Applying for authorisation in the United Kingdom as an ISPV
On Wednesday 1 November we published SS8/17 'Authorisation and supervision of insurance special purpose vehicles' setting out our approach to the authorisation and supervision of ISPVs (see below, and under 'Further information').
Becoming an authorised ISPV - the five key stages
- Pre-application engagement.
- Completeness check.
1. Pre-application engagement
The PRA and FCA (‘the regulators’) encourage prospective ISPV applicants to discuss potential proposals with the regulators prior to application. This pre-application engagement will give applicants the opportunity to:
receive early feedback from the regulators regarding their plans and highlight any potential concerns
- discuss matters such as the scope and structure of the intended ISPV, the type and effectiveness of the risk transfer, the shareholder structure of the vehicle, the proposed investment strategy, and how the requirement to be fully funded is met
- inform regulators when they should expect to receive an application
- share details of individuals identified for controlled functions – the Senior Insurance Managers Regime (SIMR) for the PRA, and the Approved Persons Regime for the FCA
Pre-application engagement is not a statutory requirement but aims to be a useful exercise for prospective ISPV applicants. An application can be sent at any time and we will use our statutory powers to reach a decision.
To initiate a pre-application discussion, contact ISPVMailbox@bankofengland.co.uk.
2. Submitting an application
Applicants should submit their authorisation application using the required forms. These forms and accompanying guidance can be found below in the ‘Further information’ section. An application should include the following:
ISPV application form – for all applicants seeking to be authorised as an ISPV
PCC application form for registration – required for applicants wishing to be authorised as an MISPV (this should accompany the ISPV application form)
SIMR application form – required for each of the individuals nominated for a SIMF role at the ISPV
Form M application form – required for each individual deemed to be 'effectively running' the ISPV but who is not a SIMF holder
- FCA Controlled Function application form – required for each individual deemed to be carrying out a FCA controlled function
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.
When submitting the forms, the applicant will need to send two hard copies and two in electronic format (via memory stick, DVD, or other method) to the postal address below, and another to the following email ISPVMailbox@bankofengland.co.uk. We will then send on the relevant information to the FCA.
Applicants will need to include a cheque made payable to the FCA for the relevant application fee as set out in the instructions at the front of the application form. The application fee is not refundable.
Please send the application to:
Prudential Regulation Authority
London EC2R 6DA
3. Completeness check
To be considered complete, an application must include all of the required forms and all of the information requested therein (please see the 'Further information' section). The information provided must be fully and correctly referenced and of sufficient quality and detail to allow the regulators to make a decision. If applicable, applicants should also address any concerns highlighted during the pre-application stage. We will notify the applicant as soon as possible after receiving the application if the submission is incomplete. Incomplete submissions will delay the final decision on approval.
Determining whether an application is capable of an accelerated assessment
Consistent with the Implementing Regulation, the PRA and FCA will make a decision on all applications within six months of receiving a complete application. We will lead in assessing the application, but will require the consent of the FCA before granting authorisation. We consider that where applications represent a relatively straightforward proposal, and are supported by good quality documentation this should allow a determination to be reached within 6-8 weeks. In addition, where effective pre-application engagement has taken place 6-8 weeks is more likely to be feasible. We will process applications as quickly as possible and approval may be possible more quickly in some circumstances. For applications that are complex or novel, applicants should recognise the need for additional review time. We may revisit these estimated timelines in the future.
Solvency II and Part 4A of FSMA set out the requirements for the authorisation of ISPVs, including the Threshold Conditions that must be met at authorisation and on an ongoing basis. It is important that applicants are available for ongoing dialogue during the application process. Delayed communication will increase the time needed to assess an application.
We will inform the applicant of our decision to authorise. If we and/or the FCA propose to refuse authorisation, we will inform the applicant of the procedure and options available to challenge the decision.
The RTR requires us to use our power under s55F FSMA to limit the scope of the regulated activities which the ISPV may carry on, determined by reference to some or all of the activities described with the application for Part 4A permission. This limitation is referred to as the Scope of Permission (SOP) and the ISPV’s future activities must be in accordance with this.