The Globalization of Asset-Intensive Reinsurance

In recent years, ceding companies and reinsurers across major jurisdictions around the world have faced increasing scrutiny from insurance regulators regarding the use of cross-border asset-intensive reinsurance (“AIRe” or “funded reinsurance”¹) for both affiliate and third-party business. The globalization of AIRe structures pioneered in the United States and Bermuda, coupled with the convergence of asset management and insurance, has engendered a multi-faceted response from industry regulators. Key areas of focus include the investment and reserving regimes of offshore reinsurers, potential conflicts and interconnectedness risks regarding the use of affiliated asset managers and asset originators, as well as insurance company investment in, and valuation of, private assets. Insurance and financial services regulators across jurisdictions have ramped up efforts to coordinate and share information around cross-border capital flows and, where appropriate, to implement new recommendations and requirements intended to improve transparency into the various arrangements and mitigate the potential risks of AIRe structures. In this multi-jurisdictional survey, we provide an overview of recent developments and perspectives from key jurisdictions impacting AIRe utilization in such markets, highlighting trends and issues that cedants, reinsurers and asset managers should keep top of mind when contemplating, negotiating and consummating funded reinsurance transactions.

I. The United States

Statutory Accounting Guidelines Updates

Over the last decade or so, there has been a growing reliance on cross-border funded reinsurance as a risk and capital management tool for US-based life and annuity insurers.² In this environment, US regulators have expressed concerns regarding the adequacy of the value (and quality) of assets supporting business ceded offshore by US insurers, with questions being raised as to whether the total asset requirement for such business is at a lower level than would otherwise be required under US statutory standards if not for such reinsurance. This has led to regulatory efforts to tighten and modernize actuarial guidelines in order to provide US regulators with additional information to evaluate and verify reserve adequacy.³

AG 55

In 2024, the Life Actuarial (A) Task Force of the US National Association of Insurance Commissioners (“NAIC”) exposed for comment a draft Actuarial Guideline (“AG 55”) calling for asset adequacy testing (“AAT”) to use more rigorous cash-flow testing (“CFT”) methodology so that US state regulators will be better able to understand the assets and reserves supporting business ceded to offshore reinsurers. At the NAIC 2025 Summer Meeting, AG 55 was approved and adopted by the NAIC Executive Committee and Plenary. Under AG 55, AAT will be required using a CFT methodology for certain asset-intensive reinsurance transactions. The adoption of the new guideline is intended to enhance reserve adequacy requirements, increase transparency with respect to assets supporting business ceded by US-domiciled life and annuity insurers, and ensure that assets backing such cessions are ultimately sufficient—both in amount and kind—to meet policyholder obligations. During the comment period for AG 55, concerns were expressed that the requirement for offshore reinsurers to post additional collateral or hold additional reserves to conform with US statutory standards regarding reserve adequacy could potentially run afoul of principles of the Covered Agreements⁴ and create unduly burdensome reporting demands. While AG 55 is designed to target large affiliated funded reinsurance transactions, it may also apply to certain third-party arrangements—specifically, those that materially affect the assuming reinsurer’s balance sheet or in which the ceding company or its affiliate owns at least 1% of the reinsurer.⁵

Practically speaking, AG 55 may increase the time and complexity required to appropriately structure and negotiate funded reinsurance deals for all parties involved in such transactions. Reinsurers and their cedants (whether third parties or affiliates) may also face certain new investment guideline limitations given the need under the regulation for insurers to demonstrate greater alignment between asset quality, liability profiles and risk management practices. It will be worth watching whether AG 55’s focus on economic substance will limit the use of aggressive asset strategies and require more conservative capital and collateral arrangements in the context of offshore transactions. While it remains to be seen if overall transaction economics will be impacted extensively, we are seeing this issue resonate in the context of third-party negotiations around AIRe collateral requirements, with parties beginning to reckon with the appropriate risk allocation on change-in-law risk in this area.

Investment Management and PE Investments

As part of the broader convergence trend noted above, we have now seen a sustained period of momentum regarding private equity (“PE”) investments in the life insurance and annuities sector, with financial players continuing to be attracted by the opportunity to access long-term capital and manage large pools of assets.⁶ Given increasing access of insurers to highly sophisticated asset management underwriting and origination capabilities—as well as the retail success experienced by US life and annuity direct writers affiliated with PE firms—we have seen both PE-backed and traditional insurers diversifying beyond historical life-side investment strategies. This shift includes increasing capital allocations to alternative assets and other private assets and utilizing innovative capital management tools such as structured investments as well as offshore—and in some cases, domestic—sidecars.⁷

Investment Management Agreements and Fees

While regulators across jurisdictions have an interest in ensuring that existing regulatory tools adequately address the complexities associated with PE-owned insurers, US regulators responded early on to market developments and have continued to consider the implementation of new criteria for reviewing investment management agreements between insurers and affiliated investment managers to ensure the terms are fair and reasonable.⁸ Discussions in the US regulatory community around potential areas for enhancing existing scrutiny include revisions to the Financial Condition Examiners Handbook to add new considerations for regulators when evaluating Form D Prior Notices of Transactions concerning affiliated investment management agreements (“IMAs”). In deciding whether or not to approve or disapprove an IMA, regulators are encouraged to consider whether IMAs include, inter alia: (i) clarity around the mechanics concerning investment and asset selection; (ii) appropriate levels of affiliated investment manager authority, discretion and review; and (iii) clearly-defined and disclosed investment management fees.

Change of Control

Additionally, in response to the growing convergence between private equity and life insurance, similar revisions have been proposed by FSTF and MWG with respect to the regulatory review of change in control (Form A) and disclaimer of affiliation filings. The new guidance encourages a more robust evaluation of complex ownership structures with enhanced scrutiny into the acquiring party’s ability to provide future capital support to the acquired insurer, as well as a more thorough review of the investment, management and operational agreements to assess which entities are delegated decision-making authority and control. Such proposals have also included monitoring the financial condition of an acquiror following the closing of an acquisition.

Changes to Statutory Accounting and Reporting

Recent changes to statutory accounting and reporting reflect a broader trend towards greater precision and transparency in financial reporting. During 2024 and 2025, various NAIC working groups exposed a number of initiatives aimed at providing regulators a clearer picture of an insurer’s assets and their impact on the insurer’s financial position.

Modco/Funds Withheld Disclosures

Notably, the Statutory Accounting Principles (E) Working Group (“SAPWG”) adopted revisions to SSAP No. 1—Accounting Policies, Risks & Uncertainties, and Other Disclosures to expand the existing restricted asset disclosure to include the extent to which assets subject to modified coinsurance (“Modco”) or funds withheld reinsurance agreements are related to or affiliated with the reinsurer. The purpose of this revision is to allow for a full comparison of assets by giving regulators a clearer image of the restricted assets not under the exclusive control of the reporting entity or that are earmarked for a specific purpose.

