HM Treasury has published a response to the consultation conducted in August – September 2016 on proposed Mutuals’ Deferred Shares Regulations.
These would have implemented provision in the Mutuals’ Deferred Shares Act 2015 for a new type of capital to be issued by mutual insurers.
The government’s response noted that the nine responses to the consultation raised two over-arching issues:
- clarity on the applicable taxation arrangements; and
- the need for segregation of funds with ‘with-profit’ mutuals.
Following consideration of the responses and consultation with the industry, the government decided that it would not be possible to design an instrument that would adequately address all the substantive issues raised. The position may however be reconsidered if there is a change in ‘any material factors’.