In February the IFoA responded to two key consultations from the UK Treasury that will be pivotal in setting the future direction of the UK’s financial services as it embarks on a new era outside the European Union.
The first is the much-anticipated review of Solvency II, which is seeking views on how to tailor the UK’s prudential regulatory regime so that it better supports the unique features of the UK insurance sector. The IFoA supports the Treasury’s underpinning objectives in this review, including the need for a regime that fosters innovation and international competitiveness, appropriate policyholder protection, and the facilitation of long-term infrastructure and ‘green’ investment.
However, in our response we note that significant improvements could be made to the current design of the risk margin, the matching adjustment framework and the standard formula solvency capital requirement, all of which could be reformed to better suit the UK insurance market.
The second is the Future Regulatory Framework Review, which presents a once-in-a-generation opportunity to design and shape the regulation of the UK’s world-leading financial services sector so it can remain competitive, innovative and fit for purpose. The IFoA’s response sets out a number of recommendations to futureproof the sector and its customers from current, emerging and future challenges such as climate change, increased risk transfer and the proliferation of digitisation. Our response also considers how best to ensure the wider industry can deliver positive impacts and benefits across the whole of society, over the long term.
Having submitted our responses, we expect to have further engagement with the Treasury as it takes stock of feedback to these two key consultations.
Read our responses in full at bit.ly/3dFiEuG