Series
Publications
Series
Publications
On 24 July 2025, the UK’s Prudential Regulation Authority (the “PRA”) published a policy statement (PS9/25) containing its final policy on changes to the UK insurance special purpose vehicles (“ISPVs”) regulatory framework. The PRA had previously consulted on these changes in a November 2024 consultation paper (CP15/24).
ISPVs are used in insurance linked securities (“ILS”) structures, through which (re)insurers transfer risks from their balance sheets to capital market participants. The UK ISPV regime came into force in December 2017 but has seen limited uptake since then.
The PRA’s proposed changes to its policy framework, as set out in CP15/24, are intended to allow the UK non-life insurance sector to play a bigger role in the global ILS market. Amongst other things, the reforms introduce a new accelerated pathway for certain UK ISPV applications and are also designed to streamline and speed up standard application and approval processes, as well as making it easier for a wider range of current market practices to be undertaken in the UK.
A fuller overview of the proposals made by the PRA in CP15/24 can be found in our previous client alert.
According to the PRA, respondents to its consultation generally welcomed and supported its proposals, viewing them as a positive step forward in revitalising the UK ISPV regime. Some respondents did, however, suggest that the proposed changes on their own may not be sufficient to bring new business to the UK. The PRA says that it is actively looking at how to address the remaining key barriers noted by respondents, and where relevant is working with the necessary stakeholders.
A discussion of specific points of feedback received, along with the PRA’s responses to that feedback, is set out in chapter 2 of PS9/25.
Aside from minor clarifications and grammatical changes to its policy materials, the PRA says that it has only made one change to the substance of the draft policy proposed in CP15/24.
Specifically, the PRA has added a paragraph (2.42) to its new statement of policy to clarify that where it expects an accelerated pathway applicant to share a legal opinion as part of the application documentation, the PRA considers that if final documentation is not available at the point of application, a draft legal opinion will be accepted. The PRA believes that this amendment is of low materiality and will have no impact on firms beyond that envisaged in the draft policy set out in CP15/24.
PS9/25 contains the PRA’s final policy, as follows:
Links to other relevant materials, including reporting templates and a notification form, are set out as appendices to PS9/25.
The changes took immediate effect, with firms expected to meet the new requirements and expectations from the date of publication of PS9/25 (24 July 2025).
The PRA has indicated that it recognises that there may be some limited situations in which aspects of Rule 2.2A(3) of the ISPV Part of the Rulebook regarding the restriction on co-mingling of assets covering separate risk transfers, particularly those where there is a single investor supporting multiple risk transformation transactions, may be unduly burdensome. The PRA encourages firms to discuss this issue with supervisory contacts if they feel they are affected.
The PRA says that it will continue to engage with the necessary stakeholders to determine any further changes that may be required to the UK ISPV framework. It is also considering related changes to the Risk Transformation Regulations 2017 (SI 2017/1212) recently proposed by HM Treasury (see our client alert). The PRA states that it is committed to working closely with the Treasury and encourages industry participants to engage with both the Treasury consultation and the PRA directly to enable future policy development.
The PRA has said that it will publish a final reporting taxonomy (to include all UK ISPV reporting from 31 December 2025) reflecting its final policy and rules.