* Lawmaker: "sky's the limit" ambition needed after Brexit
* Industry facing 1.7 billion pound bill for COVID claims
* BoE: COVID claims won't mean "tons" more capital needed
(Adds more detail)
By Huw Jones
LONDON, Feb 10 (Reuters) - The Bank of England told insurers
on Wednesday not to expect any big reduction in capital
requirements after Brexit, adding that more capital could be
"part of the answer" to meeting a 1.7 billion pound bill for
COVID-19 claims.
Britain is reviewing the "Solvency II" rules for firms like
Aviva, RSA and Lloyd's of London insurance market that it
inherited from the European Union amid calls from insurers and
lawmakers for changes to keep the sector competitive.
"We are committed to upholding the principles of Solvency II
– they are our principles, and given the amount invested by
firms in implementing the Solvency II regime, we see no appetite
to tear them up and start again," said Anna Sweeney, the BoE's
executive director for insurance, told a Westminster Business
Forum conference.
The Association of British Insurers (ABI) told the
conference that the sector faces a 1.7 billion pound ($2.35
billion) bill for claims relating to the COVID-19 pandemic,
raising questions about whether insurers need to find fresh
capital.
"We are not leaping to conclusions that the industry needs
tons more capital, but the issue has highlighted the range of
contract uncertainty out there and there clearly needs to be a
better understanding of what that looks like," Sweeney said.
Capital may be a "part of that answer" but not before the
Bank of England has engaged with the industry in a "more thought
through" discussion, Sweeney said.
James Dalton, ABI director of general insurance policy, said
the "once in a generation" review could help insurers broaden
out portfolios to long-term investments like green technology
and infrastructure.
"There are billions of pounds of insurer assets that can be
repurposed to the critical challenges facing us," Dalton said.
Improvements were needed to burdensome reporting
requirements and slow regulatory decisions that drove new market
entrants to Gibraltar and Bermuda, Dalton added.
Lawmaker David Hunt, who co-chairs the all party
parliamentary group on insurance and financial services, said
that outside the EU, Britain needed to be clear about its
ambitions.
"I believe the sky's the limit," Hunt said
($1 = 0.7230 pounds)
(Reporting by Huw Jones; Editing by Jon Boyle and Nick Macfie)
