The United Kingdom government announced it is working on regulations to expand and support the captive insurance sector, aiming to implement the framework by mid-2027, according to a consultation response from the U.K. Treasury Department.
The Treasury stated that the updated regulations should proportionally lower capital requirements for captive insurers, reduce application and administration fees, speed up the authorization process, and reduce ongoing reporting requirements to match those of traditional insurers and reinsurers.
These measures seek to enhance the U.K.’s position as an international jurisdiction for insurance and risk management, while supporting broader economic growth by expanding the range of financial services available and offering businesses another risk-management option.
Marsh McLennan noted that these changes could also introduce more flexible and cost-effective solutions, such as protected-cell companies, which would benefit small and mid-sized companies in particular.
Chris Lay, CEO of Marsh McLennan U.K., stated that the new framework must enable the U.K. insurance market to sustain its reputation for innovation and ensure that captives can be formed as seamlessly as in other jurisdictions.
We need to ensure that the new captive framework will not only allow the U.K. insurance market to further demonstrate its reputation for innovation but also that captives can be formed as seamlessly as they are in other jurisdictions
Chris Lay, chief executive officer of Marsh McLennan, U.K
Lay, who previously led Marsh’s global captives business, added that he has seen how such changes help organizations manage risk more effectively.
The Treasury indicated that the regulations are unlikely to include tax incentives, arguing that these are unnecessary for maintaining a competitive and modern captive sector.
Kathryn Moore, head of nonlife at the independent insurance consultancy Broadstone, described the government’s proposal as a decisive step for the U.K.’s captive sector.
She noted that the dedicated framework, featuring lower capital and reporting requirements alongside streamlined authorization, signals the U.K.’s intent to become a global hub for captive insurance.
