Consultation outcome

Amendments to the Insolvency Arrangements for Insurers: Consultation

• From: HM Treasury
• Published: 20 May 2021
• Last updated: 7 April 2022 — See all updates

This was published under the 2019 to 2022 Johnson Conservative government

This consultation has concluded

Detail of outcome

In May 2021, HM Treasury published the consultation document ‘Amendments to the Insolvency Arrangements for Insurers’. The consultation document sought views on proposals to amend the current insolvency arrangements for insurers, to enable the UK authorities to better manage insurers in financial distress.

This document summarises the responses received to the consultation and sets out the government’s response to the issues raised.

The government intends to legislate for these proposals when parliamentary time allows, and will continue to consult with relevant parties.

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Original consultation

Summary

The government is consulting on amendments to the insolvency arrangements for insurers, which would enable the UK authorities to better manage insurer distress in an orderly manner.

This consultation ran from
9:30am on 20 May 2021 to 11:45pm on 13 August 2021

Consultation description

The government is proposing a series of targeted amendments to the current insurer insolvency arrangements.

These amendments include clarifications and enhancements to the court’s existing power, under section 377 of the Financial Services and Markets Act 2000 (FSMA), to order a reduction of the value of an insurer’s contracts (a ‘write-down’). They would also introduce new provisions to help mitigate business disruption and losses for insurers in distress, and a change to the protection provided by the Financial Services Compensation Scheme (FSCS) in the event of a write-down under section 377 FSMA.

These amendments would promote continuity of cover for policyholders by allowing earlier intervention by the regulatory authorities when an insurer was suffering financial distress, reduce costs to industry, and help maintain public confidence in the UK’s insurance sector.

Documents

Amendments to the Insolvency Arrangements for Insurers: Consultation

Ref: ISBN 978-1-911680-91-8 , 3129

PDF, 615 KB, 70 pages

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Response form

MS Word Document, 149 KB

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Amendments to the Insolvency Arrangements for Insurers: Response to Consultation

PDF, 377 KB, 40 pages

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Request an accessible format.

If you use assistive technology (such as a screen reader) and need a version of this document in a more accessible format, please email digital.communications@hmtreasury.gov.uk. Please tell us what format you need. It will help us if you say what assistive technology you use.

Published 20 May 2021
Last updated 7 April 2022 + show all updates

1. 7 April 2022

   Updated with response to consultation document.

2. 20 May 2021

   First published.