The UK’s insurance-linked securities (ILS) regulations will have their publication delayed, after Prime Minister Theresa May announced a snap election this week which means Parliament will not be able to consider the regulations until a new Parliament is convened after the vote.
Earlier this week UK Prime Minister Theresa May announced her parties plans to hold a general election on June 8th 2017, which with such a short period of time to that date meant that many parliamentary discussions and debates would get put on hold.
The mission to launch an ILS regulatory regime in the UK, which is also seen as an important development for the London insurance and reinsurance market, is one of those parliamentary issues that will now not be heard until after the election.
It had been hoped that the regulations would return to Parliament and a final version be published in advance of Easter, but that date was missed.
Artemis has now had it confirmed by a source close to the process that the calling of this early election will delay any further progress at this time, as Parliament cannot consider the ILS regulations until after the election once a new government has been formed, so mid to late June at the very earliest.
With purdah, a period typically running for six weeks up to a general election, meaning that the UK parliament cannot make any announcements about new initiatives reaching the next step in the ILS regulatory framework process is unlikely.
It’s a shame, as the feedback from ILS market participants had been gathered and fed back into the working version of the regulations, meaning all that was required was a Parliamentary pass to allow the final proposed version of the ILS framework to be published.
So with further work on the ILS regulations not really required, it seems that politics will now hold up the UK’s ambitions to host insurance-linked securities (ILS) and collateralised reinsurance transactions.
That means the original target of having the UK ready to act as an ILS domicile by this autumn now looks very unlikely.
It also raises the question of whether the regulation will be taken up by any new government that is formed, as political uncertainty means the outcome of the election cannot be guaranteed to be a continuation of the status-quo in the UK.