On Aug. 3, UK Lloyds said regulators approved a second Lloyd's PCC.
Lloyd’s announced it has received regulatory approval from the PRA and FCA to set up a second protected cell company (PCC), building on the success of London Bridge Risk.
Follows UK Lloyds Jan. 2021 on capital special purpose vehicle approval, see #95489.
Second Protected Cell Company
The second London Bridge PCC (LB2) will offer extensions in coverages it can write and the way obligations can be funded; improved execution of collateralized transactions.
LB2 will provide an access point for qualifying institutional investors, to deploy funds in a tax transparent way into the Lloyd’s market; and for a syndicate, it will be able to provide collateralized reinsurance, on both an excess of loss and quota share basis.
Members/managing agents will be able to use new vehicle to manage capital and risk management requirements, attracting sources of capital and reinsurance protection.
LB2 authorized to undertake 3 additional capabilities: for a corporate member, as well as writing quota share reinsurance, it will be able to write excess of loss coverages.
For all structures it will be able to fund the reinsurance obligation through the offer, by the segregated cells of the PCC, of either preference share or debt securities.
Lloyd’s developed terms for principal transaction documentation With PRA and FCA, in order to provide more commercial flexibility while maintaining regulatory compliance.
Scope of permissions enables new cells to be set up and reinsurance written without need for additional regulatory approval, providing these permissions are complied with.
The insurance management services for LB2 to be provided by Artex Capital Solutions, market leaders in management of ILS vehicles, operating across multiple jurisdictions.
