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

Daisy Cooper Excerpts

Tuesday 15th October 2024 General Committees

[Daisy Cooper (St Albans) (LD)]

It is a pleasure to serve under your chairmanship, Mr Dowd. We Liberal Democrats agree in principle that Solvency II had to be reformed in the UK to encourage more productive investment. Our EU counterparts clearly felt the same, reforming Solvency II in their jurisdiction as well.

Were it up to us, we might have placed a greater emphasis on dynamic alignment with the EU, to make it easier to do business across borders and to prevent the creation of additional red tape that could come from the extra reporting costs that may face firms. Additionally, we might have placed a greater emphasis on encouraging specific tax investments as well—for example, in green infrastructure. None the less, we are where we are. We welcome the fact that the reforms should lead to, in theory, more productive investment.

One issue I would flag to the Minister is that it is currently not clear whether the new regime will end up being more risky than the new EU regime, partly because a lot will depend on how the respective rules are implemented but also because different types of insurance are bought in the EU and the UK. I would be grateful if the Minister could reassure us that there are plans in place, or that they would consider putting plans in place, to review the risk that may emerge from this in years to come.