Guernsey Enhances Rules For Insurance-Linked Securities

The Guernsey Financial Services Commission (GFSC) has published a new set of rules which clarify the regulatory treatment of collateralised reinsurance, including insurance-linked securities (ILS), and allow for a one-day approval process.

From 1 January 2017, under the Insurance Business (Special Purpose Insurer) Rules 2016, an applicant for the licensing of a new Special Purpose Insurer (SPI) may be granted a single consent for the formation of further SPIs without call for further application.

The streamlined application process typically allows new insurers to be established within one business day.

The Insurance Business (Solvency) Rules 2015 have also been amended to expressly include the new class of insurer. Under the new rules an SPI is not required to maintain the minimum or prescribed capital requirements, nor to conduct own risk or solvency assessments.