UK Pension Superfunds Could Hurt Life Insurers, Fitch Says
Law360, London (June 29, 2020, 6:16 PM BST) -- Life insurers could see falling sales from the bulk purchase annuities market as newly sanctioned defined benefit "superfunds" become increasingly common, Fitch Ratings warned Monday.
The ratings agency said that superfunds might be a more affordable option than insurers for employers looking to offload pensions liabilities. Earlier this month, The Pensions Regulator introduced interim regulatory rules for superfunds to operate that will apply until formal legislation from the government is published.
Fitch said the capital requirements for superfunds are less stringent than those for insurers, which are bound by Solvency II regulations.
"Superfunds will be allowed to operate with less capital...
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