LONDON, Reuters The government should check that insurers are spending up to 100 billion pounds 125 billion on Britain39;s economy after their capital rules were eased, Bank of England Deputy Governor Sam Woods said on Wednesday.

Britain is rolling back capital rules for insurers from later this year and the industry has said this would make available up to 100 billion pounds to invest in infrastructure, but some lawmakers have doubts this will actually be the case.

I think it may happen, but I can39;t guarantee it, Woods told a subcommittee of parliament39;s Treasury Select Committee.

The finance ministry overrode the Bank of England to ease some capital rules more than Woods had wanted, which could make an insurance company failure more likely.

Lawmakers asked Woods if the central bank could monitor investments to ensure the extra money does not end up being used to pay dividends to shareholders or buy overseas assets instead.

Woods said it would be beyond the BoE39;s remit to direct insurers to allocate investments and it was up to government to monitor how the freed up capital is spent.

The government should do that, and I think they will do that. They have a strong incentive to do so, Woods said.

Charlotte Gerken, executive director for insurance supervision at the BoE, said investing 100 billion pounds over the next 10 years looks achievable given how the transfer of liabilities from pension schemes to insurers is accelerating.

This means insurers will…