BoE speaks on Solvency II reform

Andrew Bailey, Governor of the Bank of England, today gave a speech on the opportunity to reform Solvency II post-Brexit.

He focused on what he identified to be the key foundations of public policy in prudential insurance regulation: the safety and soundness of insurers and the protection of policyholders. In particular, he discussed the need to balance relevant objectives, and the apparent tensions that may arise in doing so.

He spoke of the ongoing review of Solvency II, and the reforms that the PRA is considering in relation to the Risk Margin and the Matching Adjustment. He assured that both the PRA and HM Treasury are working intensely on these issues, and will engage with the industry to provide solutions which align with statutory objectives.

He concluded by stating that resolving the present cumbersome nature of Solvency II should be a common objective in the reform.