BoE warns of 20% hike in insurer failure risk from Solvency II reforms
The governor of the Bank of England, Andrew Bailey, has warned that the proposed Solvency II reforms to loosen capital requirements will increase the risk of life insurer failure by 20%.
According to Bailey, pictured, the danger of a life insurer collapsing will rise to 0.6% from 0.5%.
£8bnThe £22bn risk margin was expected to shrink to around £8bn after the reforms
In a letter to Parliament’s Treasury Committee, dated 22 February and released 6 March, Bailey set out that the risk margin for the life insurance sector was £22bn, and this was expected to shrink to around £8bn after the reforms.
Risk marginThe risk margin is an additional capital buffer held by
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