The arrangement must also serve to ensure that the assets of the ISPVs are at all times equal to or greater than the ISPV's liabilities.
By using the cell of an existing third party PCC, the regulatory burden is minimised (though the insurer is still required to obtain a waiver from the DFSA) and the insurer can leverage off the expertise of the PCC in respect of management of the ISPV. In addition, an insurer is able to create different categories of notes using different cells known as 'cellular-asset backed securities'.
The framework exempts ISPVs from certain business and risk requirements that would be overly restrictive and inappropriate in light of the ISPVs singular function as well as its relationship with the ceding insurer.
However, Thierry et al results attracted critical attention from Bentin et al (2007) who demonstrated that the amplitude of the N170 does not vary linearly with the effect of ISPV
. They also asserted that although the ISPV
for cars and human faces are often identical, the N170 tend to be larger for faces than for cars.
FSA supervision will take place through the oversight of the ceding company rather than through separate supervision of the ISPV. In a speech in late 2006, the FSA regulator Adam (2006) stated: It is often said that reinsurance is insurance between consenting adults, and we believe that our approach to ISPVs is an extension of this general principle.
The FSA will examine to what extent risks are mitigated or transferred from the ceding company to the ISPV. This reflects a principles-based approach that will assess ISPV arrangements on a case-by-case basis and the appropriate credit will depend on how risks are managed.
For an ISPV, like a reinsurance contract and over-the-counter derivatives, the specific contract terms are fundamentally important for assessing whether there is a real risk transfer.
The FSA is concerned that some ISPVs might be established merely to achieve a form of regulatory arbitrage.
Whether or not the ISPV's risk is ultimately transferred to the capital markets through a securitization, an ISPV provides a reinsurance agreement to the ceding company, and the ceding company is able to free up capital.
Locating an ISPV in London also might bring marketing advantages.
28, the FSA had not received a single application for an ISPV yet, the FSA said.
177 CD: James Dashow, Selected Works Punti di Vista no.