Commentary

D7.422 Reinsurance—Insurance special purpose vehicles: General principles

Corporate tax
Corporate tax | Commentary

D7.422 Reinsurance—Insurance special purpose vehicles: General principles

Corporate tax | Commentary

D7.422 Reinsurance—Insurance special purpose vehicles: General principles

Insurance special purpose vehicles ('ISPVs') were originally allowed under the terms of the EU Reinsurance Directive1. Although the main thrust of the UK's approach is for a light touch regulatory regime for ISPVs to allow insurance groups to access the capital markets, an ISPV may also be used as a traditional or financial reinsurer. In the latter case an ISPV may be able to offer capital and solvency benefits.

For tax purposes an ISPV is an undertaking which:

  1.  

    (a)     assumes risks from insurance or reinsurance undertakings, and

  2.  

    (b)     fully funds its exposures to those

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