The end of the calendar year sees many in the finance world cast half an eye towards the holiday season, but for many in the life settlement market, the Florida Office of Insurance Regulation (OIR) gave them extra work. On 2nd December last year, life settlement providers registered to do business in the state received a ‘call for data’, which asked providers for a raft of information about all the life settlements they had purchased in the past six years in the…

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Insurers are favouring funded re as it helps firms manage the market and longevity risks associated with writing bulk purchase annuity (BPA) business by reducing capital charges and therefore making PRT deals more competitive. 

Unsurprisingly, given its growth and potential for capital optimisation, UK regulators have been carefully watching the increased use of funded re. In June 2023, the Prudential Regulatory Authority (PRA) sent a “Dear CRO’ letter to heads of risk at UK life insurers.

The letter outlined the regulator’s two main concerns from a sectoral review which it had carried out.

“One of the key risks arising in funded re is that firms recapture sub-optimal portfolios with depressed values and with limited ability to be transformed effectively to the firms’ preferred portfolio,” the PRA letter said.

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