The Bank of England (BoE) has issued a warning that the risk of life insurance business failing under new Solvency II rules would increase by 20% in a given year.
In a letter dated 22 February and addressed to Harriett Baldwin MP, chair of the Treasury Committee, the BoE governor Andrew Bailey outlined the estimated impact on the UK insurance sector of the proposed changes to the Solvency II regime. Focusing on the life insurance sector to represent the risk to the wider insurance market, as "these are the firms most affected by these changes," Bailey outlined that based on BoE estimates there is "a relative increase in the probability of failure of around 20%." Announced by the government in November last year, the proposed reform package inco...
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