UK Lloyds Protected Cell Company

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.

Regulators UK Lloyds
Entity Types Corp; Ins
Reference PR, 8/3/2022
Functions Complaints; Compliance; Financial; Legal; Operations; Outsourcing; Reporting; Risk
Countries United Kingdom
Products Corporate; Insurance; Securities
Regions EMEA
Rule Type Guidance
Rule Date 8/3/2022
Effective Date 8/3/2022
Rule Id 144934
Linked to Rule :95489
Reg. Last Update 8/3/2022
Report Section UK

Last substantive update on 08/04/2022