The Government has announced it is to push forward with plans to create a new framework for the captive insurance market following a consultation on the issue, which was launched back in November 2024. The news received widespread industry support. The government
anticipated that the new framework would include proportionately lower capital and reporting requirements and promote faster authorisations for captive insurers.

Announcing the move, the government said: “The government is committed to establishing a genuinely competitive, bespoke captive insurance framework in the UK, and to do so in a way that balances speed of implementation with quality.

“To achieve this, the government will support the PRA and FCA in consulting on and introducing a comprehensive framework tailored specifically for captive insurers. The PRA and FCA will design this framework in line with their statutory objectives, including giving due consideration to their secondary growth and competitiveness objectives.”

The news was greeted positively by the insurance market.

Christopher Croft, chief executive of the London and International Insurance Brokers’ Association, said: “LIIBA welcomes the Chancellor’s announcement that the government is going to progress the work to build a captives regime in UK. This will provide a valuable alternative for our members when seeking the optimal outcome for their clients’ risk management needs. It should also consolidate London’s position as the risk management capital of the world by ensuring all necessary solutions are achievable here.”

Chris Jones, chief Executive of the International Underwriting Association, said: “There is a tremendous opportunity for the UK to become a leading domicile for captive insurance companies. Both our world-class insurance talent pool and extensive financial ecosystem, in the London Market and nationwide, provide a strong foundation for this initiative.

Sean McGovern, Chair of the London Market Group, added: “This announcement is clear evidence of the government recognising the London Market’s role as a contributor to growth and delivering on commitments to support the industry as we continue to enhance the market’s world-leading position.

“British companies and public sector institutions now need to join us in encouraging the regulators to move at pace to establish an attractive and dynamic UK captive regime so they grasp the opportunities offered by the announcement today with both hands.”