Michael LewisThe Government has published its feedback on its consultation on changes to the Risk Transformation Regulations and its next steps. It plans to:
- introduce more flexible funding requirements and authorisation processes for transformer vehicles;
- enable cells in protected cell companies to take on multiple risks from multiple persons; and
- enable protected cell companies to be carry on the regulated activities of effecting and carrying out contracts of insurance within the new captive insurance framework.
The Government sees the use of insurance linked securities are an increasingly important risk transfer solution which allow insurance risks to be transferred into capital markets. It will make the necessary legislative changes in primary and secondary legislation and work with the financial regulators who will make changes to their rules once the legal changes are in place.
The PRA has already committed to consulting on a new captives regime this summer, but that is too soon to feature the legislative amendments. The PRA will press ahead and will consult on incorporating PCCs into its regime when the legislation is in place.