Clifford Chance
PRA and FCA publish regulatory framework for insurance special purpose vehicles
6 November 2017
On 1 November 2017 the Prudential Regulation Authority ("PRA") and the Financial Conduct Authority ("FCA") published their final approach and expectations in relation to the authorisation and supervision of Insurance Special Purpose Vehicles ("ISPVs") which will be used to issue Insurance Linked Securities ("ILS") in the UK.
In general, we are pleased to see that the PRA and FCA have adopted a constructive approach for reviewing and approving ISPV applications, emphasising proportionality and a consideration of particular issues on a case-by-case basis. Such an approach is encouraging and should give sponsors confidence of a supportive environment and will go a long way to making London a competitive market for ILS. This briefing note looks at the key aspects of the PRA and FCA's final approach.
