LONDON, June 27 (Reuters) - Britain will be on track to become a centre for insurance-linked securities such as catastrophe bonds later this year, after regulations are brought before parliament in the next few weeks, minister Stephen Barclay said on Tuesday.
Britain’s insurance industry has been pushing to set up a catastrophe bond market to take on rival centres such as Bermuda, which already have regulations in place to allow the repackaging of large risks like hurricane insurance as debt instruments.
“The regulations are now being finalised so they can be laid in parliament before the summer recess, with a view to the regime coming into force in the autumn of this year,” Barclay, whose official title is Economic Secretary to the Treasury, said in a letter to lobby group the London Market Group.
Catastrophe bonds and other insurance-linked securities are popular investments for pension funds due to their high yield compared with traditional asset classes.
Catastrophe bond issuance totalled $5.8 billion in 2016, according to broker Aon Benfield.
Reporting by Carolyn Cohn. Editing by Jane Merriman