On 29 November, a Delegated Legislation Committee in Parliament approved the UK’s Risk Transformation Regulations 2017 and the Risk Transformation (Tax) Regulations 2017, which make up the UK’s ILS regulation.
The legislation is expected to pass into law on 4 December.
Over the past two years, the UK Treasury has worked with the Prudential Regulation Authority (PRA), the Financial Conduct Authority (FCA) and the London Market Group’s ILS taskforce to develop the UK’s ILS regulations.
Nicolas Aubert, chairman of the London Market Group, said: “Looking back at where we started in April 2015, our original wish list has pretty much been delivered in full and we appreciate the support that we have received from HM Treasury, the PRA and the FCA.”
Malcolm Newman, chairman of LMG's ILS Taskforce, added: “Undoubtedly the regulations will evolve over time as the ILS market itself evolves, and we are encouraged by the PRA’s willingness to engage in pre-application dialogue with parties interested in using the new regulations. This dialogue should minimise any issues applicants may have with the regulations.”
"The taskforce has consistently said that it seeks to grow the ILS pie… As an industry we need to be more vocal about the social good of insurance, demonstrating the resilience and critical support an insurance policy gives to its holder in the event of a disaster. Through doing this the pie will grow and there will be opportunities for London market players to generate growth via both traditional cover and new ILS solutions.”