US and UK authorities are tightening rules for asset-intensive reinsurance to manage counterparty and recapture risk, according to a Fitch Ratings global regulatory update.

In the Asia-Pacific region, Hong Kong and Singapore have proposed captive insurance frameworks; Australia has finalised amendments to general insurance reinsurance frameworks; and New Zealand has started consultation on changes to its Insurance Prudential Supervision Act 2010.

Fitch says consultations have begun in Bermuda and insurance hubs in Singapore, Hong Kong and the UK on introducing innovative risk transfer solutions.

“The aim is to improve access to insurance covers for SMEs and to better spread peak natural catastrophe exposures,” the update says.

“Proposals centre on protected cell company structures that would allow the establishment of captive insurance entities and insurance-linked securities with lower capital and reporting requirements, as well as a flexible capital resources framework and a faster authorisation process.

“Bermuda also plans to make parametric insurance more flexible, while parametric insurance is expanding in Latin America.”

Access the update here.