UK regulators approve Lloyd’s multi Insurance Special Purpose Vehicle for new capital
Lloyd’s today 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 approval is a key milestone for the Future at Lloyd’s strategy, which aims to create an insurance market that attracts new forms of capital. The new platform will make it easier for investors to access the Lloyd’s market and will benefit investors by offering a more transparent and efficient capital management process.
Using the UK’s Protected Cell Company (PCC) legislation, Lloyd’s has sponsored the creation of an independently owned and managed UK Protected Cell Company (PCC), London Bridge Risk PCC Limited.
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. Lloyd’s members will be able to use the new vehicle 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.
In addition, standardised documentation and processes have been developed, designed to make the process quicker, more tax transparent and to 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.
The new vehicle complements the more traditional approaches to deploying capital at Lloyd’s by providing additional optionality.
London Bridge Risk PCC Limited’s insurance management services will be provided by Horseshoe, who specialise in the management of ILS vehicles and operate across multiple jurisdictions.
Burkhard Keese, CFO, Lloyd’s said: “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.
“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.”
2. Lloyd’s acted as the sponsor for the application to form the new PCC. The PCC will be owned by an Orphan Charitable Trust, providing an independently managed Transformer vehicle to the market, directly regulated by the PRA and FCA. London Bridge Risk PCC Limited will provide independent services to investors and Members of Lloyd’s. Day-to-day management will be provided by Horseshoe Ltd with overall responsibility for running the PCC resting with the Board of London Bridge Risk PCC Ltd.
3. The London Bridge Risk PCC Ltd Board is made up of three Directors: Mike Baker from Horseshoe as the CFO, Helena Whitaker from Intertrust Ltd as the CEO, and Mark Dyson from Lloyd’s as the Chair.
4. Lloyd’s recently launched a new digital portal to provide Members, third-party capital providers and members’ agents quick and easy access to their Funds at Lloyd’s data. Find out more here
5. Visit lloyds.com for more news and information.
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Horseshoe is an Artex company and a subsidiary of Arthur J Gallagher & Co. Specialising in insurance management, risk transformation, fund administration, advisory and corporate services, Horseshoe is the world’s largest ILS service provider. With a market coverage of around USD50bn of assets supporting a broad range of structures, Horseshoe facilitates all types of ILS transactions and platforms and employs over 100 ILS professionals operating from offices in London, Bermuda, Guernsey and Cayman. Please see www.horseshoeglobal.com for more details, or email Paul Eaton, Global ILS Commercial Director: email@example.com