Efficient use of capital is a fundamental requirement in the insurance/reinsurance markets. The global nature of the capital market means new capital structures and regulatory changes in one jurisdiction can have significant effects in other jurisdictions. The Financial Services Authority (FSA) has recently completed a review of the issues in setting up an authorisation process in England for insurance special purpose vehicles (ISPVs).
This exercise is part of the implementation of the Reinsurance Directive and is, in part, prompted by the need to maintain London as a competitive market for insurance capital in competition with other jurisdictions that may be perceived to have significant financial advantages.
