Treasury proposes to cut red tape for insurers

The discussion paper follows concerns raised by insurance groups over a proposed EU directive on insurers’ solvency, known as Solvency II, which they warn should not require companies to hold excessive amounts of capital or make products more expensive for consumers. In their submission to the European Commission, the Treasury and FSA recommend solvency requirements should be applied at group level rather than to each individual subsidiary. The paper says Solvency II should incentivise insurers to diversify risks at the level of an individual insurance company, but points out many major...