David Rule: Solvency II one year in
Speech by Mr David Rule, Executive Director of Insurance Supervision of the Bank of England, to the Association of British Insurers, London, 21 February 2017.
We are approaching the first round of annual results and disclosures under Solvency II. Today, I want to recap how Solvency II was designed to work for the UK insurance industry; to look back on our approach to implementation and experience of operating the Solvency II framework in the first year of its life; and to pick out a few areas where we now know that Solvency II needs improvement, in particular the impact the current design of the risk margin is having on UK annuity writers' Solvency Capital Requirements (SCRs) and associated use of so-called Transitional Measures on Technical Provisions, which firms will be disclosing over the next few months. My focus will be life insurance, although I will touch on general insurance too along the way.