Principles-Based Bond Definition

Additionally, the SAPWG’s new principles-based bond definition (“PBBD”) became effective on January 1, 2025. Under this new definition, debt securities must satisfy the PPBD in order to qualify as Schedule D bonds for statutory accounting purposes, which will likely result in fewer debt securities qualifying as bonds.⁹ A debt security that fails to qualify as a bond under the PPBD is considered a non-bond debt security (“NBDS”), reportable on Schedule BA, and may only qualify as an admitted asset if its underlying collateral qualifies as an admitted asset. The default risk-based capital (“RBC”) factor for an NBDS owned by a life insurer is 30%, but a life insurer may file the NBDS with the NAIC Securities Valuation Office for evaluation and assignment of an NAIC risk designation, in which case it will receive the bond RBC factor associated with that designation.¹⁰ Accordingly, insurers will need to factor in the impact of additional burdens around one-off approval processes when making annual budgeting determinations and allocating head count and resources to internal investment accounting teams and workflows.

US Market Activity

Deal Activity by Financial Players

Notwithstanding the regulatory focus on AIRe utilization, the US deal market continues to be extremely active. On February 12, 2026, Brighthouse Financial Inc. (“Brighthouse”) announced that its common stockholders voted to adopt the previously (November 2025) announced definitive merger agreement, pursuant to which an Aquarian Capital LLC (“Aquarian”) affiliate will acquire Brighthouse and its approximately $240 billion in reserves for a purchase price of $4.1 billion. On January 6, 2026, Jackson Financial Inc. (“JFI”) entered into a long-term strategic investment and partnership with TPG Inc. (“TPG”), which included the establishment of JFI’s new Michigan-based captive reinsurer, Hickory Brooke Reinsurance Company (“Hickory Re”). The JFI-TPG deal includes a $500 million investment by TPG, representing a 6.5% stake in JFI, as well as the issuance of $150 million in TPG common stock to a JFI subsidiary.¹¹ Prior to that, Corebridge Financial’s (“Corebridge”) blockbuster transaction, which closed on January 5, 2026, with Corporate Solutions Life Reinsurance Company, a subsidiary of Venerable Holdings, Inc. (“Venerable”), itself owned by an investor consortium led by Apollo Global Management, Inc. (“Apollo”), was a 2025 highlight and is believed to be the largest standalone reinsurance deal in the life sector to date, with an account value totaling approximately $51 billion as of signing. The transaction involves both coinsurance and modified coinsurance arrangements, with $5 billion of general account value reinsured on a coinsurance basis and $46 billion of separate account value reinsured on a modified coinsurance basis. The deal also includes the sale of Corebridge’s investment adviser for its variable annuity portfolios, which is expected to build out Venerable’s separate account management capabilities.

Additionally, in December 2025, Talcott Financial Group, a subsidiary of global investment firm Sixth Street Partners, through its subsidiary Talcott Resolution Life Insurance Company (“Talcott”), closed a block reinsurance transaction with Metropolitan Life Insurance Company (“MetLife”) covering approximately $10 billion in variable annuity and rider reserves. The deal is structured on a modified coinsurance and funds withheld basis, with MetLife retaining policy administration and servicing responsibilities. Interestingly, as part of the arrangement, MetLife Investment Management will continue to manage about $6 billion of the associated assets under investment management agreements with Talcott.

Finally, Hildene Capital Management (“Hildene”) also announced its acquisition of SILAC, Inc. (“SILAC”), the parent of SILAC Insurance Company in December 2025. The transaction will result in Hildene’s full ownership of SILAC and is intended to advance the growth of Hildene’s insurance solutions platform as well as apply its alternative assets expertise to SILAC’s investment and risk management strategies.

Deal Activity by Strategics

Significant 2025 AIRe transactions are not limited to those involving PE-backed acquirors. For example, in July 2025, Equitable Holdings, Inc. (“Equitable”) consummated a significant reinsurance agreement with RGA Reinsurance Company (“RGA”), under which Equitable will reinsure 75% of its in-force individual life insurance block on a pro-rata basis. The transaction will free up over $2 billion of deployable capital for Equitable, generated through a positive ceding commission and capital release, in support of Equitable’s strategic focus on higher-return businesses. In March 2025, one month after Equitable and RGA announced their reinsurance agreement, Protective Life Corporation (“Protective”), a US subsidiary of Dai-ichi Life Holdings, entered into a strategic reinsurance agreement with Resolution Life to cede approximately $9.7 billion in reserves from its runoff blocks of structured settlement annuities and secondary guaranteed universal life policies. The transaction enables Protective to reduce market risk and release capital for reinvestment in growth initiatives, including potential acquisitions as well as possible expansion of its core retail businesses.

II. Bermuda

CP1 and CP2

Over the last few years, in an effort to address concerns from international regulators, the Bermuda Monetary Authority (the “BMA”), has moved to adopt new regulations that impact cross-border reinsurance transactions.

In February 2023, the BMA issued “Proposed Enhancements to the Regulatory Regime and Fees for Commercial Insurers” (known as “CP1”), which sought feedback from various stakeholders that was subsequently incorporated into a second consultation paper released in July 2023: “Proposed Enhancements to the Regulatory Regime for Commercial Insurers” (known as “CP2”). The BMA’s stated aim with CP1 and CP2 is to “ensure that the cornerstones of the regulatory regime for commercial insurers continue to be sound, serving the double goal of protecting policyholders and contributing to financial stability”. New rules giving effect to many of the proposals of CP2 became effective in March 2024 and include a grade-in period of three years for general insurers, and 10 years for long-term insurers to allow time for effective implementation.

As has been widely reported, key enhancements introduced in CP1 and CP2 include: (i) requiring prior approval from the BMA for all new block reinsurance transactions involving long-term commercial (re)insurers; (ii) requiring prior approval from the BMA for material changes to an existing Scenario-Based Approach model; (iii) increasing emphasis on senior management accountability and duties, including a new requirement for a formalized Model Risk Management framework; (iv) increasing risk sensitivity for certain risks in the Bermuda Solvency Capital Requirements framework; and (v) enhancing reporting requirements with respect to investment portfolios.

Letters to the CEO

On April 2, 2025, the BMA issued an update to its April 8, 2024 notice to stakeholders on “Prior Approval of New Long-Term Block Reinsurance Transactions,” expanding on the guidance of CP1 and CP2 and providing clarifications to the prior approval process for new block reinsurance transactions and the approval requirements applicable to modifications of existing block reinsurance transactions. The 2025 notice provided similar guidance to that of the 2024 notice, reiterating that “both future premiums…and in-force business are considered block transactions and are in scope,” while elaborating on the 2024 guidance by providing some examples of transactions that are in scope (“asset-intensive transactions, such as pension risk transfer and the ceding of fixed annuities, fixed index annuities, variable annuities and whole life or universal life policies”) and out of scope (including “traditional mortality/morbidity solutions such as yearly renewable term reinsurance, longevity swaps and stop-loss coverage for biometric risks”). The 2025 notice also described a new procedure for reconciling differences between a ceding company’s Total Asset Requirement (“TAR”) and the Bermuda Economic Balance Sheet TAR. In the current environment, we understand from local market participants that early engagement with the BMA, including by way of regular touch points such as quarterly transaction pipeline update meetings, is a prudent course of action for long-term reinsurers.

