PRA seeks views on transfer of risk in life insurance

The PRA has published a discussion paper on innovation in the life insurance sector, and sets out the regulator’s thinking on policy changes that could allow life insurers to transfer defined tranches of risk to the capital markets.

The PRA is considering a range of innovative structures, including potential reforms to the Insurance Special Purpose Vehicle framework or approaches used in markets such as banking.

General insurance firms have long used transformer vehicles to transfer insurance risk to capital markets, and banks use Significant Risk Transfers to transfer asset portfolio credit risk to investors.

Comments are requested by 6 February 2026.