PRA funded-re proposal narrows capital arbitrage between reinsurance and direct assets
By IAN Editorial Desk
29 April 2026·2 min read
Primary source: bankofengland.co.uk
About 15% of new bulk annuity business has recently been ceded via funded reinsurance.
The PRA has proposed capitalising funded reinsurance more like the assets UK life insurers hold directly, ending an inconsistency it says has encouraged insurers to rely excessively on the arrangements to support bulk annuity business.
Consultation paper CP8/26, published on 29 April, proposes rules and expectations for funded reinsurance under Solvency UK and would change the Technical Provisions
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