ISAs and ISACs

In addition to taking steps to promote stability and transparency, Bermuda has earned a reputation as an attractive jurisdiction in part by regularly introducing mechanisms and procedures to respond to commercial innovations. In January 2020, Bermuda introduced a novel type of business association called the Incorporated Segregated Account Company (“ISAC”) which allows for the segregation of assets and liabilities into distinct incorporated segregated accounts (“ISAs”), each of which has separate legal personhood from other ISAs. ISAs and ISACs “present a unique ability to have [segregated account companies] writing insurance business, investment fund business and digital asset business… all operating within the same ISAC structure… [each of which has] an opportunity to raise money from third-party investors through the offer of shares or other securities.”

ISACs, and Segregated Account Companies (“SACs”) and its Cayman variation, Segregated Portfolio Companies (“SPCs”), can be attractive to asset manager-backed reinsurers in Bermuda and the Cayman Islands as the structure offers flexibility in segregating cedant or other third-party investor equity at the transaction level while providing protection from creditor claims against the holding company. While not all transactions utilizing ISACs, SACs and SPCs are in the public domain, representative publicly disclosed transactions include the 2024 partnership between 26North Reinsurance Holdings (“26North”) and National Life Group to form Bermuda-based AeCe ISA, Ltd., which reinsured $4.9 billion of liabilities from National Life’s Life Insurance Company of the Southwest.¹² Recently, in August 2025, F&G Annuities & Life, Inc. announced an extension of its strategic partnership with Blackstone Inc. (“Blackstone”) in the context of forming the Cayman Islands-based Fort Greene Reinsurance Limited, which is backed by approximately $1 billion of capital from Blackstone-managed funds.

Ratings Agencies

In January 2026, the BMA announced that it removed Egan-Jones Ratings Co. (“Egan-Jones”) from its list of recognized credit ratings providers, meaning that Egan-Jones can no longer be used to inform an insurer’s solvency capital requirements in Bermuda. While the BMA announcement took some by surprise, Egan-Jones has faced scrutiny over the past year from regulators and the financial press.

Bermuda Market Activity and Other Related Offshore Jurisdictions

Bermuda

Against this backdrop of innovation tempered by careful regulatory scrutiny, Bermuda continues to be a market-leading jurisdiction for reinsurers and has seen a number of sizable reinsurance transactions in recent years, including affiliated sidecar-style transactions. For example, in addition to certain transactions already noted above which have a Bermuda component, in December 2024, MetLife and General Atlantic Service Company, LP announced the formation of Chariot Reinsurance, Ltd. (“Chariot Re”), a Bermuda-based sidecar reinsurance vehicle with more than $1 billion in initial equity contributions. By July 2025, Chariot Re completed its first significant transaction, assuming $10 billion in life reinsurance liabilities from its affiliate MetLife. Additionally, Prudential Financial, Inc. (“Prudential”) has engaged in several multibillion dollar third-party and affiliated reinsurance transactions with Bermuda reinsurers in recent years. In terms of third-party transactions, Prudential consummated its $12.5 billion cession of reserves backing guaranteed universal life policies to an affiliate of Somerset Reinsurance Ltd. in April 2024 as well as $11 billion of guaranteed universal life reserves to an affiliate of Wilton Re Ltd. in December 2024. In January 2025, Prudential announced a cession of $7 billion of Japanese whole life policies to a subsidiary of its Prismic Life Reinsurance, Ltd. sidecar. Additionally, on January 21, 2026, Assured Guaranty Ltd. (“Assured Guaranty”) closed its $158 billion (subject to post-closing adjustments) acquisition of Bermuda-based life and annuity reinsurer Warwick Re Limited (“Warwick Re”), renamed Assured Life Reinsurance Ltd. (“Assured Life Re”), which represented Assured Guaranty’s entry into the annuity reinsurance sector. Assured Life Re will concentrate on reinsuring fixed-term annuities and pension risk transfer annuities.

Finally, in February 2026, newly established Ancient Financial, which specializes in life and annuity reinsurance and asset management, entered into an agreement to acquire Bermuda-based F&G Re from a subsidiary of F&G Annuities & Life, which will be renamed Ancient Re upon closing. As part of the transaction, F&G will enter into a forward-flow reinsurance agreement with Ancient Re.

Other Related Offshore Jurisdictions

Finally, it’s worth noting that, while more international scrutiny has focused on Bermuda, given that it has significant involvement in this sector of the broader offshore market and is a recognized jurisdiction for both NAIC and Solvency II purposes, reinsurers in the Cayman Islands and Barbados continue to be utilized as a jurisdiction for sizable third-party and affiliate AIRe transactions for life companies based in the United States, the United Kingdom, and Asia, though such transactions are not always publicly announced.

III. The United Kingdom and the European Union

The United Kingdom pension risk transfer (“PRT”) market (and inbound M&A driven by interest in the same) is booming, with circa £50 billion transacted in 2024 and £40-£60 billion projected to be transacted annually over the next decade. Whilst estimates vary, some have estimated that 5-10% of such liabilities will continue to be onward-transferred via AIRe. However, the Prudential Regulation Authority’s (“PRA”) most recent statements in September 2025, discussed below, make the position less clear.

Unsurprisingly (given the regulatory scrutiny discussed below) many of these deals are not announced. Exceptions include, however:

• Warwick Re, which closed a $500 million AIRe transaction with Just Retirement at the end of 2023.
• Resolution Life, which announced a series of AIRe deals in the UK in 2023/2024 comprising a cumulative total of over $3.5 billion of UK liabilities.
• Macquarie Asset Management, which announced a substantial AIRe deal between InEvo Re and a leading UK insurer in March 2025. Since then, InEvo Re completed an impressive two additional reinsurance transactions in its first year of operations: a September 2025 transaction with a US-based life insurer, covering approximately $1 billion of liabilities, and a December 2025 transaction with another UK-based life insurer.

“Solvency UK”

While AIRe transactions were well established in the United Kingdom by the time of Brexit, the United Kingdom’s subsequent divergence from the single-market regime has impacted deal structures. Following the United Kingdom’s formal departure from the European Union at the end of 2020, the United Kingdom’s government announced in December 2022 a wide-ranging review of the Solvency II framework.¹³ This has ultimately resulted in the United Kingdom’s development of its own insurance regulatory regime—“Solvency UK”—adapted to the particular needs of the UK market. The United Kingdom has also introduced new supervisory objectives for the PRA designed to enhance the United Kingdom’s global competitiveness while safeguarding policyholders.

