© Reuters. FILE PHOTO: New Chancellor of the Exchequer Jeremy Hunt leaves 10 Downing Street in London, Britain, October 14, 2022. REUTERS/Henry Nicholls
LONDON (Reuters) – Britain’s finance minister Jeremy Hunt announced a plan on Thursday to free up billions of pounds from the capital buffers of insurers to invest in infrastructure, potentially boosting economic growth.
Britain inherited insurance capital rules, known as Solvency II, from the European Union and has faced pressure from industry to ease them following Brexit to keep the sector competitive.
“So to further support investment across our economy, I can also announce we are publishing our decision on Solvency II, which will unlock tens of billions of pounds of investment for our growth-enhancing industries,” Hunt said in a fiscal statement in parliament.
By the end of next year, Britain would also use its “Brexit freedoms” to write its own rules to review and decide changes to EU regulations in five growth industries, including financial services.
The Bank of England’s Prudential Regulation Authority has raised concerns about going too far in easing buffers.
“Following the government’s announcements today about its plans to legislate reforms to Solvency II, the key decisions will now be for Parliament and we will implement those decisions faithfully,” the PRA said in a statement.
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