BoE reveals 20% higher chance of insurance firms collapsing due to Solvency II reforms

The BoE has published a letter to the Treasury Committee revealing that Government proposals to overhaul Solvency II rules to reduce how much capital life insurers must hold to protect themselves against bankruptcy actually increase the probability of a firm collapsing by about 20 per cent, raising the annual risk of a failure from 0.5 to 0.6 per cent.