A Bill to allow mutuals and friendly societies to raise capital through issuing Deferred Shares passed its last stage in the House of Commons on Friday and is set to receive Royal Assent.
The Mutuals' Deferred Shares Bill will allow such organisations to raise capital from their members for the first time.
Shareholders will become members of a mutual society with one vote each while providing capital to the mutuals.
Deferred Shares qualify as restricted tier one capital under the requirements of Solvency II.
Andrea Leadsom, economic secretary to the Treasury, said in closing the Third Reading debate: "We will consult the Prudential Regulation Authority and regulators as soon as possible after Royal Assent to ensure that the procedures are right.
"We will progress with this as soon as the legislative timetable permits."
Tim Harris, group finance director of Royal London said: "We very much welcome this landmark legislation which affirms the important role mutual insurers like Royal London play in providing valuable insurance and savings products to our customers.
"The Bill provides greater financial flexibility for mutual insurers, further enhancing the 'toolkit' available to manage their financial resources.
"The sponsors of the Bill are to be congratulated for helping promote and maintain diversity of provision of financial services in the UK, and providing a level playing field for mutual insurers, so they can continue to put the interests of their customers first in everything they do."