Discussing the FundedRe trend for UK life insurers and pensions to source offshore reinsurance for their risks, Vicky White, the Director for Prudential Policy at the Prudential Regulation Authority (PRA) of the Bank of England, has highlighted the UK ILS structure and regulatory regime as one way that patient capital could be sourced and brought onshore to support the life and pensions sector.
FundedRe, as it has been termed, has long been an area of focus for the Bank of England, in a similar vein to which offshore pension reinsurance and risk transfer has also been cited as a potential risk, or at least an area requiring additional oversight.
There has always been a concern that assets are being delivered offshore, while the risk remains domestically borne. Of course, that’s far from the case in many life and pensions reinsurance and risk transfer arrangements, but the Bank’s real focus has been on funded deals where it feels there could be a solvency related risk for UK companies.
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