PRA and FCA consult on captive insurance regulatory framework
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Insight Article 2026年7月28日 2026年7月28日
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英国和欧洲
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Regulatory movement
On 14 July 2026, the PRA and the FCA published consultation papers (CP11/26 and CP26/29, respectively) setting out proposals for a new regulatory framework for captive insurers in the UK.
Broadly, the proposed regime covers:
- A framework for single-parent (“pure”) captives, which can write insurance business on both a direct and reinsurance basis, subject to certain lines of business limitations as detailed in the consultations (e.g. compulsory lines, employee benefits, generally reinsurance basis only).
- The proposed regime includes: lower capital and reporting requirements; faster, simpler authorisation processes (PRA authorisation, with the FCA’s consent), with a target timeline of four to six weeks; and simplified governance requirements including a single senior manager function, all reflecting the typically lower risk profile of captives (i.e. aligned interests between the captive and its parent, although the consultations note that this can also give rise to conflicts of interest – boards must demonstrate that conflicts are appropriately managed).
- The proposed regime would sit outside Solvency UK. The PRA proposes to establish ‘UK captive insurer’ as a distinct category of insurer in its Rulebook, meaning that there would be three main types of UK insurers for PRA Rulebook purposes: Solvency UK firms; non-directive firms; and UK captives.
- FCA Consumer Duty requirements would also not apply to the proposed regime.
- The consultations do not cover protected cell company (PCC) captives. The regulators plan to consult on extending the regime to PCCs, once the necessary legislation is in place. Also, while not part of these policy proposals, the PRA has asked for views on group and association captives, “to gauge interest and to assess any additional risks pertaining to these structures…for potential future policy development.”
Both consultations close on 14 October 2026, with implementation expected in mid-2027.
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