UK Government overhauls Solvency II

HMT published Review of Solvency II: Consultation – Response on 17 November 2022 setting out the Government’s final reform package and the plans for implementing changes to the UK’s prudential regime for insurers. The Government states that it will legislate as necessary to implement the new Solvency regime. The changes to Solvency II relate to: risk margin (RM); matching adjustment (MA); increasing investment flexibility; and reducing reporting and administrative burdens. The Government expects that the package of reforms will enable insurers to increase investment in long-term productive assets and ensure that the UK maintains an internationally competitive insurance sector without compromising policyholder protection.

Download this At a glance to see our summary of HMT’s proposals and what this means for firms.