PRA to accelerate authorisations for UK Insurance Special Purpose Vehicles

Published on 24 July 2025

News release

Today, the Prudential Regulation Authority (PRA) published policy statement (PS) 9/25 containing its final policy and its feedback to responses received to consultation CP15/24 – Proposed changes to the UK Insurance Special Purpose Vehicle (UK ISPV) regulatory framework.

This PS marks an important step in the PRA’s ongoing intention to reform the functioning of the UK ISPV regulatory regime. It intends to enhance the safety and soundness of the insurance sector by making more diversified reinsurance capital available to cedants, whilst enabling the UK to play a bigger role in the global Insurance Linked Security (ILS) market, by making it simpler and more attractive to establish UK ISPVs.

The reforms introduce a new accelerated pathway for certain UK ISPV applications (e.g. some types of catastrophe bonds) which meet the criteria set out in the PRA’s new statement of policy. Under the accelerated pathway, in collaboration with the Financial Conduct Authority (FCA), the PRA will consider applications and, where satisfied, issue approvals within 10 working days (rather than the current 4–6-week process) of an application being submitted to the PRA and deemed complete.

In addition, the reforms will make it easier for a wider range of current market practices to be undertaken in the UK, while also streamlining and speeding up the standard application and approval processes. Further, both the PRA and the FCA have streamlined the Senior Management requirements for all UK ISPVs.

The reforms also clarify the PRA’s expectations of UK insurers who cede risks to Special Purpose Vehicles, wherever they are established. This will advance the PRA’s primary objectives of safety and soundness and policyholder protection by making more diversified reinsurance capital available to cedants.

Vicky White, the Director for Prudential Policy said:

“These reforms will deliver a much faster turn-around time for approval of new Insurance Special Purpose Vehicles in the UK, supporting growth and competitiveness while maintaining safety and soundness.”

To help inform these proposals the PRA convened a number of discussions with industry, including a subject expert group, to gather a broad range of information and explore options for proposed reforms.

Next steps

The PRA notes that HM Treasury (HMT) published a consultation on 15th July 2025 on Changes to the Risk Transformation Regulations which seeks to address legislative barriers outlined in CP15/24 and sets out further steps to develop the UK ILS market. The PRA is considering the changes proposed by HMT and the potential to further develop its own policies in a way that advances all of its objectives. The PRA is committed to work closely with HMT and encourages industry participants to engage with both the HMT consultation and the PRA directly to enable future policy development.