Regulations implementing a new regulatory and tax framework for Insurance Linked Securities

To help cement London’s position at the forefront of the global reinsurance business, the government is consulting on a new regulatory and tax framework for Insurance Linked Securities business in the UK. Insurance Linked Securities enable insurers to transfer large and complex risks to capital market investors. A UK regime will help to strengthen the sector’s contribution to the UK economy and enhance the UK’s position as a leader in this global industry.

The consultation document sets out the approach to tax and regulation of ILS vehicles in the UK. It contains details on:

• the background to the consultation and our aims for the ILS project
• the responses received to the first ILS consultation in March
• the corporate structure of ILS vehicles to be used in the UK, which will provide for ILS vehicles to be set up as PCCs
• the taxation treatment of ILS vehicles and their investors
• the approach to authorisation and supervision of ILS vehicles by the PRA and FCA