Reforms have led to a reduction of the “risk margin” (a component of an insurer’s “technical provisions” that is additional to its best estimate of liabilities or “BEL”) by around 65% for long-term life business, enabling a modified cost of capital approach to its calculation. Certain changes to the matching adjustment (“MA”) mechanism of particular significance include, inter alia: (i) adopting a margin (“fundamental spread”) that is more sensitive and tailored to better measure credit risk; (ii) liberalizing the eligibility criteria for MA assets and liabilities, e.g. to include a proportion of assets that are “sub-investment grade” and/ or have “highly predictable” rather than fixed cash flows; (iii) adopting a more proportionate approach to MA breaches by carriers; (iv) a requirement for insurers to submit a senior management attestation confirming that the assets held in MA portfolios meet relevant regulatory standards (including with regard to asset eligibility, risk management, and governance);¹⁴ and (v) introducing, through a policy statement (PS 17/25) and attendant new rules that came into effect in October 2025, an MA Investment Accelerator (“MAIA”) mechanism, which facilitates firms’ ability to acquire and deploy new MA‑eligible assets ahead of regulatory approval, subject to limits (e.g. 5% of MA liabilities or a £2 billion cap) and robust MAIA governance and contingency rules.¹⁵

Extensive PRA Commentary on Funded Reinsurance

In recent years, the PRA has exercised its discretion to tighten regulatory expectations around funded reinsurance arrangements, with knock-on implications for underlying bulk purchase annuities (“BPAs”).¹⁶ Following a thematic review, on June 15, 2023, the PRA circulated a “Dear CRO” letter which expressed concern about use of AIRe to transfer both longevity and investment risk to reinsurers, flagging structural vulnerabilities including under‑collateralization, asset‑liability mismatches, lack of valuation haircuts, and insufficient termination provisions tied to reinsurer solvency thresholds. It emphasised that firms must consider counterparty exposure limits, concentration risk, and exposure to correlated defaults across multiple reinsurers, especially under joint credit cycle stress. The PRA’s concerns stemmed in part from the turbulence in the United Kingdom financial markets in October 2022, and the manner in which liability-driven investment (LDI) funds used by pension funds struggled to source collateral to cover widening spreads.

On November 16, 2023, the PRA issued Consultation Paper CP24/23 (Funded Reinsurance), setting out its proposed expectations for life insurers’ governance, risk limits, collateral haircuts/eligibility, and capital treatment (Probability of Default (“PD”)/Loss-Given Default (“LGD”), diversification) when insurers utilize funded reinsurance. Then, on July 26, 2024, the PRA published Policy Statement PS13/24, with its final expectations housed in accompanying Supervisory Statement SS5/24 and a covering “Dear CEO” letter. The letter informed life company CEOs that use of AIRe raises risks in governance, liquidity, concentration and insufficient risk management, and should therefore be considered as part of a diversified overall asset portfolio strategy. PRA concerns centered on: (i) the recaptured assets not being Solvency II compliant; (ii) whether the assets will remain MA-eligible post-recapture; (iii) terms governing the collateral not being standardized; (iv) whether the cedant has internal model approval to re‑include recaptured assets; (v) ensuring robust recapture rights; (vi) the danger of “wrong way risk” (i.e., where the same issues affecting the reinsurer also impact the pot of collateral assets); and (vii) governance around collateral eligibility, liquidity, substitution rights, and triggers such as reinsurer default or downgrade.

In November 2024, the PRA published an updated version of SS5/24 (which has since been further updated in October 2025), clarifying its ongoing risk-management expectations (regarding internal counterparty investment limits, collateral policies, and recapture planning), capital aspects (PD/LGD, collateral recognition, recapture within MA portfolios), and contractual mitigants. Firms are expected to set limits so that recapture by one counterparty would not threaten the business model and limit idiosyncratic and correlated exposures across reinsurers. The same month of November 2024, the Bank of England (the “BOE”) published a Financial Stability Report flagging growing risks at the intersection of private equity ownership and life insurers, including risks linked to the growth of asset-intensive structures and illiquid assets – echoing the PRA’s stance. It underlined the need to improve cross-border regulatory transparency to better monitor the accumulation of any systemic exposures arising from these transactions.

In July 2025, the BOE published a further Financial Stability Report which described AIRe as being “often complex, opaque, and increase(s) interconnections in the financial system which has the potential to pose systemic risk if unaddressed.” It emphasized thatadditional work remains to be done to fully understand how private markets would function following a substantial market shock.

In addition, the PRA included in its Life Insurance Stress Test (“LIST”) for 2025 a specific exploratory scenario focused on an AIRe recapture simulation. LIST exercises are designed to test the resilience of leading UK insurers under stress. The 2025 exercise was specifically focused on stressing the PRT sector and the largest insurers in that sector. The results of LIST 2025 were published on November 17, 2025 (on an aggregate level) and November 24, 2025 (on an individual level for core stress, not exploratory stress, scenarios). This was the first LIST exercise completed under the new Solvency UK regime. While the results demonstrated impressive robustness of the sector when subject to severe stress, with respect to the AIRe recapture exploratory scenario (on an aggregate level), which involved assuming that an insurer’s most material counterparty defaulted with a requirement for recapture, this did show a significant (10%) reduction in aggregate SCR coverage ratio relative to the core scenario.

Therefore, it might be said that, until the PRA’s comments in September 2025 (as to which please see below), the regulatory focus was principally on risk management when it came to AIRe. Certain clear themes emerged:

Recapture: Insurers must be able to demonstrate that they would remain viable in the event of a recapture, whether from a single counterparty failure or from multiple, potentially correlated, reinsurer defaults. To ensure resilience, firms need to structure transactions carefully so that the financial and operational effects of a recapture can be assessed reliably, particularly under stressed market conditions. These estimates should then be weighed against the firm’s expected resources available in such stress scenarios. Where firms are unable to make a dependable assessment of this exposure, they are expected to apply stricter limits on their AIRe deals.

Counterparty exposure and identity: The PRA emphasizes the significance not just of financial strength or rating, but also of business model, systemic interconnection, and exposure concentration. The PRA is contemplating worst-case scenarios exacerbated by multiple UK insurers exposed to the same small group of PE-backed offshore reinsurers. The concern is that theoretical concentration risks could amplify systemic vulnerabilities if one or more counterparties fail or suffer substantial downgrades.

Offshore AIRe: The PRA has also made clear its concern with increasing reliance in AIRe in offshoring risk to, e.g., Bermudan and US reinsurers that have lower or different capital requirements. Accordingly, such offshore AIRe attracts a higher degree of PRA scrutiny and increased focus on localization of collateral in the United Kingdom, whether by “funds withheld” arrangements or otherwise. This is notwithstanding the fact that the United Kingdom treats Bermuda as fully equivalent for reinsurance purposes and is a party to the UK–US Bilateral Covered Agreement.

