The London Market Group (LMG) has welcomed a letter from the Economic Secretary to the Treasury, Simon Kirby, in which he laid out the timings and next steps in the Insurance Linked Securities (ILS) project.
Following Treasury consultation on the overall approach to regulation and taxation of ILS Special Purpose Vehicles, the next phase will be to finalise the detailed regulations that will implement the new framework. The letter outlines the Treasury’s plan to issue draft regulations for consultation later this autumn, with a view to placing final regulations before Parliament early next year.
Simon Kirby, Economic Secretary to the Treasury commented: “The role that London plays as a global hub for specialist insurance and reinsurance is an important part of the UK's financial sector exporting strength. Given the increasing importance of alternative risk transfer techniques, the Insurance Linked Securities (ILS) project aims to provide London with the framework it needs to remain a world leader in reinsurance. I am very grateful for the productive contribution that the London Market Group has made to this project.”
Nicolas Aubert, Chairman of the LMG said “We are heartened to hear that the ILS project remains a priority for the Treasury, and we very much look forward to working with them to ensure successful implementation of the UK's new ILS framework as soon as possible in 2017.
“The government recognises both the importance of the ILS project in making the UK and London even stronger in global reinsurance market, and they clearly value the contribution made by Malcom Newman and others in getting the project to where it is today. The ILS taskforce has contributed tremendous expertise and a wealth of experience to develop the detail behind some of the proposals.
“We are delighted to have built such a constructive relationship with the government, which is crucial to maintaining and improving London’s position as a pre-eminent insurance hub. This is a great first step towards the success of our wider work in creating a better business environment for us in response to changing market needs.”