Clifford Chance

Clifford Chance advises Neon on inaugural UK ILS application

International law firm Clifford Chance has advised specialist Lloyd’s (re)insurer Neon on its successful application to undertake an insurance-linked securities (ILS) transaction in the UK, the first of its kind under the UK's new ILS framework.

The permission will see Neon establish a new form of insurance special purpose vehicle, a protected cell company that will be used to transfer a proportion of the risks to be written in 2018 by Neon's Lloyd's syndicate 2468 to a group of institutional investors.

In December, a Parliamentary Delegated Legislation Committee approved the UK's Risk Transformation Regulations 2017 and the Risk Transformation (Tax) Regulations 2017, allowing firms for the first time to apply to the PRA and FCA to undertake Insurance Linked Securities transactions.

"The establishment of a UK ILS framework will augment London's offering as a global leader in the insurance industry," said Katherine Coates, insurance partner at Clifford Chance. "It has been an honour and a pleasure to be involved in Neon's inaugural application to a market that we expect to see grow and flourish in the coming years."