Mitigating PRA Concerns on Transaction Structures

Collateral Asset Types

The PRA has repeatedly raised concerns around types of collateral it considers less effective in mitigating the risks associated with AIRe, including non MA-eligible assets, illiquid and private assets, liquid assets outside the core expertise of the insurer, and assets denominated other than in pound sterling.¹⁷ A particular concern is that, in the event of a recapture, these types of assets would be traded under stressed market conditions. Potential mitigants include the following:

• Improved oversight by the cedant of collateral assets, through detailed reporting and clear investment mandates.
• Robust oversight over the composition and management of the collateral portfolio — such as mandating full or partial alignment with Solvency II or MA criteria, or ensuring that the assets can be readily restructured to meet such requirements even during periods of market stress.
• Cedant rights to recapture or otherwise transfer assets in the event of non-compliance.
• Structural mechanisms such as netting of reinsurance exposure, retention of risk by the cedant, funds withheld arrangements, or collateral accounts charged to the cedant.

Collateral Valuation Protections

In its June 2023 Dear CRO letter and as reflected in SS5/2, the PRA identified areas of concern regarding current market practices, such as instances where no valuation haircut was applied to the collateral, as well as situations where haircuts were applied but the valuation methodology was not sufficiently transparent to ensure the haircut appropriately reflected the underlying risks of the collateral portfolio. While there is certainly a pricing and risk trade-off in this area, best-in-class firms will adopt an approach that allocates risk between the cedant and the reinsurer in a way that optimizes and balances pricing and risk benefits of each AIRe transaction while ensuring that the collateral remains a reliable buffer in stress scenarios.

Solvency-Based Recapture Triggers

In the Dear CRO letter, and as reflected in SS5/2, the PRA also noted that, in some reinsurance agreements, termination rights linked to the reinsurer’s solvency ratio are calibrated at levels that are insufficiently conservative. While solvency-based triggers are often heavily negotiated, they should be calibrated to reflect the facts and circumstances of a given deal, such as the ratings and balance sheet strength of the reinsurer, deal size and/or liability duration and type, and the cedant’s overall risk appetite and level of sophistication. From the cedant side of the negotiation, triggers and relevant cure periods should be clearly defined without ambiguity and aligned with recapture plans. Prudent reinsurers will also have internal corporate policies covering cedant termination rights. While a cedant may assume higher solvency-based recapture triggers offer superior risk mitigation, all else equal, this is not always the case. Overly-cedant friendly solvency-based recapture thresholds (and solvency-based springing overcollateralization (“OC”) requirements, as noted below) can increase bank-run risk even at a well-capitalized reinsurer during market shocks.

Springing OC

In its Dear CRO letter and in the SS5/2, the PRA observed that some AIRe contracts contain clauses requiring the reinsurer to enhance the overall collateral level following specific trigger events, either pegged to a solvency threshold or a downgrade in the reinsurer’s credit rating. However, the amount of risk mitigation these provisions provide depends on how realistically they can be executed in practice. Collateral triggers should be set at levels that are both risk-sensitive and achievable by the reinsurer, enabling the continuity of the contract without creating undue strain. If the solvency or ratings triggers or springing OC levels are overly punitive, they may worsen an existing liquidity issue at a solvent reinsurer and undermine the very protection the collateral is meant to provide.

Collateral Substitution Rights

In its June 2023 thematic review and as reflected in SS5/2, the PRA stated that if funded reinsurance agreements do not afford the parties with rights to substitute collateral, cedants may end up with a “worst‑case” portfolio post‑recapture—potentially at the lower end of credit quality or liquidity. In our experience, even-handed collateral substitution provisions are often helpful to mitigate risk on both sides of AIRe transactions; that said, unfettered rights to substitute, in the reinsurer’s case, or force substitutions, in the cedant’s case, may exacerbate risks for the other party. As such, a mutually agreed definition of “permitted recapture assets” is often a superior way to effectively allocate risks in this area.

PRA’s Comments in September 2025

In September 2025, Vicky White, BOE’s director of prudential policy,¹⁸ discussed AIRe in a way that raised more fundamental questions that went beyond insurers’ risk management policies. In particular, the PRA appears to have a new focus on characterisation concerns and what it sees as the “bundling” of asset and longevity risk in a way that, it believes, may create regulatory capital advantages for the cedant. Since this speech, the PRA has held round tables with insurers discussing this. The comments did make clear that any changes in approach resulting from such characterization concerns would be prospective only and more widely that the PRA did not wish to prohibit use of AIRe as a “modest part of a firm's overall funding strategy.”¹⁹ The PRA also noted that its thoughts on characterisation were only preliminary in nature i.e. assumedly subject to potential modification, stating: “this is an initial diagnosis and we have not come to any firm views, so we want to explore these issues with stakeholders”.

In the same speech, the PRA touched upon the potential for exploring alternative risk transfer structures for life insurers, including the use of insurance special purpose vehicles, which would in principle allow risk transfer to the capital markets. Following up on this, in November 2025, the PRA issued a discussion paper on such alternative risk transfer structures, in which it noted the need for “patient” capital.²⁰

Generally, we expect much further debate in the coming months around the characterization points made by the PRA. Outcomes are unclear at the time of writing, and possibilities range from a higher capital charge being applied to cedants making use of AIRe, to there being a reduction in usage, to there being no such reduction in usage nor any increased capital charge and instead a modification of the PRA’s preliminary characterization analysis once it has gathered full feedback.

The European Union

To date, use of funded reinsurance by EU cedants has been limited relative to the United Kingdom, reflecting both limited stock of tradeable longevity risk, reduced demand for the large-scale de-risking mechanisms prevalent in the United Kingdom as well as regulatory attitudes.²¹

The International Association of Insurance Supervisors (“IAIS”), a global organization of insurance regulators from over 200 jurisdictions, has played a central role in shaping such attitudes, recently publishing a consultation paper in March 2025 analyzing structural shifts in the life insurance sector (the “IAIS Paper”).²² The IAIS Paper, coming out of several years of close monitoring of the funded reinsurance market, offers a comprehensive analysis of the emerging market trends and commentary on the macroprudential implications thereof. A central focus of the IAIS Paper is the insurance sector’s growing adoption of AIRe and the underlying drivers and associated risks, including hidden leverage, liquidity risk, credit risk and credit ratings. The IAIS Paper also considers how differences in reserving practices, capital requirements, and investment flexibility across jurisdictions are contributing to the rise in AIRe. The IAIS Paper flags the interconnectedness of the life insurance sector with broader financial markets and the potential risks that may arise from these structural shifts. Lastly, it identifies potential areas for enhancement in the IAIS’s ambit to ensure that regulation and supervision remain effective in light of macroprudential and systemic implications of such transactions (liquidity, concentration and valuation complexity).

