LONDON, July 8 (Reuters) - Reform of insurance capital rules would free up to 90 billion pounds ($108.05 billion) of capital for investment, but it should not be a "free lunch" that puts pensioners and policyholders at risk, Bank of England Deputy Governor Sam Woods said on Friday.
Changing insurance rules known as Solvency II that were inherited from the European Union is seen as a key Brexit "dividend" for Britain's financial industry, but the pace of reform has dismayed insurers.
Woods said industy was opposed to how the Bank wants to change the so-called matching adustment, which allows insurance companies to recognise as capital up-front a part of the income they expect to earn on their assets in the future.
"In our view a package which did not tackle the issues we have identified with the Matching Adjustment would be seriously unbalanced," Woods said in a speech.
($1 = 0.8329 pounds) (Reporting by Huw Jones; editing by Carolyn Cohn)