FCA is consulting on the changes it needs to make to its rules to incorporate the new regulated activity of insurance risk transformation. The consultation complements FCA and PRA’s consultations on authorisation and supervision of ISPVs, which close in late February. FCA notes the Treasury’s proposal that ILS sales should be restricted to Qualified Investors only significantly mitigates the consumer protection risks that might have existed if the products had been available to retrial investors. Among the changes FCA proposes is:
- to include activities arising from the new activity within the scope of the Principles;
- to bring offering and issuing of ILS within the compulsory jurisdiction of FOS;
- to bring ISPVs within SYSC 3, like reinsurers;
- to clarify the CF11 function does not apply to ISPVs, and the CF10 function should apply only where life insurance business is involved;
- to require disclosure of FSCS coverage; and
- to introduce a new one-off PCC registration fee of £500 and require PCCs to submit new cell notifications to FCA as well as PRA.
FCA asks for comments by 14 March.