On 5 February 2019, the Prudential Regulation Authority (PRA) published Consultation Paper (CP) 3/19, which proposes to update Supervisory Statement (SS) 18/16 “Solvency II: longevity risk transfers” to simplify the pre-notification requirements for longevity risk transfers and update the key risks the PRA considers arise from longevity risk transfers.

Since Solvency II came into effect the PRA has closely monitored longevity risk transfers to ensure that the transactions are for reasons of genuine risk transfer, as opposed to a means of balance sheet manipulation to reduce the risk margin applying to liabilities which may not benefit from transitional measures. For further information on this topic see our earlier blog post here.