Applying for authorisation as an ISPV
There are five key stages to becoming authorised as an ISPV:
- Getting started
1. Getting started
Before submitting an application, we encourage parties to read Supervisory Statement 8/17 – ‘Authorisation and supervision of insurance special purpose vehicles’ (SS8/17) and the FAQs, and familiarise themselves with the relevant legal and policy material (set out in Chapter 1 of SS8/17) that form the requirements ISPVs must meet.
The applicant will need to demonstrate it meets all the conditions for authorisation listed in Article 318 of the Commission Delegated Regulation (EU) 2015/35 (the ‘Delegated Regulation’). Particular importance is placed on compliance with Articles 319-321 of the Delegated Regulation, which relate to the requirements on the ISPV to be ‘fully funded’, ensure ‘effective risk transfer’ and ensure subordination of the ‘rights of the providers of debt or financing mechanisms’. Additionally, an MISPV must also demonstrate compliance with Article 7 of Commission Implementing Regulation (EU) 2015/462 (the ‘Implementing Regulation’).
In SS8/17 and the ‘FCA Statement – authorising and supervising insurance special purpose vehicles’ the PRA and FCA, respectively, outline their approach and expectations to authorising ISPVs, including the relevant parts of the PRA Rulebook and FCA Handbook, respectively, which must be met. Further, the ISPV must also meet the relevant provisions in the Risk Transformation Regulations 2017 (RTR), and FSMA, including the PRA and FCA Threshold Conditions.
For any queries on matters not included in the above please email: ISPVMailbox@bankofengland.co.uk.
More information and guidance on the requirements ISPVs must meet, the responsibilities of the PRA and FCA, the parties which may apply for an ISPV, and other useful material can be found in the FAQs and SS8/17. Links to these documents are included in the Key resources below.
An application may be submitted at any time, but the PRA and FCA offer prospective applicants the possibility of a joint pre-application meeting prior to formal submission. This is not a mandatory part of the authorisation process, but in our experience it can make the review process quicker and simpler once a formal application is subsequently submitted.
The aim of a pre-application meeting is to:
- Allow a preliminary discussion of the proposal, including any plans for future transactions in the case of an MISPV.
- Ensure a clear understanding of the application process and requirements.
- Identify any key issues or novel proposals which might form priority areas for review.
- Understand the target timeframes for approval.
- Discuss and agree working arrangements between the prospective applicant and the regulators during the application stage.
To initiate a pre-application meeting, please email: ISPVMailbox@bankofengland.co.uk.
More information and guidance on the pre-application stage in the FAQs and SS8/17. Links to these documents are included in the Key resources below.
Parties should submit their application for authorisation using the required forms. These forms and accompanying guidance can be found in the Key resources section. As outlined in the ISPV Application Form, an application should be submitted electronically to ISPVMailbox@bankofengland.co.uk, and include the:
- ISPV Application Form itself;
- appropriate supporting documents;
- SMR Application Forms and accompanying documentation;
- FCA Controlled Function Application Form(s) where applicable;
- Application Form for Registration of Protected Cell Companies where applicable; and
- remittance advice and payment details of the application fee if you have paid by BACS payment, or a cheque covering the application fee.
Note: In the UK, an MISPV must be incorporated as a Protected Cell Company (PCC) pursuant to Rule 4.2 of the Insurance Special Purpose Vehicles Part of the PRA Rulebook.
More information and guidance on application timeframes, documentation requirements, application fees, and the application process in the FAQs and SS8/17. Links to these documents are included in the Key resources below.
The PRA will acknowledge receipt of the application and forward it on to the FCA. The PRA and FCA will be in touch regularly with the applicant during their assessment to explain what progress is being made. If there are any concerns or questions, these will be communicated to the applicant at the earliest opportunity. Applicants are offered the possibility to have regular joint calls with both the PRA and FCA to discuss progress and address questions.
The PRA and FCA will assess applications against the requirements set out in the Getting started section. During the assessment stage we will discuss with the applicant the progress of our review and explain the date by which we expect to be able to make a decision.
Scope of Permission
Under Regulation 7 of the RTR, the PRA is required to limit the scope of regulated activities which an ISPV may carry on. This is achieved by issuing a Scope of Permission (SOP) to the ISPV upon approval. During the assessment stage the contents of the SOP will be agreed on a case-by-case basis between the applicant and the PRA.
Where an ISPV wishes to perform activities that are outside its current SOP, it can apply to the PRA for approval for the SOP to be updated post-authorisation. An ISPV should do this by submitting an application for a variation of permission (VOP) using the ISPV VOP Application Form.
More information and guidance on the SOP, VOP, and the assessment of other specific transactional features in the FAQs and SS8/17. Links to these documents are included in the Key resources below.
Once a decision on the application has been made the PRA will inform the applicant as soon as possible, via email or phone call.
Upon authorisation certain basic information about the ISPV will be uploaded to the Financial Services Register, and therefore these details will be in the public domain. The details uploaded include information on the ISPVs permitted regulated activities, any approved persons, eg SMF directors, and other basic details. It may take up to one working day for this information to show on the register. Note that the SOP is a not a public document and is therefore not uploaded.
Once authorised, the ISPV is responsible for ensuring its ongoing compliance with the requirements, and more detail on the supervisory and reporting requirements are outlined in the Ongoing supervisory and reporting requirements section below. In addition, there are notification requirements imposed on MISPVs and these are also outlined in the MISPV/PCC notification requirements section below.
More information and guidance on the authorisation process in the FAQs and SS8/17. Links to these documents are included in the Key resources below.