The Bank of England’s Prudential Regulation Authority (PRA) has published its final policy and feedback on responses to CP15/24, setting out reforms to the UK Insurance Special Purpose Vehicle (UK ISPV) regulatory framework to make it simpler and faster to establish UK ISPVs and support greater use of insurance-linked securities. A new accelerated pathway will be available for certain UK ISPV applications that meet criteria in the PRA’s new statement of policy, including some types of catastrophe bonds. Working with the Financial Conduct Authority (FCA), the PRA will assess complete applications under this pathway and, where satisfied, issue approvals within 10 working days, replacing the current 4–6-week process for those cases. The package also streamlines and speeds up standard application and approval processes, enables a wider range of market practices to be undertaken in the UK, streamlines Senior Management requirements for all UK ISPVs, and clarifies the PRA’s expectations for UK insurers that cede risks to special purpose vehicles wherever they are established. The PRA highlighted HM Treasury’s 15 July 2025 consultation on changes to the Risk Transformation Regulations intended to address legislative barriers identified in CP15/24 and to set out further steps to develop the UK insurance-linked securities market. The PRA will consider the proposed legislative changes and the scope to further develop its own policies, and it encouraged industry participants to engage with both the HM Treasury consultation and the PRA.
Bank of England 2025-07-24
Bank of England Prudential Regulation Authority finalises reforms to UK insurance special purpose vehicle regime with 10-working-day accelerated approvals
The Bank of England’s Prudential Regulation Authority (PRA) has finalized reforms to the UK Insurance Special Purpose Vehicle (UK ISPV) framework, introducing an accelerated application pathway for certain ISPVs, including catastrophe bonds, with approvals possible within 10 working days. The reforms streamline application processes, expand market practices, and clarify expectations for UK insurers ceding risks to ISPVs. The PRA is considering legislative changes proposed by HM Treasury to further develop the UK insurance-linked securities market and encourages industry engagement.