Bank of England to Tighten Capital Rules on Offshore Life Insurance Trades
The Bank of England's Prudential Regulation Authority (PRA) plans to increase capital requirements for British life insurers engaging in funded reinsurance with offshore entities. The capital requirement will rise to about 10% from the current 2% to 4%. This move addresses risks from the growing involvement of private equity in offshore reinsurance. The PRA estimates UK firms' exposure at around £40 billion, expected to grow significantly. The regulator aims to correct imbalances in the current system, which it believes underestimates risks and favors funded reinsurance structures. 
