Bloomberg Law
March 7, 2023, 7:49 AM

Bailey Says UK’s Insurance Reforms Increase Failure Risk by 20%

Tom Metcalf
Tom Metcalf
Bloomberg News

The governor of the Bank of England has told lawmakers that the UK government’s plans to reform insurance capital rules increases the annual risk of a failure in the life insurance sector by around 20%.

The likelihood of a failure will rise to 0.6% from 0.5% if the government’s plans to overhaul Solvency II rules are implemented, according to a letter sent by Andrew Bailey to the Treasury Committee published Monday.

The letter noted that had the central bank’s preferred set of “reforms been taken forward, we estimate that less than half of this increase would have occurred.”

The BOE’s ...