Insurance Special Purpose Vehicle has been approved for Lloyd's by the regulatory

19 January 2021 — Alexandra GUZUN
Lloyd's announced that it has received regulatory approval from the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) to set up a new multi Insurance Special Purpose Vehicle (mISPV).

The Future at Lloyd's strategy aims to create an insurance market that attracts new forms of capital therefore the approval is an important key element. The investors will access easier the Lloyd's market and will offer a more transparent and efficient capital management process.

Through the new vehicle, Lloyd's members will be able to manage their capital requirements by attracting new classes of investors such as pension funds and will benefit from reduced set-up times and lower transactional costs.

"As part of the Future at Lloyd's strategy, we continue to look at all ways we can make it easier and more efficient to deploy and manage capital at Lloyd's. We are delighted that Lloyd's has received regulatory approval to set up a new investment platform that will be available for all of the market to use. Through our sponsorship of the London Bridge Risk PCC we will give investors the option of a new tax transparent way to participate in the market with standardised documents and a much simpler repeatable process" has declared Burkhard Keese, CFO, Lloyd's.

"ILS investment is not new to Lloyd's, but this is the first time that a UK PCC has been set up as a platform to allow investors to back and provide capital to Members at Lloyd's. We look forward to working with investors and Lloyd's Members who wish to use this new PCC to structure their participation at Lloyd's" continued the Lloyd's CFO.

Lloyd's has sponsored the creation of an independently owned and managed UK Protected Cell Company (PCC), London Bridge Risk PCC Limited by using the UK's Protected Cell Company (PCC) legislation. The PCC will provide an access point for both UK and international investors, including insurance-linked securities (ILS) investors, to deploy funds in a tax transparent way into the Lloyd's market.

The new vehicle complements the more traditional approaches to deploying capital at Lloyd's by providing additional optionality.

Moreover, the process was quicker, by developing standardised documentation and processes, with more tax transparent and streamline the approach to regulatory approval for investors. Provided new individual proposals utilise the standard documentation and stay within the regulators 'Scope of Permissions', it will be a simple notification process for each deal, removing the need for costly, and often lengthy, individual applications.

Horseshoe, who is specialise in the management of ILS vehicles and operates across multiple jurisdictions, will provide the London Bridge Risk PCC Limited's insurance management services.

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