The Prudential Regulation Authority (PRA) has launched a consultation on proposed reforms to the Matching Adjustment (MA) regime, aimed at easing restrictions on insurers looking to invest more rapidly in the UK economy. Central to the plans is the introduction of a Matching Adjustment Investment Accelerator (MAIA), which would allow firms to temporarily access MA benefits before receiving full regulatory approval.
Under the proposals, insurers would be able to apply for an MAIA permission that provides a 24-month window to formally submit an MA application for eligible assets with new features. The move is designed to give firms greater flexibility when responding to time-sensitive investment opportunities, such as infrastructure or long-term projects, which might otherwise be missed due to the current application process.
The PRA said the proposed framework supports its secondary objective to promote international competitiveness and growth, while maintaining appropriate protections for policyholders. The regulator stressed that firms would still be required to meet defined eligibility criteria, and all assets included under MAIA would remain subject to eventual assessment.
Sam Woods, deputy governor for Prudential Regulation and CEO of the PRA, said the initiative is intended to allow insurers to make quicker investment decisions that support growth in the UK economy, without compromising policyholder protection.
The MA regime allows insurers to discount their liability cash flows at a rate above the basic risk-free rate when backed by appropriate long-term assets, resulting in a lower reported value of liabilities. By accessing this benefit earlier through the MAIA, firms could free up capital more quickly to reinvest.
The consultation paper also sets out operational details, including the application process, oversight requirements, and proposed limits on the proportion of MAIA assets that can be included in the overall MA portfolio. The intention is to balance prudential risk management with the objective of increasing investment capacity.
Ewen Tweedie, actuarial director at insurance consultancy Broadstone, said the MAIA could help insurers make faster investment decisions by enabling immediate access to MA benefits, with full PRA approval to follow within two years. He noted the inclusion of limits on MAIA assets in the MA portfolio as a mechanism to control risk while expanding investment flexibility. He said the consultation reflects a broader regulatory direction aimed at unlocking more insurance sector capital for UK economic and infrastructure development.
The proposals are expected to be of particular interest to insurers already using the MA, as well as those planning to apply in future. The consultation closes on July 16, 2025.
