(Bloomberg) -- The Bank of England is proposing to increase the flexibility of a mechanism life insurers use to allocate capital, an early indication of the UK’s new regulatory regime for the industry.

The Prudential Regulation Authority said in a statement Thursday that it is consulting on reforms to the so-called matching adjustment, a calculation that calibrates how well a long-term asset matches a liability like paying pensions.

The reforms to the rules on long-term insurance products such as annuities include:

• Widening the range of investments and insurance products that can benefit from the advantages of applying the matching adjustment, including by investing in UK infrastructure;
• Reducing regulatory oversight for lower risk investments;
• Giving senior management greater autonomy over risk management

The changes are part of the UK’s reform of the European Union’s Solvency II insurance rules, a move that’s designed to release billions of capital for investment. The PRA opposed wide-scale deregulation, warning the Treasury that the changes could put future policyholders at risk.

“We propose to adjust regulations to reflect the decisions made by the government about the level of financial resilience that should be required of insurance companies,” PRA head Sam Woods said in the statement. “These proposals aim to promote policyholder protection while enabling the annuity sector to meet its commitments to the Government to increase investment in the UK economy.”

Read More: Bank of England Warns Overhaul of Insurance Rules Poses Risks

The consultation period closes on Jan. 5 and the any reforms are expected to be finalized and implemented by June 2024, the PRA said in the statement.

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