Insurance linked securities (ILS) are financial instruments where the value of the security is linked to an insurable loss event. ILS structures are typically used by insurers and reinsurers as a form of risk mitigation, to transfer risks on their balance sheets to capital market participants through insurance special purpose vehicles (insurance SPVs, ISPVs or ILS vehicles).

This note provides an overview of the UK legal and regulatory framework for ILS and ISPVs.