Gibraltar can become ILS centre of Europe
One of the leading insurance lawyers on Gibraltar believes the jurisdiction has the potential to become the go-to domicile for insurance-linked securities (ILS) deals in Europe given its history of innovation in the insurance industry and the expertise available there.
Nigel Feetham, a senior partner of Hassans, draws comparisons with the way Gibraltar has become a leader in the formation of special purpose vehicles and protected cell companies, largely thanks to legislation specifically drafted (with assistance from Hassans) to help this sector grow.
Now, Gibraltar has set its sights on the ILS market. Regulatory guidelines drafted recently will pave the way for the first deals to come to market—something Feetham suggests could be in a matter of mere months.
What is more, as ILS players seek a suitable European domicile, Gibraltar could quickly grab substantial market share becoming the jurisdiction of choice this side of the Atlantic.
“We believe there is significant interest in Gibraltar as a potential ILS jurisdiction,” Feetham says. “We believe that ILS structures are increasingly looking for a European domicile and more particularly, an alternative to Dublin.
“Speed of the regulatory process is key. ILS operates in a very competitive market and this is where we believe that Gibraltar offers a unique opportunity. We hope to deliver on all service expectations on par with Bermuda.”
He adds that Gibraltar’s EU status and European time zone represent important attractions for the ILS community as does its proactive government, which is trying to develop the finance industry and local professionals eager to get deals done.
He says he is confident the first ILS deals will start to flow soon. “All stakeholders are working extremely hard to achieve that objective.”
He adds that the transition for Hassans to work on ILS deals will be straightforward. It regularly works on a variety of capital markets transactions and previously developed a significant repackaging and securitisation practice. It also regularly advises insurers on all aspects of insurance transactions including policy wording, collateralisation and regulation.
“An ILS deal is not dissimilar nor is the structure alien to us. It is the sum of all those parts. And our familiarity is made even easier by the fact that we drafted the PCC and ILS enabling legislation in Gibraltar. Put it all together and you can see why we are so bullish about this,” says Feetham (who is Visiting Professor at Nottingham Law School, Nottingham Trent University and who has authored and co-authored a number of books).
“It is not different from what happened in the early 2000s when we established our repackaging practice. We acted for all lead arrangers in the repackaging space. They were looking for a European jurisdiction and the investors wanted EU paper. We delivered the service standards they expected including speed and we did very many deals.”
