Clifford Chance
Feedback on the PRA's Thematic Review work on Funded Reinsurance Arrangements
On 15 June 2023, the PRA published a letter from Charlotte Gerken on ‘Feedback on the PRA’s preliminary thematic review work on funded reinsurance (FundedRe) arrangements’. The letter, addressed to the Chief Risk Officer at life insurance firms, provides insights from the PRA’s thematic review of FundedRe in the UK life insurance market, given its growing use in supporting bulk purchase annuity (BPA) transactions, which the PRA has previously expressed concern.
Overall, firms should expect PRA challenges in structuring deals that do not comply with regulatory expectations for concentration, investment and other risks.
