’A competitive captive insurance option in the UK could benefit UK companies and support wider economic growth,’ says deputy chief executive
The Prudential Regulation Authority (PRA) and FCA have proposed a “tailored and competitive regulatory framework” that would enable businesses to establish their own captive insurers in the UK.
Captive insurance enables businesses to manage their own risks through a wholly owned insurance subsidiary.
The PRA and FCA said it was consulting on new proposals that aim to establish the UK as a centre for the captive insurance market.
These include a streamlined PRA/FCA authorisation process with a target of four to six weeks, excluding captives from Solvency UK and Consumer Duty requirements, lower capital and reporting requirements, a flexible capital resources framework, dedicated PRA supervisory resource and specifically tailored FCA conduct requirements including proportionate supervision and reporting.
The regulators said this will ”support economic growth, leverage the UK market’s expertise and cement its position as the location of choice for global insurance and reinsurance”.
Sarah Pritchard, deputy chief executive at the FCA, said: “A competitive captive insurance option in the UK could benefit UK companies and support wider economic growth. Our approach is pragmatic and proportionate, with appropriate safeguards in place.”
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The consultation closes on 14 October 2026. After considering respondent feedback, a new captive regime will launch in summer 2027.
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Broker Marsh said the consultation is a ”significant milestone for the UK insurance market and, if delivered in a competitive and proportionate way, could strengthen the UK’s position as a credible onshore home for captive risk financing”.
James Addington Smith, chief executive at Marsh Risk UK, said: “We welcome the continued progress towards a UK captive insurance regime.
”Over the next three months, we will work closely with government and regulators to help shape a framework that is proportionate, competitive and practical to implement, positioning the UK as a high quality domicile for captives and delivering meaningful value for clients and for the wider market.”
Airmic chief executive Diane Maxwell added that the ”detail set out by the PRA and FCA in the consultation reflects many of the priorities that our members have consistently highlighted and we welcome this important step in establishing a UK captive regime”.
”It is an important tool for businesses looking to manage risks and for the UK to remain resilient and competitive,” she said.
Caroline Wagstaff, chief executive at the London Market Group, concluded: “I am delighted that the PRA has demonstrably listened to the needs of the captive community in producing this consultation.
”It has an ambitious approval timeline which is to be commended and is vital to the UK being a globally competitive regime.”
His career began in 2019, when he joined a local north London newspaper after graduating from the University of Sheffield with a first-class honours degree in journalism.
He took up the position of deputy news editor at Insurance Times in March 2023, before being promoted to his current role in May 2024.View full Profile
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