(Reuters) – Britain’s Treasury said on Thursday the first round of post-Brexit reforms to Solvency II capital rules for insurers, which it hopes will unlock billions of pounds to boost growth, will be implemented by the end of this year.
The original rules were put in place when Britain was part of the EU and reforming them to reap a “Brexit dividend” has become a test of how far Britain is willing to go to help the City of London remain globally competitive after Brexit.
The government and the Bank of England had clashed over how far to ease the rules, and the industry has repeatedly called for the changes to be implemented quickly.
“The government expects that the reform of the risk margin will be in force in the legislation by the end of 2023,”
; the ministry said in a statement.The risk margin refers to the potential cost to a failed insurer of transferring its policies to a third party to avoid disruption to customers.
Parliament finalizes a new Financial Services Bill to amend rules inherited from the EU, giving the ministry and regulators powers to make changes.
To speed up the reform, the ministry on Thursday published draft measures to make the actual changes to Solvency II, once the new financial services bill is on the statute book.
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