Newman explained that ongoing work is being undertaken between the LMG Taskforce, the Treasury and the Prudential Regulation Authority (PRA) with all parties “endeavouring to be in a position to approve ILS applications by 1 January”.
He suggested that the Treasury is pushing to get the Parliamentary approval process completed by the end of October.
The PRA has revealed that it aims to publish the ILS regulations by early November, so the application process can begin.
Newman said: “ It remains a taskforce objective to have at least one approval from the PRA and the Financial Conduct Authority in time for 1 January, reducing uncertainty for subsequent applicants.”
Over the past two years, the Treasury has worked with the PRA, the FCA and the London Market Group’s ILS taskforce to develop the UK’s ILS regulations.
The regulations will allow for insurance and reinsurance firms to transfer risk to the capital markets, meaning that risk can be managed more effectively for businesses and consumers.
Following the government’s initial consultation on ILS, the second consultation, published in November last year, proposed to create a protected cell company (PCC) regime for multi-arrangement insurance special purpose vehicles (ISPVs).
The consultation said that multi-agreement ISPVs are permitted under Solvency II, however, the core requirements of the directive “will apply in respect of each individual contractual arrangement”.
According to the government, PCCs introduced under the Risk Transformation Regulations will only be available for use as authorised ISPVs.
The government said that working with the PRA and the FCA is an aim to “create a regime that is internationally competitive and in line with the UK’s move towards a territorial tax system”.