UK regulations are unlikely to move away from the Solvency II requirements following Brexit, according to Adrien Collovray, associate director–international, captive consulting, Willis Towers Watson.
Speaking on the ‘Brexit: Boom or bust?’ panel at the 2018 European Captive Forum, Collovray said due to future equivalence requirements between the UK and the EU, it was likely the UK would have insurance regulations as near to Solvency II as possible.
He explained: “I think it is very unlikely that the UK will soften Solvency II requirements because for access to market the EU will require for the maintenance of that equivalency that it will at least be equivalent.”
“I think Solvency II is viewed as the gold standard of regulation globally and it is unlikely that the UK will go it alone to create a harder solvency environment. So, I would expect the UK to keep as near equivalent to Solvency II as possible.”
Collovray said that the expectation from his captive clients ahead of Brexit was that they should “expect the worst but hope for the best”.
He suggested that there “will be short-term pain and short-term cost in implementing what is required in order to comply with continued access with the EU”.
He added: “However, I expect that to be a relatively short-term and over time those costs and governance obligations will just fall within the standard terms of business and undertaking.”