UK: Pinsent Masons Insurance Briefing - UK Insurance Linked Securities Regime On Course For September As Regulations Published

Last Updated: 26 July 2017
Article by Alexis Roberts, Colin Read and Nicholas Bradley

Welcome to Insurance Briefing - a fortnightly round-up of insurance legal and business developments published on Out-Law - with analysis and commentary from the insurance team at Pinsent Masons.

The seven topics of focus this fortnight include:

UK insurance linked securities regime on course for September as regulations published

A new regulatory and tax regime for insurance linked securities (ILS) in the UK will come into force in the autumn, the government has announced, as it published the regulations that will govern the new regime.The regulations will be laid before parliament after its summer recess. They set out how to establish the new insurance special purpose vehicles (ISPVs) which will be used to issue ILS; the legal framework for ILS and the associated tax treatment; as well as providing for a "tailored and proportionate" approach to authorisation and supervision. Read more...

FCA accepts first undertaking for unfair contract term since Consumer Rights Act came into force

London General Insurance Company (LGI) has undertaken to amend a contract term in its Extended Warranty Protection Policy after the FCA found it to be unfair to customers and capable of two different meanings. LGI intended the relevant term to provide an exhaustive list of items that were covered by the policy. But the wording was confusing and led customers to interpret the list as examples of items only and as non-exhaustive. LGI agreed with the FCA's interpretation and has introduced an amended term and paid £47,000 in redress to 300 customers affected because their claims were denied due to the 'unfair term'. In its notice of undertaking, the FCA said that firms should remain alert to these undertakings as part of their risk management processes as they will show "the likely attitude of the courts, the FCA, the CMA or other qualifying bodies to similar terms or terms with a similar effect." Read more...

Lloyd's targets orderly insurance market response to catastrophic events

The Lloyd's of London insurance market has set out the principles that will guide its actions in the event of a "market-turning" catastrophic event. The six principles, set out in a new report, will encourage "stronger, smarter oversight" of the market following any future market-turning events (MTEs), according to Lloyd's. "We want to make it easier for syndicates to do business by focusing our oversight efforts on the important things," said Jon Hancock, Lloyd's director of performance management. "One important area where we can help is to make sure the Lloyd's market is in a position to act swiftly and decisively to any future market-turning events." Read more...

Principal firm had no real prospect of successfully defending a claim against acts of its appointed representative, court rules

An investment firm has failed to overturn a default judgment entered against it in favour of investors who had lost their money, on the grounds that the principal firm had no real prospect of successfully defending the actions of its appointed representative (AR).There are few cases that come to court concerning the liability of a principal firm for the loss caused by the acts of its AR, making the judgment a particularly interesting one, according to wealth management expert Bruno Geiringer of Pinsent Masons."The case is a clear reminder to principal firms to ensure that they have adequate controls over their ARs to enable them to monitor and enforce compliance with the relevant regulatory requirements for which they are responsible and undertake checks that their ARs have appropriate professional knowledge to be able to carry out the services they provide to investors," he said. Read more...

EU/US insurance agreement will be signed in weeks

It will be easier for EU insurers and reinsurers to conduct reinsurance business in the US and for US businesses to do business in the EU when a bilateral agreement is signed in the coming weeks. Local presence and collateral requirements will be fully eliminated after five years and US states will begin to reduce their collateral requirements for EU reinsurers immediately by 20% per year for five years. Group supervision requirements will be limited to only those of the 'home' jurisdiction rather than the added burden of having to comply with 'host' jurisdiction requirements. Detailed qualifying criteria and conditions apply for relevant re/insurers however including high solvency ratio requirements and own funds/capital requirements of €226million or US$250million. Read more...   

FCA lays out scope of investment platforms study

The FCA has laid out the scope of its investment platforms market study, announcing it will cover a wide range of groups and topics in a bid to assess the competitiveness of the market.The detail follows the announcement of the study earlier this year. It is designed to explore whether platforms enable retail investors to access products which provide value for money. Wealth management expert Tobin Ashby of Pinsent Masons said the study was primarily focused on platforms and equivalent online distributors, although it would consider what the FCA refer to as the "wider distribution market" relating to platforms. "The FCA seems to be focusing on platforms because they are so integral to the retail investment infrastructure. Just because platforms are at the centre of so much retail investment activity doesn't mean that they are in a position to control pricing and distribution in the way that the FCA seems to be suggesting, and platform providers will be hoping that the market study serves to confirm this," he said.  Read more...

Cost of 'extreme' cyber attack could hit $121 billion, says Lloyd's

A major global cyber-attack could trigger up to $121 billion of economic losses, according to insurance market Lloyd's of London. In an analysis of the potential economic impact of a hypothetical malicious hack on a cloud service provider, and attacks on vulnerable computer systems run by businesses around the world, Lloyd's estimated the losses could be $53bn and $28.7bn respectively on an average basis. Cybersecurity and insurance expert Ian Birdsey of Pinsent Masons said insurers were faced with significant challenges in modelling losses from cyber attacks due to lack of data. "Unlike traditional catastrophe losses due to natural causes, insurers do not have any meaningful claims data to draw on to model catastrophe cyber losses and price products. Recent events have shown how cyber attacks can proliferate quickly on a worldwide scale. The speed with which endemic cyber risk can spread across the globe means that such a cyber loss is a very worst-case scenario for insurers and can quickly become catastrophic loss," he said. Read more...

Find the briefing online here. For regular comments, news and views from the insurance team at Pinsent Masons, see our insurance content on Out-law here.

You may also be interested in:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances,

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions