Prudential regulation Shaping the regulatory landscape The ABI has expended all efforts in preparing responses to plans for prudential regulation in the UK. Here are some of our successes: Solvency II We engaged extensively with government and regulatory bodies to help shape policy by: Submitting comprehensive, detailed responses to HM Treasury Solvency II and Future Regulatory Framework reviews, in support of our objective to ensure that the future UK prudential regime is appropriately tailored to the UK insurance market We commissioned an analysis from KPMG on the impact of our Solvency II proposed reforms, and this found that around 95bn of UK insurers assets could be repurposed to support long-term productive finance initiatives Submitting a comprehensive response to PRAs Quantitative Impact Study (QIS) exercise to ensure that the package of Solvency II reforms expected in early 2022 is appropriately tailored to the UK insurance market. We also commissioned QIS-related analysis to act as a counterweight to the PRA when Solvency II reforms are being developed Securing a zero Credit Risk Adjustment (CRA) to the risk-free rate and the application of transitional measures, in the context of the Solvency II transition from LIBOR to SONIA Commissioning an analysis from KPMG on the impact of our Solvency II proposed reforms, and this found that around 95bn of UK insurers assets could be repurposed to support long-term productive finance initiatives Submitting a response to the PRAs Phase 1 Solvency II Pillar 3 regulatory reporting consultation, urging the PRA to go further and quicker with streamlining in this area, and setting out a range of proposals for the more ambitious Phase 2 reforms expected early in 2022 Delivering learning and training sessions on Solvency II. Training on climate change and prudential regulation will take place before the end of the year In November, HM Treasury published the second consultation on the Future Regulatory Framework (phase 2) which includes a secondary objective on economic growth and competitiveness for the regulators. While it is clear that HM Treasury has listened to our views on the statutory objective and this is a welcome step in the right direction, we are continuing to call for economic growth and competitiveness to be a primary objective for the regulators, embedded as part of their core purpose in the post-Brexit economy, and to press for greater accountability and external challenge to the regulators. The Bank of England We liaised with the UKs central bank to ensure our voice is heard and: Secured a more proportionate approach to the Climate Biennial Exploratory Scenario (CBES) exercise. We have been working with participating members through a dedicated working group to share common challenges and lessons learned and will continue to do so as the Bank of England considers whether to conduct a second round of the exercise Ensured that the voice of the insurance sector is heard clearly as the Bank of Englands long-term Transformation of Data Collection project has gathered momentum Influenced FCA policy on permitted links rules applied to insurers unit-linked funds to remove the 35% illiquid assets cap for the Long Term Asset Fund (LTAF), in regard to the Productive Finance Working Group Prudential Regulatory Authority We are working hard to ensure regulators are listening to our members by: Proactively developing an ABI position paper on Recovery and Resolution to influence HMT, Bank of England and PRA rulemaking before proposals are consulted on. Engaging closely with the PRA to ensure members views on Insurance Stress Test 2022 scenario structures are taken into account. Working to ensure that sensible standards and timelines for the implementation of IFRS 17 in the UK (on 1 January 2023) have been adopted, including securing a government announcement of a seven-year transitional period for tax purposes in line with industrys ask. We have driven work to ensure that sensible standards and timelines for the implementation of IFRS 17 in the UK (on 1 January 2023) have been adopted, including securing a government announcement of a seven-year transitional period for tax purposes in line with industrys ask