UK's FCA and PRA Propose New Captive Insurance Regime to Boost Competitiveness

The UK's Prudential Regulation Authority and Financial Conduct Authority have proposed a new regulatory regime for captive insurers, part of a government-backed effort to make Britain a more attractive base for these vehicles and bolster the international competitiveness of its insurance industry. A captive is an insurer set up by a company or group to underwrite its own risks rather than buying all its cover from the commercial market, giving large organisations greater control over pricing, capacity and risk management. Many multinationals currently domicile their captives in other jurisdictions, and the UK regime is intended to offer a streamlined, proportionate framework, with safeguards, that could draw some of that business onshore. Regulators described their approach as pragmatic and calibrated to the lower-risk nature of captives, which typically insure the risks of their own corporate groups rather than the public. The consultation closes in mid-October 2026, with the regime expected to launch in the summer of 2027 after feedback is considered. Supporters argue a competitive captive framework could deepen the UK's insurance ecosystem, supporting related professional services and expertise. The proposals form part of a wider push by the regulators to advance their objective of promoting growth and competitiveness alongside their core duties.