The IAIS Paper also highlights the role of the European Insurance and Occupational Pensions Authority (“EIOPA”) in exercising supervisory guidance to manage AIRe risks across borders, which statement calls for enhanced cross-border supervisory cooperation, consistent data collection and harmonized supervisory expectations. While EIOPA believes that the risks to the financial stability of the EU reinsurance market are still not material considering the limited use of AIRe by EU cedants,²³ it notes that—given most such transactions involve Bermuda reinsurers, which are few in number—concentration risk is increased. Accordingly, EIOPA will continue to closely examine (in cooperation with the EU National Supervisors) the emerging developments and possible risks linked to AIRe, with particular scrutiny on liquidity, valuation methods and monitoring of off‑balance sheet or non‑European Economic Area (“EEA”) holdings through collateral pools—particularly where illiquid or bespoke assets form the core of such pools.

Further inhibiting this activity, Solvency II limits the amount of risk that an EU cedant may pass to a third country insurer that is not “equivalent” (under Art. 172 Solvency II). The position here is summarised as follows:

• Bermuda (reinsurance equivalent). The European Union recognizes Bermuda’s regime as fully equivalent for reinsurance (with carve-outs for captives and special purpose insurers). EU cedants can generally take full credit for Bermuda reinsurance.
• Switzerland (reinsurance equivalent). Likewise considered fully equivalent for reinsurance. EU cedants can take full credit without additional ratings or collateral overlays.
• UK (no reinsurance equivalence). Following Brexit, the United Kingdom is a third country without EU reinsurance equivalence. EU cedants can still obtain capital credit, but only if the UK reinsurer meets minimum credit quality (i.e., credit quality step (“CQS”) rating of 3 or better²⁴) or the arrangement is backed by eligible collateral that meets Solvency II criteria. There is no longer an automatic passport for UK reinsurers into the EEA.
• US (no automatic EU equivalence). The 2017 EU–US Covered Agreement removes any requirement for an EU or US reinsurer to post (legacy) collateral to obtain credit, provided the relevant treaty conditions are satisfied. This allows EU cedants to take credit for US reinsurance without collateral, despite the absence of formal EU equivalence.

Regardless of such challenges, there are pockets of AIRe-related activity in the European Union, including as follows:

• Ireland. The Central Bank of Ireland’s March 2025 newsletter singled out AIRe as an area of supervisory priority: it noted that a significant volume of EU life reinsurance flows through Ireland to non‑EU jurisdictions (principally the United Kingdom and Bermuda), and affirmed its support for EIOPA’s work on AIRe transparency and exposure reporting. As a result, Irish supervisors emphasize transparency and reporting in the service of ensuring cedants are able to demonstrate robust recovery/recapture mechanics.
• Netherlands. Following a consultation on funded reinsurance under the Wet op het financieel toezicht (the Financial Supervision Act in the Netherlands), on and after January 1, 2025, the De Nederlandsche Bank (“DNB”) now requires prior consent for material AIRe arrangements that permit the reinsurer to hold assets outside the EEA. The DNB’s Q&A / consent framework requires firms to evidence that cedant protections, governance and recoverability are robust—a direct regulatory response to debate around definitions of AIRe and concerns about asset relocation and enforceability of collateral maintained outside the EEA. This framework means Dutch insurers must undergo more strict upfront review of relevant transactions than many of their non-Dutch peers, with such review intended to ensure continued compliance with the Prudent Person Principle.

PE investment in EU (re)insurers

On 27 January 2026, EIOPA launched a consultation in light of increased interest of PE funds in acquiring EU (re)insurers. The consultation addresses supervisory expectations around the acquisition by PE firms of qualifying holdings in EU (re)insurers, as well as for their ongoing governance and management. The consultation remains open until 30 April 2026.²⁵

IV. Asia-Pacific²⁶

As with other international jurisdictions as the globalization trend has picked up steam, AIRe has gained substantial traction in the Asia-Pacific (“APAC”) life insurance market in the past few years. Japan, Hong Kong and Singapore in particular have seen a rise in reinsurance transactions, with notable players in the industry announcing new transactions and up-sizing existing reinsurance arrangements with offshore life reinsurers. New solvency frameworks and targeted rule-makings are impacting deal drivers and deal negotiations as the surge in cross-border AIRe transactions continues. APAC regulators share with their counterparts in the United States, the United Kingdom, and elsewhere, the common objective of aligning capital rules with the underlying economic risk (an aim often referred to as “equal capital for equal risk”) while safeguarding policyholders and local market participants involved in these increasingly bespoke cross-border reinsurance deal structures. Below, we provide a concise overview of the key regulatory changes in Japan, Hong Kong and Singapore and assess their near-term impact on market activity.

Japan

Regulatory Updates

This year, the Japanese Financial Services Agency (the “JFSA”) formally implemented the Japan Insurance Capital Standard (“JICS 2025”), an economic value-based capital regime. Although details are still emerging, the new rules are expected to raise capital requirements for long-duration liabilities and to heighten scrutiny of asset-intensive reinsurance structures where investment risk migrates to offshore balance sheets. In parallel, the JFSA has announced an unprecedented fact-finding exercise of closely examining the transfer of Japanese-insured risks to reinsurers “backed by asset managers,” requesting cedants to deliver counterparty credit analyses, details regarding collateral arrangements and stress-test results.²⁷ Market participants are therefore asking whether higher economic capital charges and a more heavily engaged supervisory stance could temper the recent pace of AIRe inflows, at least until local life insurers fully digest the implications of JICS 2025.

Most recently, in August of 2025, the JFSA announced plans to establish a new regulatory division to oversee the asset management and insurance industries. This development supports the JFSA’s efforts to improve oversight into asset management involvement in the insurance sector while continuing to promote Japan as a global hub for asset management activity.

