UK Regulators Propose Fast-Track Regime to Launch Captive Insurers

The UK's Prudential Regulation Authority and Financial Conduct Authority have jointly proposed a new regulatory regime to allow companies to establish captive insurers within the UK for the first time. Captive insurance is a form of self-insurance in which a business uses a regulated insurance subsidiary to finance risks from its own resources rather than paying premiums to a third-party insurer. There are currently no captive insurers based in the UK, and the proposals aim to change that by introducing a proportionate framework for single-parent, or 'pure', captives that insure or reinsure the risks of their parent company and group. Key features include a streamlined authorisation process targeting a four-to-six-week turnaround, exclusion from the Solvency UK and Consumer Duty regimes, and lower capital and reporting requirements, supported by dedicated PRA supervisory resource and tailored FCA conduct rules. The consultation, published in mid-July, closes on 14 October 2026. The initiative forms part of a broader government and regulator push to grow the UK's captive insurance market and enhance the competitiveness of its financial services sector, following an earlier commitment to develop such a regime.