The U.S. arm of a British insurer has tapped the capital markets for capital it can use to support term life insurance product guarantees.

Banner Life Insurance Company, Rockville, Md., a unit of Legal & General Group P.L.C., London, says First British American Reinsurance Company II, a special-purpose financial captive with a domicile in South Carolina, has raised $450 million.

Banner Life will be using the capital to use a reinsurance arrangement to meet Regulation XXX reserve requirements for a block of level-premium term life insurance business.

FBARC II has the authority to raise an additional $50 million if the experience of the reinsured block turns out to be much worse than expected, Banner Life says.