The Prudential Regulation Authority (PRA) has announced new reforms aimed at accelerating the authorization process for UK Insurance Special Purpose Vehicles (ISPVs). This comes as part of the PRA’s efforts to reform the UK’s ISPV regulatory framework, enhancing safety and soundness in the insurance sector while making it easier to establish ISPVs in the UK.
The new policy statement, PS 9/25, introduces an accelerated pathway for certain ISPV applications, such as catastrophe bonds. Under this pathway, applications that meet specific criteria will be reviewed and potentially approved within 10 working days, a significant reduction from the current 4–6-week timeframe. This initiative is a collaboration between the PRA and the Financial Conduct Authority (FCA).
Additionally, these reforms aim to simplify and expedite standard application processes and broaden market practices within the UK. The PRA and FCA have also streamlined Senior Management requirements for all UK ISPVs.
Vicky White, Director for Prudential Policy at the PRA, 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.”
The PRA engaged with industry experts to gather insights on these proposals. Furthermore, HM Treasury has initiated a consultation on changes to Risk Transformation Regulations to address legislative barriers identified by CP15/24. The PRA is reviewing these proposed changes to align with its objectives and encourages industry engagement with both HM Treasury’s consultation and its own ongoing policy development efforts.
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