Recommendation 88

Witnesses also suggested that slow authorisation processes had contributed to decisions made by firms to locate investments in competing jurisdictions. A notable example of this is the implementation of the Insurance Linked Security (ILS) regime. An ILS is a vehicle to which insurers and reinsurers can transfer risk; the vehicle then issues securities based on this risk, with investors receiving returns in the form of premium payments. 153 This product class was developed by the UK, but due to the UK’s slow authorisation of these products it has lost out on this opportunity to other jurisdictions which now have larger ILS markets. Aon noted: “Singapore copied the UK’s Insurance Linked Security (ILS) regime, … recognising the quality of the UK’s legislation. … Singapore has approved 18 ILS vehicles in a shorter period of time compared to five in the UK. As a result, in 2021 alone we believe that the UK lost out on over US$700 million of foreign investment in ILS to Singapore, because of a more agile and proportionate approach by their regulator.” 154