Reinsurance special purpose vehicles : a detailed legal analysis

Abstract

A Reinsurance Special Purpose Vehicle is a vehicle of securitisation that is used specifically in the context of an insurance-linked securitisation transaction. Unlike other securitisation vehicles, a Reinsurance Special Purpose Vehicle is set up for the purpose of providing reinsurance coverage. Therefore the vehicle operates as a facility that bridges the insurance and capital markets. The market for insurancelinked securities is a growing market and the legislator has been quick to provide a legislative framework for the establishment of Reinsurance Special Purpose Vehicles in Malta. The Maltese Reinsurance Special Purpose Vehicles Regulations were enacted in 2013. Since then there have been a number of developments on both a European and domestic level. Commission Delegated Regulation (EU) 2015/35 provides the framework for the establishment of such vehicles within all Member States, whilst Commission Implementing Regulation (EU) 2015/462 provides for the establishment of multi-arrangement SPVs. Moreover, the Maltese legislator has recently enacted the Securitisation Cell Companies Regulations, enabling cell companies to be used as Reinsurance Special Purpose Vehicles. This is an area of law that is relatively unexplored locally. Therefore this thesis seeks to provide an overview, analysing in detail the Reinsurance Special Purpose Vehicle and the applicable legal regime. Considerations are made on a number of legislative instruments both European and domestic, whilst indicating any areas which may require fine-tuning.