Insurers will not find a “soft” treatment from BoE with the enforcement of EU “capital rules”. Nevertheless, the bank will considers ways to make the grounds “easier for new entrants”, whereby boosting industry-wide competition, reported the Deputy Governor, Sam Woods.
The “Prudential Regulation Authority” of BoE also Headed by Woods is looking into ways for easing the “burden of the EU’s Solvency II rules”. BoE has also received heavy criticism from the lawmakers in Britain as it did not ease out on the “EU capital rules” forcing some businesses to migrate overseas in an attempt to “avoid heavy capital charges”.
Although, Woods showed willingness on making “some changes”, he is not going to rush into “any big alterations”. Addressing the Association of British Insurers’ annual conference, Woods said:
“We can tell the difference between feedback about a genuine technical flaw and generalised lobbying for lighter-touch regulation”.
There is a lack of “convincing evidence” which proves that the rules imposed by the EU cost the insurers of Britain their growth or profitability, or even driving up of “premiums for policyholders”. While Woods thinks that implementing the “directive” could be a better alternative. Moreover, Woods emphasised on the possibility of PRA introducing some changes in the enforcement of the “Solvency II rules” instead of “changing the rules themselves”.
Reuters further added:
“Britain is leaving the EU next year, with trading terms uncertain for financial firms who may have to rely on a system of ‘equivalence’ for access to the bloc’s market”.
According to an “insurance regulator” of the EU, bringing a change in the EU rules would put Britain in a harder position to “argue equivalence”.
References:
reuters.com
The “Prudential Regulation Authority” of BoE also Headed by Woods is looking into ways for easing the “burden of the EU’s Solvency II rules”. BoE has also received heavy criticism from the lawmakers in Britain as it did not ease out on the “EU capital rules” forcing some businesses to migrate overseas in an attempt to “avoid heavy capital charges”.
Although, Woods showed willingness on making “some changes”, he is not going to rush into “any big alterations”. Addressing the Association of British Insurers’ annual conference, Woods said:
“We can tell the difference between feedback about a genuine technical flaw and generalised lobbying for lighter-touch regulation”.
There is a lack of “convincing evidence” which proves that the rules imposed by the EU cost the insurers of Britain their growth or profitability, or even driving up of “premiums for policyholders”. While Woods thinks that implementing the “directive” could be a better alternative. Moreover, Woods emphasised on the possibility of PRA introducing some changes in the enforcement of the “Solvency II rules” instead of “changing the rules themselves”.
Reuters further added:
“Britain is leaving the EU next year, with trading terms uncertain for financial firms who may have to rely on a system of ‘equivalence’ for access to the bloc’s market”.
According to an “insurance regulator” of the EU, bringing a change in the EU rules would put Britain in a harder position to “argue equivalence”.
References:
reuters.com
