Last November HM Treasury published for public comment the Regulations that will introduce the new regulatory and tax framework for insurance special purpose vehicles (ISPVs), also known as insurance linked securities vehicles. The comments have been considered and HM Treasury's response was published earlier this month: see here (pdf). Final Regulations (subject to Parliamentary approval) have also been published: see the Risk Transformation Regulations 2017 (pdf) and the Risk Transformation (Tax) Regulations 2017 (pdf). The Prudential Regulation Authority has also published an update on its related consultation concerning the authorisation and supervision of ISPVs: see here (pdf).HM Treasury have decided that a protected cell company structure should be provided for multi-arrangement ISPVs. The duties of directors of protected cell companies will largely be the same as for directors under the Companies Act 2006. However, additional duties will be owed and section 172 of the 2006 Act will apply in modified form: the Risk Transformation Regulations 2017 explain that the reference in section 172(1)(f) to members should be regarded as a reference to shareholders and that the need to act fairly between shareholders of the protected cell company should be separately assessed for each part of the protected cell company.
The Regulations also provide for the powers of directors: they have such powers as (a) are necessary to fulfil their duties; or (b) are conferred upon them by the protected cell company’s instrument of incorporation.
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