Deal Activity

Following a busy few prior years in insurance M&A and funded reinsurance, Japan has seen a high volume of deal activity among large players in the first half of 2025. Since January 2025, a number of reinsurers have each announced new or upsized treaties with Japanese cedants since, while a steady stream of unannounced flow deals are being executed by both traditional and private-equity-backed reinsurers. For example, as recently as July, Resolution Life announced its second Japanese funded reinsurance transaction, a deal in which it faces Nippon Life Insurance Company’s (“Nippon Life”) subsidiary Taiju Life Insurance Company Limited on a flow cession of AUD-denominated fixed annuity business. A few months earlier, in May, Pacific Life Re entered into a funded reinsurance transaction with Tokio Marine & Nichido Life Insurance Co., Ltd. covering an in-force block whole of life (“WOL”) policies. RGA also announced a block transaction in July 2025 with The Dai-ichi Life Insurance Company, Limited (“Dai-ichi Life”), which saw RGA assuming US$1 billion of Dai-ichi Life’s in-force life business. Aspida Life Re Ltd. completed its second flow annuity reinsurance transaction in Japan with an unnamed Japanese life insurer, also in July 2025. At the end of September 2025, Athene announced a block reinsurance transaction with Sony Life Insurance Co. Ltd. pursuant to which Athene will reinsure an in-force block of USD-denominated whole life insurance policies and retrocede all mortality risk associated therewith to Swiss Re Ltd. This transaction marks Athene’s eighth Japanese reinsurance transaction to date. Lastly, at the start of October 2025, Brookfield Wealth Solutions Ltd. (“Brookfield”) entered into a reinsurance agreement with Dai-ichi Frontier Life (“Dai-ichi Frontier”) pursuant to which Brookfield’s US-based subsidiary American National Insurance Company will reinsure liabilities of Dai-ichi Frontier on a flow basis. This marks Brookfield’s first reinsurance agreement in Japan since establishing a representative office in Tokyo earlier that in the year. Finally, in late October 2025, PacLife Re announced the completion of its first two asset-intensive flow reinsurance transactions with unnamed “leading Japanese life insurers”, and Fortitude Re and Carlyle announced the establishment of a new joint venture, Bermuda-based FCA Re, with $700 million in deployable capital targeting the Asian life and annuity market. These transactions further emphasize the continued attention that highly-rated and well-capitalized international players are devoting to cross-border reinsurance with Japanese and other Asian cedants.

After an early focus on USD-denominated fixed indexed annuities, diverse liability sets including WOL business as well as cessions of liabilities denominated in JPY and AUD are now standard fare. As the market and opportunity set in Japan has matured, several offshore reinsurers have set up or disclosed plans to station representative offices or licensed brokers in Tokyo to support local intelligence gathering and, in some cases and to the extent permitted by applicable local insurance regulations, business development activities.

Hong Kong

Regulatory Updates

On July 1, 2024, the Hong Kong Insurance Authority (the “HKIA”) updated Hong Kong’s RBC framework to a principles-based regime. The framework introduces three pillars: quantitative capital adequacy, qualitative risk management and public disclosure, with a multi-year phase-in to ease transitional burden. Recently, on February 12, 2026, the HKIA announced a public comment period on proposed changes to its valuation and capital rules which include preferential capital treatment for eligible infrastructure investments, changes to required capital amounts for general business, and technical adjustments related to indexed universal life business, crypto assets, and specified stablecoins. While the HKIA is known for being somewhat cautious in nature, market participants report that the HKIA understands and appreciates the attraction to the use of funded reinsurance for its local life insurers (including asset-intensive coverage provided by offshore reinsurers operating under foreign capital regimes). There are also indications that local cedants are facing higher capital friction, thereby reinforcing demand for offshore reinsurers able to deliver both capital relief and higher-yielding asset strategies. Additionally, industry watchers anticipate that the new RBC regime’s credit-for-reinsurance formula should improve certainty around capital credit, supporting larger and more bespoke block and flow treaties.

Deal Activity

Hong Kong has established itself as an active funded reinsurance venue with Resolution Life’s June 2025 announcement of a US$1 billion whole-of-life and annuity block reinsurance transaction with an unnamed Hong Kong cedant covering an in-force portfolio of whole life and annuity policies. This deal is believed to be the first such deal since Global Atlantic’s ~US$5 billion acquisition of AXA HK business (which was ceded from AXA HK’s Bermuda branch) in 2021. The Resolution Life deal comes around the time of FWD Group’s July 2025 Hong Kong Stock Exchange listing (raising approximately US$445 million), which follows a string of strategic transactions between FWD and Apollo, including a December 2021 minority equity investment by Apollo’s subsidiary Athene and a ~US$2.2 billion whole-of-life block reinsurance treaty executed between FWD Japan and Athene in November 2023.

Singapore

Regulatory Updates

Since August 2024, the Monetary Authority of Singapore (“MAS”) has engaged in an extensive data collection effort to obtain information from its constituents on existing reinsurance treaties. This includes a review of reinsurance agreement terms to better understand the arrangements and to ensure onshore cedants are adequately protected. Just prior to that undertaking, in June 2024, the MAS enacted amendments to Notice 133 which sets out requirements on their principles-based Valuation and Capital Framework for life and non-life reinsurers. The revisions sought to refine the illiquidity premium applicable to corporate debt. Also in late 2024, the MAS issued a consultation paper proposing targeted enhancements to the risk-based capital framework in Singapore specifically with respect to the capital treatment of infrastructure and structured-product investments. Industry comments were due on November 22, 2024, though a response to the feedback has not yet been published by the MAS. The current heightened focus on AIRe by the MAS appears to industry watchers to be partly driven by the implications for the Singapore market of the ongoing insolvency proceedings relating to Bermuda-based 777 Re. Ltd.

Deal Activity

On the transactional side, Singapore continues to host a steady pipeline of broker-led auctions for both back-book and ongoing new business transactions covering a range of product types including indexed universal life and endowment contracts. PE-backed US and Bermuda based reinsurers, as well as Asian conglomerate-backed reinsurers, have each closed AIRe transactions with local cedants over the past 24 months, and Resolution Life recently established a representative office in the city-state to better position itself for origination of new opportunities.

South Korea

Regulatory Updates

In January 2026, South Korea’s Financial Services Commission (“FSC”) announced new capital quality requirements under the Korean Insurance Capital Standard (“K-ICS”) starting in January 2027, representing a shift from companies boosting solvency ratios through Tier 2 subordinated debt to prioritizing “higher-quality” capital sources such as paid-in capital, retained earnings, and Tier 1 capital instruments. Insurers will be required to hold capital equal to at least 50% of required capital as measured under K-ICS. The new rules stipulate that regulatory intervention will target companies with core capital ratios that fall below 50% and will involve insurer-specific benchmarks.

V. Conclusion

As the regulatory landscape continues to evolve and regulatory perspectives on innovative transaction structures shift over time, it is essential for insurers, reinsurers and asset managers operating in the global insurance space to keep well-informed of policy debates and potential rule changes across all key jurisdictions touching their business channels. Our insurance transactional, insurance regulatory and funds partners in the United States, the United Kingdom, Europe, and Asia are happy to assist you with any questions or follow-up requests you may have regarding any of the specifics topics covered above. Please do not hesitate to contact us for more information or to discuss.

 

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¹ The United Kingdom’s preferred term is “funded reinsurance,” while “asset intensive reinsurance” is more commonly used in other markets.

² Nearly $1 trillion in US life insurance reserves are now ceded to other jurisdictions. (Source: Oliver Wyman, Analysis of Systemic Risk in the Bermuda Long-Term Insurance Sector, June 2, 2025.)

