What is the fit for purpose authorisation regime for ISPVs?
The rules relating specifically to the prudential regulation of ISPVs were made by the Prudential Sourcebook for Insurers Instrument 2006 (INSPRU). We intend to help develop a UK market for ISPVs by ensuring the authorisation requirements are proportionate to the risks posed. We will require less information from an ISPV than a conventional insurer or reinsurer and put greater emphasis on self-certification and senior management responsibility. Protection for consumers will be maintained through supervision of the ceding insurer, which for UK authorised firms will include the Individual Capital Assessment (“ICA”) process. We will still have to be satisfied that you will meet the threshold conditions for authorisation. We will, however, have regard to our existing knowledge of firms’ senior management, systems and controls, to aid our assessment.
