LONDON: A review of rules will not lead to any "radical departure" or a reduction in capital requirements, but it will take time to complete, Bank of England Deputy Governor Sam Woods said on Tuesday.

Britain's exit from European Union has prompted the government to review insurance capital rules inherited from the bloc, raising industry hopes of less burdensome requirements.

Woods, who also heads the BoE's Prudential Regulation Authority, which regulates Britain's top banks and insurers, played down any such expectations.

"Now that we have left the EU we have no interest whatsoever in lowering levels of resilience or policyholder protection, but we can and should make changes to tailor regulation so it fits our market better and is more efficient and coherent," Woods told the Association of British Insurers (ABI).

"That process will take some time but it will work better if the detailed rules are placed into our rulebook."

The ABI said last month that 35 billion pounds ($48.4 billion) of capital locked in by the risk margin element in capital rules known as Solvency II, could be used to increase investment in the UK economy and tackle climate change.

The risk margin in an extra layer of capital insurers must hold as a safety buffer in case they get into trouble.

However, Woods said he had doubts "about a reform package which materially decapitalises the insurance sector," adding: "While it's natural for the private sector to focus on private interests, it's part of our job to keep an eye on the potential public costs of significant insurance failures."