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Marsh backs UK captive insurance rule proposal, citing flexibility

The broker said regulators are also signaling a role for protected cell companies and captive fronting, while warning that more details are needed for employee benefits and joint venture ownership thresholds.

Reported · Written up by our desk · Industry & Deals

Marsh, the risk advisory, insurance broking and reinsurance services firm, said it welcomes a new UK consultation from the Financial Conduct Authority and Prudential Regulation Authority on creating a UK captive insurance regime.

In a statement, Marsh said the push for regulator engagement over the coming months could build sustained momentum for a framework it expects to help organizations manage risk more effectively and improve resilience amid volatility, emerging risks and capacity constraints.

Marsh highlighted proposed features including allowing captives to combine direct insurance and reinsurance activities within a single legal entity, avoiding blanket restrictions on ownership by particular sectors, and permitting fronting for compulsory classes where appropriate.

The broker added that Protected Cell Companies are still part of the longer term ambition, alongside a simpler, more proportionate approach to capital and solvency that reflects captives' risk profiles. It also said the consultation leaves open items that may require refinement, including the scope of international employee benefits arrangements, practicalities of certain regulatory frameworks, and ownership thresholds for joint ventures, and it noted that redomiciliation implementation details are not yet fully clear for overseas captives.

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