UK govt targets London ILS framework for 2017

The UK government has unveiled plans to implement an insurance-linked securities (ILS) framework in early 2017.

In a letter to the London Market Group (LMG), seen by Intelligent Insurer, economic secretary Simon Kirby laid out the timings and next steps for the project.

The Treasury has planned to issue draft regulations for consultation later this autumn, with a view to placing final regulations before Parliament early next year.

Kirby said that the role London plays as a global hub for specialist re/insurance and is an important part of the UK's financial sector exporting strength.

“Given the increasing importance of alternative risk transfer techniques, the 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,” he said.

Nicolas Aubert, chairman of the LMG, added: “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.

Aubert explained that the government recognises both the importance of the ILS project in making the UK and London even stronger in the global reinsurance market.

He said: “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.”