UK reforms enable “much faster turn-around time” of ISPV approvals: PRA

The UK Government’s recently introduced reforms for the country’s ILS regulatory framework, are set to deliver a much faster turn-around time for approval of new Insurance Special Purpose Vehicles (ISPVs) in the UK, according to Vicky White, the Director for Prudential Policy.

We reported back in November 2024, that the UK’s Prudential Regulation Authority (PRA) was consulting on reforms to approval timelines for the insurance special purpose vehicle (ISPV) regulatory regime, which includes an accelerated pathway for certain catastrophe bond applications and a 10-day target for approvals of certain insurance-linked securities (ILS) arrangements.

Then, just last week, in its published consultation, the UK Government confirmed that the PRA will from 2026 begin reporting on ISPV approval timelines.

In order to provide clarity and transparency to those seeking authorisation about the timelines they can expect to experience, from early 2026 the PRA will report against the following targets.

1. 6 weeks for complete new firm authorisation applications from insurance special purpose vehicles.
2. 10 working days for complete new firm authorisation applications from insurance special purpose vehicles that qualify for an accelerated pathway.

As we previously said, this seemed to confirm that the new timeline targets for approval of insurance-linked securities (ILS) structures in the UK have been adopted, with brand new ISPV’s to be approved within 6 weeks, but those falling under the accelerated pathway now to be approved within 10 days.

The PRA announcement today now confirms this to be the case.

As well as this, the UK Government also recently launched a new consultation on its Risk Transformation Regulations, with the express goal of making the regime, which is largely applicable to catastrophe bonds and ILS, more flexible.

In its announcement today, the Prudential Regulation Authority (PRA) published a new policy statement that contains its final policy on the accelerated ILS approval pathway and its feedback to responses received from the consultation that was published on July 15, 2025.

The policy statement reads: “The PRA received six responses to the CP. Respondents generally welcomed and supported the PRA’s proposals, viewing them as a positive step forward in revitalising the UK ISPV regime. Several respondents noted that they expect the proposals to stimulate UK activity for ILS transactions, supporting competitiveness and growth in the wider insurance sector.

“While respondents were positive overall, some also noted that the proposed changes on their own may not be sufficient to bring new business to the UK. The PRA is actively looking at how to address the remaining key barriers noted by respondents, and where relevant is working with the necessary stakeholders.”

The policy statement also reveals that in regards to the PRA proposing to simplify the authorisation process for standard UK ISPVs, one respondent argued that the Variation of Permission (VoP) authorisation timelines should be expedited alongside other UK ISPV authorisations.

“In this respondent’s view, without such a change the UK may struggle to position itself as a competitive and responsive SPV hub,” the policy statement reads.

Adding: “After considering this response, the PRA has decided not to change the draft policy in this area. The PRA considers that VoP application timelines differ on a case-by-case basis depending on the scale and complexity of the VoP. The PRA encourages firms to engage in pre-application discussions – where such effective engagement takes place, experience shows that faster authorisation decisions are more likely to be feasible. The PRA will continue to engage with industry, including through forums such as SEGs, to identify opportunities for future policy development in this area, where appropriate.”

Moreover, the reforms also clarify the PRA’s expectations of UK insurers who cede risks to Special Purpose Vehicles, wherever they are established.

Ultimately, this is expected to advance the PRA’s primary objectives of safety and soundness and policyholder protection by making more diversified reinsurance capital available to cedants.

Vicky White, the Director for Prudential Policy, commented: “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.”

Also read: 

– UK Gov confirms new cat bond, ISPV timelines. Launches new consultation to enhance ILS regime.

– UK ILS reforms more likely to take activity from other jurisdictions than generate net-new: Fitch.