Clifford Chance

A UK Framework for Insurance Linked Securities

23 November 2016

Today the UK’s Chancellor of the Exchequer, Philip Hammond, delivered his Autumn Statement which includes a reference to the Government's plan to make London an international centre for insurance-linked securities ("ILS"). To bring the Government's plan into effect, two consultation papers have been published today – a HM Treasury consultation on the Risk Transformation Regulations 2017 and the Risk Transformation (Tax) Regulations 2017 which will create the legal and tax framework to bring ILS business onshore and a PRA consultation on a Supervisory Statement that sets out guidance on the regulation of Insurance Special Purpose Vehicles ("ISPVs") used in ILS transactions.

The consultations published today follow significant input from the London Market Group ("LMG") ILS Taskforce, a group of industry practitioners with expertise in specialist risk transfer business. As legal advisors to the LMG and members of the ILS Taskforce, Clifford Chance has been active in the preparation of the ILS legislation and, in this briefing paper, we consider the new legal and regulatory framework.

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