Global insurance regulators are taking different approaches to capital rules and reinsurance oversight, according to Fitch Ratings in its latest review of regulatory developments from April to September 2025.
Across Europe, Asia-Pacific, and other regions, regulators are adjusting solvency frameworks to drive more funding into economic activities. For example, the European Commission has proposed reducing capital charges on long-term equity holdings and senior tranches of securitizations, aiming to encourage insurers to invest more in corporate financing. Similarly, China has announced a 10% reduction in capital requirements for equity investments to stimulate insurer participation in economic growth.
In Australia, the regulatory agenda links lower capital charges with better asset-liability matching. This move is designed to make annuity products more sustainable for insurers, while also ensuring they remain affordable for customers.
However, the United Kingdom is charting a different course. UK officials are proposing reforms to risk transformation rules to promote innovation and bolster London’s position as a global reinsurance hub.
While regulators in Europe, the Middle East, and Africa (EMEA) and Asia-Pacific (APAC) are easing some regulations, the United States and the UK are taking a more cautious stance, focusing on tighter scrutiny of funded reinsurance treaties in life insurance.
In the US, regulators have introduced an asset adequacy test to ensure alignment between assets and liabilities in such treaties. In London, officials have indicated that they may tighten oversight of these agreements, although specific details are still under review.
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