The Financial Services Authority (FSA) is looking at the development of new rules to establish U.K.-based insurance special purpose vehicles (ISPVs). This puts the sector in step with other offshore jurisdictions. The proposals form part of a wider consultation on the implementation of the European Union reinsurance directive (RID) due to be implemented by December 10, 2007.

The introduction of an ISPV regime would allow insurers to manage their capital more efficiently and potentially open the field to a greater variety of reinsurance structures in the U.K. similar to the catastrophe bonds and companies that are set up to underwrite for a limited period only.

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