The introduction of ILS legislation was delayed after UK Prime Minister Theresa May called for the snap general election that was held on 8 June.
Over the past 18 months, the UK treasury has worked with the Prudential Regulation Authority, the Financial Conduct Authority and the London Market Group’s ILS Taskforce to develop regulations that will implement a new ILS regime in the UK.
The letter, signed off by Stephen Barclay, economic secretary to the Treasury, stated: “London is the single biggest market for specialist risk in the world and is a global hub for insurance and reinsurance business. But this global business is evolving rapidly and the UK must innovate if London is to retain its uniquely important position in the market.”
It continued: “This is why the Treasury responded to calls from the industry to develop a bespoke regime for ILS in the UK—to help ensure that London remains the most competitive insurance and reinsurance hub in the world.”
“Alternative risk transfer techniques expand the capacity of the insurance and reinsurance markets, enabling risk to be managed more efficiently and effectively for businesses and consumers. With the right regulatory framework, I believe the UK can make a major contribution to the development and growth of alternative risk transfer. That is good news for the UK and for the global economy.”
The letter was also sent to Malcolm Newman, chair of the ILS Taskforce, Chris Beazley, CEO of the London Market Group, Sam Woods, CEO of the Prudential Regulation Authority and Andrew Bailey, CEO of the Financial Conduct Authority.