Solvency II is like Godfather II: Javid

The MP for Bromsgrove said the debates around the Solvency II regime have produced a “good outcome”, particularly with matching adjustment.

He said: “There has to be a degree of compromise between all EU states. I think, as it stands now, it will encourage long-term investments.

“It is like the Godfather II, the sequel which I hope will be better than the first and which sounds a lot more exciting.

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“This country now boasts the largest insurance sector in Europe and now we have to make sure we get Solvency II right.”

Mr Javid said the principle of Solvency II was right and will be a major improvement on Solvency I.

He added: “I believe Solvency II is a step in the right direction. There have been two key issues where we have really had to fight: third-country equilavence and the matching adjustment.

“Some of the responses in the EU has been quite hostile, but in the UK it has been an absolute priorrity to get it right.”