Draft Insurance and Reinsurance Undertakings (Prudential Requirements) (Amendment and Miscellaneous Provisions) Regulations 2024

Alan Mak Excerpts

Tuesday 15th October 2024 General Committees

[Alan Mak (Havant) (Con)]

It is a pleasure to serve under your chairmanship, Mr Dowd. I am pleased to inform the Committee that we intend to support today’s statutory instrument, because it continues the essential reforms to Solvency II started by the previous Conservative Government, as the Minister said, of which I was a member.

The financial services industry employs more than 2 million people in the UK. While two thirds of the workforce operates outside of the south-east, financial services have made London the world’s largest international financial centre. Prudential regulation ensures that insurance firms act safely and reduces the chance of them getting into financial difficulty. It is therefore vital that Solvency II, the framework governing the prudential regulation of insurance firms, reflects the unique structural features of the UK insurance sector. The financial services sector must have the right architecture to provide the best possible security for investors and sufficient capital for businesses.

Following close engagement with industry, the Conservative Government developed detailed plans to reform Solvency II. These reforms were designed to ensure a vibrant and prosperous insurance sector, striking a careful balance between boosting growth and maintaining high standards of policyholder protection. They help ensure the safety and soundness of firms, requiring insurers to hold enough capital to withstand a one in 200-year shock, and could help spur a vibrant, innovative and internationally competitive insurance sector, unlocking £100 billion of productive investment to grow the economy over the next 10 years.

We on the Conservative Benches welcome the Government’s decision to continue our plans to reform Solvency II; we therefore support this statutory instrument and will not divide the Committee.