Solvency II reforms should be completed in 2024, according to Bim Afolami, economic secretary to the Treasury.
Afolami told the ABI annual conference this morning (February 27), that investing in the UK is the “safest bet you can make”.
Speaking to delegates in Westminster, he said the government wants to build an open and competitive regulatory environment.
Afolami added: “That is the cornerstone of both our reforms to Solvency II and our wider Mansion House reforms to the financial services sector at large.
“We're not just doing it for the performance, we're doing it so that you, the people in this room, can take advantage of it.”
The Prudential Regulation Authority published its consultation paper on the Solvency II reforms in September 2023.
It came after the government outlined changes to Matching Adjustment portfolios through legislation.
Afolami said: “From this year, firms can use or reinvest that extra money in their balance sheet as they see fit.
“The point of these items is to promote more investment into the communities of this country to promote more investment into our economy.
“That isn't charity, but it has a positive social good and the work that you will do taking advantage of those will make a positive difference to our country, both economically and socially.”
The reforms are expected to widen the range of investments firms can hold in MA portfolios and expand the types of insurance businesses that can claim MA.
The minister added: “Through close partnership with all of you here, we should complete the reforms to Solvency II this year.
“And as the PRA finalises the detailed implementation plans. I'm committed to ensure that the details are fully follow-through on our lessons and intent.
“I'm sure many of you will let me know if there are any problems about that detailed implementation because we're committed to making sure that these reforms work.”
In the Autumn Statement in November, hidden among the documentation was a challenge for the insurance giants operating in the UK.
As discussed in previous years, there was the question of whether Solvency II reforms will allow insurers to allocate their expansive investment portfolios into less liquid investments.
The Autumn Statement said: "The government is legislating to give effect to the Solvency II reforms, to deliver a more tailored, clear and simple regulatory regime for the insurance sector.
"The reforms will boost economic growth, by incentivising private investment for productive assets, such as infrastructure."
tara.o'connor@ft.com
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