The UK government plans to publish the first draft of its insurance-linked securities regulations this autumn to promote the country's insurance-linked securities (ILS) business.

        A government consultation paper was published in February this year, and Simon Kirby MP, Economic Secretary to the Treasury, said a draft was expected before the end of this year, with implementation in early 2017.

        In his letter to Nicolas Aubert, chairman of the London Market Group, Kirby said: "Following the Treasury's consultation on a joined-up regulatory and tax approach to ILS special purpose vehicles, we now need to move to the next stage of the project: establishing detailed rules to implement the new framework. I plan to publish draft regulations on the consultation after this autumn, with a view to finalizing the regulations before Parliament early next year."

      In the initial consultation, the government department engaged in lively discussion on whether to adopt protected cell companies (PCCs), and ultimately leaned toward allowing PCCs to facilitate ILS transactions.

        The cell captive structure is used worldwide in both traditional captive and ILS business, and has been most successful in Bermuda and Guernsey.

         Gibraltar introduced a new class of PCC in November 2015 in the hope of gaining a place in global competition, while Malta's securitization cell company structure was designed for the same goal.

Source: Captive Review