The commercial insurance market and the Bank of England are in discussions over simplifying rules for captives in the UK, according to Caroline Wagstaff, CEO of industry body the London Market Group.
Wagstaff told a Westminster Business Forum event that there was “a clear opportunity” for the UK around captives, but regulators needed to review their “one size fits all” approach geared to retail consumer protection.
“The best experts sit in London, but the UK does not actually have any captives within our jurisdiction,” Wagstaff said, according to reports.
“We don’t have the right regulatory environment,” she added.
“The biggest change that we will be looking for is less about rules and more about behaviours and culture.”.
Any final decision would be up to the UK government, according to the Bank of England Prudential Regulatory Authority head of insurance policy Alan Sheppard, who was also at the event. Captives represented “quite limited risks” to the regulator’s objectives, he said, and the regulator was “neutral” on the issue of encouraging the market.
Bank of England’s insurance policy head said.
The comments follow the House of Lords Industry and Regulators Committee earlier this month calling on the government to put greater emphasis on competitiveness in insurance regulation.
In a letter to the Economic Secretary to the Treasury, the committee said “inflexible” regulation was a barrier to the sector. The financial services minister John Glen has previously noted that captives regulation in the UK is “ripe for further work”.
The government is expected to outline proposed changes in a consultation paper later this month.
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