The government has initiated work on a review of national security capabilities, in support of the ongoing implementation of the National Security Strategy and Strategic Defence and Security Review (NSS & SDSR) which was published in November 2015.

The work will be led by Mark Sedwill, the National Security Adviser, with individual strands taken forward by cross-departmental teams, and will be carried out alongside continued implementation and monitoring of the 89 principal commitments set out in the NSS & SDSR.

The national security capability review will include examination of the policy and plans which support implementation of the national security strategy, and help to ensure that the UK’s investment in national security capabilities is as joined-up, effective and efficient as possible, to address current national security challenges. The review will also be informed by work which has already been commissioned in response to recent national security-related incidents.

The government is committed to report annually on progress in implementing the NSS & SDSR, and published its First Annual Report on implementation in December 2016. Further progress on implementation of the NSS & SDSR, and related work, will be reported in the Second Annual Report after the end of the second year of implementation.

As detailed in the First Annual Report, the government will set out in subsequent annual reports where a significant change of approach in implementing the NSS & SDSR is considered necessary as a result of changes to the national security environment.

New regulations, published today (20 July 2017), introduce a competitive regulatory and tax regime for Insurance Linked Securities which will ensure that UK gets a share of this rapidly growing market.

Insurance Linked Securities allow insurance and reinsurance firms to transfer risk to the capital markets, meaning that risk can be managed more effectively for businesses and consumers.

Insurance Linked Securities, sometimes known as catastrophe bonds, are normally used to insure against extreme risks, such as earthquakes and hurricanes.

Over $80 billion of Insurance Linked Securities have been issued to date, with over $10 billion issued in 2017 alone. It is a rapidly growing market with research showing that it could grow to an estimated $87 billion by 2019. The regulations will be laid before Parliament after summer recess and will come into force in the autumn of this year.

They set out how to establish special vehicles to issue Insurance Linked Securities, the legal framework for Insurance Linked Securities, and the associated tax treatment. The regulations also provide for a tailored and proportionate approach to authorisation and supervision.

By publishing these regulations today the UK government is giving the insurance and reinsurance industry greater certainty in how the new regime will work– enabling them to be on the front foot in preparing for the new rules when they come into force in autumn.

Economic Secretary to the Treasury, Stephen Barclay said:

This new bespoke regime for Insurance Linked Securities will ensure the UK remains the most competitive insurance and reinsurance hub in the world.

This global business is evolving rapidly and we are determined to make sure we’re part of this evolution.

Malcolm Newman, Chairman of the London Market Group’s ILS Taskforce said:

The new ILS framework offers a very exciting future for the London Market to continue to deliver innovative new products that make a real difference. I am proud that the LMG has helped lead the development of these proposals.

We believe there is a real appetite in the London Market to invest in ILS products which will bring investors to the UK and make a significant contribution to growing the UK’s trade.