Insurers welcome Brexit reforms to Solvency II rules

CHRIS DORRELL

INSURERS have welcomed proposals released last week detailing potential postBrexit reforms to the EU’s Solvency II regime.

The EU’s Solvency II regime imposed rules on how much capital insurers had to hold and where it could be invested. Plans to reform the regime were announced last year and are designed to unlock billions in capital from the balance sheets of insurance companies to invest in core UK infrastructure.

The industry got its first glimpse of the possible changes last week after the PRA put forward its consultation on how the rules could be changed.

Among the proposals were plans to move towards a more principles-based system for assessing firms’ internal models, taking away some of the more onerous requirements that firms must meet. Firms will also be given greater flexibility in how they calculate capital requirements.

The proposed changes were welcomed, with many in the sector saying they could help spur a new wave of investment in UK infrastructure.

“This is another important step towards introducing Solvency UK and enabling our sector to play an even greater role in supporting investment in UK green infrastructure,” the Associated of British Insurers said.

Similarly, a Phoenix Group spokesperson said the reforms were “critical in enabling significantly more investment in productive assets in the future”.

“If the reforms are implemented in the right manner and we are given access to transformative investment projects that offer an attractive returns profile in the long term, Phoenix Group could invest up to £40bn in sustainable and/or productive assets to support economic growth, levelling up and the climate change agenda,” they continued.

KPMG UK insurance partner Huw Evans said the proposals appear “sensible” and that they maintained “a robust risk-based capital framework consistent with our European neighbours andinternational best practice.”

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Sadiq Khan to face High Court showdown over ULEZ policy

GUY TAYLOR AND JESSICA FRANK-KEYES

SADIQ KHAN faces a High Court showdown this week over his plans to expand the Ultra Low Emission zone to most of Greater London by the end of the summer.

A coalition of conservative-led councils opposed to ULEZ claim that the mayor has acted unlawfully while attempting to expand the controversial scheme.

The court hearing, which will take place on Tuesday and Wednesday, marks a pivotal moment in Khan’s term as he looks to defend the future of one of his most controversial, yet defining policies.

The Tory borough's — consisting of Bexley, Bromley, Harrow, Hillingdon and Surrey — have all vehemently pushed back against the proposals to widen ULEZ to most of Greater London from 29 August, with the councils launching a legal challenge in February.