The Treasury has announced plans for a review of the Solvency II regime to take place in the autumn.
The move is part of a package of measures for financial services after Brexit, unveiled by Chancellor Rishi Sunak in a Written Ministerial Statement.
Sunak said the review aims to ensure the Solvency II regime is “properly tailored to take account of the structural features of the UK insurance sector”.
The review will consider areas that have been the subject of long-standing discussion while the UK was a member state, some of which may also form part of the EU’s intended review, he added.
These will include, but are not limited to, the risk margin, the matching adjustment, the operation of internal models and reporting requirements for insurers.
“We welcome a revision of Solvency II that will be suited to the British market,” said Association of British Insurers director of regulation Hugh Savill. “Improvements to the Risk Margin are long overdue, and the Matching Adjustment needs to encourage much-needed investment in the British economy in the wake of Covid-19."
The government expects to publish a Call for Evidence in Autumn 2020.