The UK’s decision to leave the EU – what might it mean for Solvency II?
Whatever happens following the UK’s decision to leave the EU, Solvency II equivalence will likely be desirable for the UK.
Clearly, the big news is the UK ‘Brexit’ vote and the subsequent market volatility, fall-out and long period of political limbo that we are likely to endure as the UK and EU political institutions work out what to do next and jostle for position. As far as Solvency II is concerned, there is a feeling that, whatever happens in the UK, the PRA is likely to retain the key features of the legislation, having helped design and implement it. Moreover, Solvency II equivalence will likely be desirable for the UK. Therefore, there is no reason to expect Brexit to fundamentally change the way that European insurers, and their asset managers, view and implement asset solutions. It might, however, raise concerns that insurers will hold off making investment decisions as they wait for greater certainty and for market volatility to subside.