LONDON (Reuters) -Britain’s finance ministry said on Thursday that the first batch of post-Brexit reforms to ‘Solvency II’ capital rules for insurers, which it hopes will unlock billions of pounds to boost growth, will be implemented by the end of this year.
The original rules were introduced when Britain was part of the European Union, and reforming them to reap a “Brexit dividend” has become a test of how far the UK is willing to go to help the City of London remain globally competitive post-Brexit.
The government and Bank of England had clashed over how far to ease the rules, and industry has repeatedly called for the changes to be implemented speedily.
“The Government expects that reform of the risk margin will be in force in legislation by year end 2023,” the ministry said in a statement.
The risk margin refers to the potential cost for a failing insurer to transfer its policies to a third party to avoid disruption to customers.
Parliament is finalising a new financial services bill to amend rules inherited from the EU, giving the ministry and regulators powers to make changes.
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To help speed up reform, on Thursday the ministry published draft measures to make the actual changes to Solvency II, once the new financial services bill is on the statute book.
“It is considering options to enable reforms to the matching adjustment to come into force by the end of June 2024, and the remainder of the new regime will come into force by year end 2024,” the ministry said.
“The reforms will boost economic growth by delivering a more tailored, clearer and simpler regulatory regime.”
(Reporting by Huw Jones; Editing by Toby Chopra and Christina Fincher)
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