembre, Ben Reid, chief executive of the London Market Group, said that achieving regulatory equivalence with Solvency II post Brexit is desired by the London market. He also said that insurers in the London market - which derive around 16% of their £60bn premium from the EU - are clear that they want to see passporting rights maintained.
Also speaking to AM Best, Lloyd's chairman John Nelson said that maintaining access to EU member states through passporting rights was the market's preferred outcome from Brexit negotiations. Some 11% of Lloyd's business comes from the EU, but a chunk of this is reinsurance that would not be affected by Brexit, Mr Nelson said.