On 11th August 2026, Judge Thomas J. Lo of the Superior Court of California, Orange County ruled in U.S. Bank National Association v. Pacific Life Insurance Company (Case No. 30-2023-01330408-CU-IC-CJC), denying Pacific Life Insurance Company’s motion for summary judgment and also denying U.S. Bank National Association’s cross-motion for summary judgment. The court held that a $20m life insurance policy procured using nonrecourse premium financing was not automatically void ab initio under Delaware’s insurable interest statute.
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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