Captive industry awaits major UK announcement as regulatory shift looms
The UK Government is getting ready to introduce a new captive insurance regime in the UK, according to multiple reports in the media, including Bloomberg UK, that all cite sources that are familiar with the matter.
According to these reports, which are as yet unverified, Rachel Reeves (pictured), the UK’s Chancellor of the Exchequer, is set to make an announcement at her Mansion House speech on July 15.
Potential changes to UK financial legislation to make it more captive-friendly have been raised before and a recent consultation on captives, announced by Reeves in November 2024, has sparked considerable debate across the industry.
There were indications that an announcement was close to being made at the start of June and at the annual AIRMIC conference this year a decision was said by organisers to be imminent at the event, however no announcement was subsequently made.
More than 700 captive insurers could be formed in the UK or could move onshore from jurisdictions like Bermuda or Guernsey if British authorities adopt a light touch regulatory regime, it has been claimed.
On Friday February 7, 2025, the UK Government formally closed the Treasury’s consultation period on the potential for a new approach to captive insurance companies, with the aim of supporting the competitiveness of the UK insurance sector.
The UK Government posed 17 specific questions in the document that announced the consultation, with the questions ranging from what sort of companies might be interested in establishing UK captives to how should captive managers be regulated for conduct and competence to ensure the robustness of the approach and encourage the growth of a UK captives market.
From the opening of the period, on November 24, 2024, to its closing, anyone with an interest in the consultation could submit their views to the Treasury.
Research commissioned in 2024 by trade body the London Market Group found that lighter-touch regulations could see almost 700 captive insurers either moved onshore, from jurisdictions such as Guernsey and Bermuda, or set up in the UK.
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