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UK regulators propose faster, lighter rules for captive insurers
The PRA and FCA set a 4 to 6 week target for captive authorizations and plan a new regime launch in summer 2027.
The UK Prudential Regulation Authority and Financial Conduct Authority have proposed a new regulatory framework for captive insurance, aiming to make it “tailored and competitive” to encourage more businesses to form their own wholly owned insurance subsidiaries in the country.
The proposal includes a streamlined authorization process with a target timeline of 4 to 6 weeks, along with lower capital and reporting requirements and a flexible capital resources framework, supported by dedicated PRA supervisory resources.
Under the plan, captives would be excluded from Solvency UK and Consumer Duty requirements, while conduct requirements would be specifically tailored, including proportionate supervision and reporting by the FCA.
The regulators also outlined safeguards, including allowing captives to reinsure but not directly insure employee benefits-related policies, to help protect individuals. The consultation closes October 14, 2026, and the regime is expected to launch in summer 2027, after reviewing feedback, Reinsurance News reported.