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The main trade body of the sector described the plans of the Bank of England to reduce regulatory reporting requirements of the European Union on insurers as a “step in the right direction.”
Today, the Prudential Regulation Authority (PRA), which supervises insurers and banks, issued a consultation paper setting out its plans to lighten the load under the rules of the Solvency II.
In its consultation, the PRA said that the proposals are said to “reduce the reporting burden for smaller firms.”
However, the plans received just a lukewarm response from the Association of British Insurers (ABI).
Steven Findlay, the head of prudential regulation, said: “Today’s move by the PRA proposing some reductions to this is another step in the right direction and will be particularly helpful to smaller firms in easing this disproportionate burden they are facing.”
The ABI said that regulations of the Solvency II – which stipulate the amount of capital that the insurers of the European Union must hold to protect against insolvency – have increased the burden of reporting on insurers in the United Kingdom by between four and eight times.
In October, an influential parliamentary committee pressed the Bank of England and insurers to look for a common ground to make sure that the sector continues to be competitive after Brexit. The Treasury Select Committee warned that a PRA focus on capital levels could likely throttle competition.
However, the PRA wants the European Union to step in to make adjustments to the capital requirements rather than implementing sweeping unilateral changes.
Findlay said that the proposals of the ABI “are part of a broader set of reforms that the UK insurance industry has proposed and the Treasury Select Committee recently endorsed.”
“There still remains plenty of opportunities for the PRA to go further to ensure our insurance industry is able to fulfil a vital role in helping Britain thrive post-Brexit,” added Findlay.