Consultation on insurance linked securities: Simmons & Simmons' response

Simmons & Simmons' response to HM Treasury’s consultation on regulations implementing a new regulatory and tax framework for insurance linked securities to be issued by insurance special purpose vehicles.

Simmons & Simmons has responded to HM Treasury’s consultation on regulations implementing a new regulatory and tax framework for insurance linked securities to be issued by insurance special purpose vehicles reported in our earlier article, “Use of UK SPVs for insurance linked securities issuance”.

Our response welcomes the proposals for a tax free UK ISPV regime which allows protected cell companies (PCCs) to undertake multiple ILS issuances each out of a separate liability, ring-fenced compartment. HM Treasury’s proposals for exemption from corporation tax and withholding tax for UK ISPVs and introduction of UK PCCs are a major and very welcome step forward.

However, we note that there are concerns that the regulatory burden is significantly higher in comparison with the regulation in other ILS jurisdictions. When compared to issuance through, say, Bermuda or Guernsey, the proposed regulatory framework for ILS issuance in the UK still falls short in terms of speed and ease of authorisation.

Read the Simmons & Simmons consultation response in full here

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