Clifford Chance advises Lloyd’s on the major expansion of its ground-breaking insurance linked securities platform

International law firm Clifford Chance has advised the Society of Lloyd’s on the establishment of its second Lloyd’s insurance linked securities (ILS) platform, London Bridge Risk 2 PCC Limited. The new platform is a substantial expansion of Lloyd’s existing ILS platform and its ambitions to attract new capital to the market and establishes an efficient mechanism for existing and new investors to participate at Lloyd’s for years to come. It is an exciting and significant change for the Lloyd’s market and a significant development for the wider UK ILS market.

Clifford Chance worked with Lloyd’s and the regulators to devise a structure with flexibility to accommodate a range of individual investment models and reinsurance structures. These have been designed specifically to meet Lloyd’s capital requirements and market practices, whilst also ensuring compliance by the PCC with the UK ILS regulations. It will facilitate capital efficient investment into Lloyd’s, reduce the frictional costs and time otherwise required to establish and operate a standalone ILS investment vehicle and potentially open up Lloyd’s to significant third party capital. It demonstrates PRA and FCA support for more innovative use of the UK ILS Regulations.

The appointment of Clifford Chance followed its role advising Lloyd’s on the establishment of its first ILS platform, London Bridge Risk PCC and also follows Clifford Chance’s role advising the London Market Group task force on its work with HM Treasury on the establishment of the UK ILS regime and working on UK ILS structures for SCOR, Pool Re, Brit and Neon.

The team was led by partner Cheng Li Yow, special counsel Katherine Coates and director James Cashier and, supported by partner Will Winterton on security arrangements and senior associates Nancy Li and Tess Crook.