PRA and FCA propose new captive insurance regime to drive UK growth and competitiveness

News release

Innovative new proposals aim to establish the UK as a centre for the fast-growing captive insurance market. This will support economic growth, leverage the UK market's expertise and cement its position as the location of choice for global insurance and reinsurance.  

Captive insurance enables businesses to manage their own risks through a wholly owned insurance subsidiary. The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) are consulting on a tailored and competitive regulatory framework which would enable businesses to establish their own captive insurers in the UK.  

The proposals are tailored and proportionate to the specific nature of captive insurance. Key features of the proposal include:  

• A streamlined PRA/FCA authorisation process with a target of 4-6 weeks; 
• Excluding captives from Solvency UK and Consumer Duty requirements; 
• lower capital and reporting requirements; 
• a flexible capital resources framework; 
• dedicated PRA supervisory resource; 
• specifically tailored FCA conduct requirements including proportionate supervision and reporting. 

The framework includes appropriate safeguards. For example, to protect individuals, captives would be able to reinsure, but not insure directly, employee benefits-related policies.   

David Bailey, Executive Director for Prudential Policy at the PRA, said: “This bespoke regime for captives will enhance the UK’s competitive edge in insurance. Ahead of the formal launch in 2027, we are keen to speak to any businesses that could benefit from establishing a UK-based captive.” 

Sarah Pritchard, Deputy Chief Executive of the FCA, said: “A competitive captive insurance option in the UK could benefit UK companies and support wider economic growth. Our approach is pragmatic and proportionate, with appropriate safeguards in place.” 

The consultation closes on 14 October 2026, and the regime will launch in summer 2027, after considering respondent feedback. 

Notes to editors 

• PRA CP11/26 – A tailored regime for captive insurance  
• Captives speech by Shoib Khan 16 June 2026 It’s Coming Home − speech by Shoib Khan. 
• The proposed regime is currently for “single-parent” captives only, which are used to insure or reinsure the risks of the parent company and other companies within its group. We will continue to work closely with HM Treasury and intend to consult on incorporating protected cell companies into the regime once the necessary legislation is in place.