³ Another example of this includes a new principles-based reserving framework under Valuation Manual 22 (“VM 22”) for non-variable annuity contracts. The revised VM 22 will require insurers to produce stochastic projections using company-specific assumptions for non-VA products issued on or after January 1, 2029, with such calculations optional for such products issued on or after January 1, 2026.

⁴ “Covered Agreements” are the agreements formally titled “Bilateral Agreement Between the United States of America and the European Union on Prudential Measures Regarding Insurance and Reinsurance” and “Bilateral Agreement Between the United States of America and the United Kingdom on Prudential Measures Regarding Insurance and Reinsurance.” The Covered Agreements allow US insurers with business operations in the United Kingdom/European Union to avoid certain group capital, governance and reporting requirements under the UK/EU regulatory systems for insurers, and UK/EU local presence and collateral requirements for US reinsurers. Reciprocally, under the Covered Agreements, UK/EU reinsurers meeting certain consumer protection standards are exempt from certain US state-based reinsurance collateral requirements.

⁵ First reports are due April 1, 2026. For more information on the requirements and scope, see our Legal Update, Asset Adequacy Testing for Reinsurance.

⁶ On this topic, see the AIMA presentation of July 31, 2025, moderated by Joe Engelhard for AIMA, on Key Trends in Strategic Collaboration Between Alternative Asset Managers and Insurance Companies.

⁷ The NAIC’s 2026 Strategic Priorities include moving toward finalizing, adopting, and guiding the implementation of a new investment/capital regime that will enhance regulatory oversight. The NAIC aims to ensure proposed reforms are well-vetted, balanced, feasible, and harmonized among the states. See NAIC 2026 Strategic Priorities.

⁸ Relatedly, as far back as 2021, the NAIC’s Financial Stability (E) Task Force (“FSTF”) and Macroprudential (E) Working Group (“MWG”) developed and exposed for comment a document identifying 13 regulatory considerations they believed needed to be addressed in relation to PE-owned insurers (“List of Regulatory Considerations”). This document, formally adopted in August 2022 by the NAIC Executive Committee and Plenary, became the basis on which various NAIC working groups and task forces developed a series of initiatives relating to the treatment of insurance company investments. Among the several regulatory considerations outlined in the List of Regulatory Considerations is the perceived challenge of identifying and monitoring the role of affiliated investment managers sitting in complex ownership structures. MWG last issued an update on the regulatory considerations in August 2024, by which time “significant progress” had been made with most of the considerations, but work was said to be continuing. See NAIC MWG Considerations Status.

⁹ In order for a security to qualify as a bond under the new PPBD definition, it must meet the following criteria: (1) it is a security, (2) it represents a creditor relationship, (3) there is a schedule for one or more future payments, and (4) it qualifies as either (A) an issuer credit obligation or (B) an asset-backed security. No “grandfathering” of existing investments is permitted.

¹⁰ To learn more, please see our Legal Update, Investment Related Highlights from the Fall NAIC 2024 Meeting.

¹¹ Hickory Re’s establishment exemplifies the increasing prevalence of domestic sidecars in the life insurance space. The transaction also serves as an epilogue to a prior deal, namely the 2020 $27 billion block reinsurance transaction between Athene Holding Ltd. (“Athene”) and Jackson National Life Insurance Company (“Jackson National”), which also included an equity investment by Athene in Jackson National’s parent, JFI, and the 2021 demerger of JFI and Prudential plc, which was facilitated by the transaction with Athene.

¹² This transaction built upon 26North’s earlier use of the same structure in a 2022 $4.3 billion block reinsurance transaction with American Equity Life.

¹³ The European Union’s Solvency II regime came into force in the United Kingdom on 1 January 2016, after several years of development in which the United Kingdom was closely involved.

¹⁴ This attestation must be provided annually and be approved by the firm’s board. Policy Statement (“PS”) 10/24.

¹⁵ The MA is a capital benefit to insurers that hold long-term assets that match the cash flows of similarly long-term insurance liabilities. It works by allowing insurers to adjust the discount rate used for valuing those long-term liabilities to reflect an "illiquidity premium" earned from holding the matching long-term assets, thereby reducing the present value of those liabilities. To read more, refer to our paper on the initial consultation paper underlying the policy statement: PRA Consultation: Matching Adjustment Investment Accelerator (MAIA).

¹⁶ As a recent example, on July 4, 2025, the PRA released a Letter to Chief Risk Officers of UK life insurers active in the BPA market regarding the use of solvency trigger-based termination rights in BPA contracts, touching on the interplay with the use of AIR to lay off BPA risk. For more information, see our Legal Update on this, The PRA's Letter to Chief Risk Officers on Solvency-triggered Termination Rights. “BPA” is the preferred term in the UK market for transactions commonly referred to in the US market as “PRT” deals or pension risk transfers.

¹⁷ See, e.g., June 2023 Dear CRO letter.

¹⁸ See Funded realignment: balancing innovation and risk − speech by Vicky White | Bank of England.

¹⁹ For a thorough analysis of PRA’s evolving approach see PRA update on approach to FundedRe | Insights | Mayer Brown.

²⁰ DP2/25 – Alternative Life Capital: Supporting innovation in the life insurance sector | Bank of England. Please see our detailed analysis of this discussion paper in our Legal Update, Alternative Capital for the Life Insurance Sector | Insights | Mayer Brown

²¹ See for example EIOPA’s Opinion on the Use of Risk Mitigation Techniques by Insurance and Reinsurance Undertakings

²² See Public consultation on draft Issues Paper on structural shifts in the life insurance sector - International Association of Insurance Supervisors.

²³ See EIOPA’s Financial Stability Report published on 12 December 2024 for specific data regarding the exposure of EU insurers to AIRe Financial Stability Report December 2024 - EIOPA.

²⁴ This equates to at least a BBB rating by Fitch or S&P or the equivalent Baa rating by Moody’s.

²⁵ For further detail on the consultation paper, see Acquisitions of (Re)insurance Undertakings by Private Equity Funds – Supervisory Statement of EIOPA | Insights | Mayer Brown.

²⁶ Although this section primarily covers funded reinsurance regulatory developments and activity in Japan, Hong Kong, and Singapore, it is an area of interest for regulators in Korea, which has seen recent activity in its market. Most notably, RGA and Tongyang Life Insurance Company, Ltd. executed the first cross-jurisdictional coinsurance transaction in Korea in June 2024, with RGA reinsuring a KRW 200 billion in-force block of life policies. This agreement was further expanded in October 2024, increasing coverage by an additional KRW 150 billion. These transactions are indicative of growing interest in cross-border asset-intensive reinsurance solutions across the Asia Pacific region beyond Japan, Hong Kong and Singapore.

²⁷ The JFSA has long-required insurers to report on their top 5 third party reinsurers annually; however, the growth in AIRe use has led to increased JFSA efforts to become better informed on market trends through more robust ongoing reporting requirements around the use of third-party reinsurance.