The new legislation is designed specifically to facilitate Insurance Linked Securities (ILS) and similar transactions in order to enhance the Island’s attractiveness to insurance businesses.
“This new framework promises to open up new business streams for the Isle of Man and provide welcome competition in this area, particularly given our close proximity to London,” said John Garland, head of corporate financial services with the Isle of Man Government’s Department of Economic Development.
“I am confident that our framework will prove of great interest to potential users in this specialist area who want to place their business in a highly respected and responsible international finance centre,” Garland said.
‘We have been working and consulting closely with industry and the Insurance and Pensions Authority on introducing this legislation and already have enquiries in the pipeline.”
The ILS market has seen spectacular growth in recent years driven largely by a huge issuance of catastrophe bonds. According to a report by investment bank Aon Benfield Securities $9.4bn (£6.2bn) of catastrophe bond issuance was secured in the 12 months to 30 June 2014 – the largest amount in the history of the sector and an increase of 41% from the prior year.
Simon Nicholas, a partner at KPMG Isle of Man and deputy chair of the Isle of Man Captive Association said: “ILS is a very exciting and fast evolving area of insurance and the Isle of Man legislation has been market tested by several global well respected players in the ILS market, including some of those who already have a presence on the Island.
“With a promising pipeline, we expect this to complement the Isle of Man’s already successful and diverse financial services industry.”
