Momentum remains behind UK captive efforts

Prime Minister Sir Keir Starmer confirmed the appointment of new City Minister Tulip Siddiq on 9 July, and the London Market Group (LMG) has submitted a letter backed by UK brokers, captive managers, insurers and Airmic calling for the planned consultation to be published to gauge industry response and backing.

"In a world of increasing complexity, velocity of change and opportunity, the London insurance market is more important than ever,” Julia Graham, Airmic CEO, noted. “It makes good business sense for the UK to harness the experience, talent, and reputation of the London insurance market to provide the foundation for a UK captive regime."

Any UK captive regime would be focused on attracting new captive formations by UK companies, but there is interest in some re-domestications from established domiciles such as Guernsey and the Isle of Man, which are both home to a large contingent of UK-owned captives.

The UK is also expected to bring its own appeal for non-UK multinationals, considering the concentration of service providers and expertise in the London market, with the caveat that a proportionate captive regime is designed and implemented.

Pre-election, Labour’s shadow Treasury was briefed on the feasibility and benefits of having a captive insurance regime.

Siddiq, the new City Minister who is responsible for overseeing the financial services sector, including the insurance industry, has previously said she wants to encourage the Financial Conduct Authority to try harder to remove barriers to competitiveness and growth.

"The Airmic membership is well served by several high quality and established captive domiciles, but having the option of a fit-for-purpose ‘home’ domicile in the United Kingdom could be a compelling addition to that list,” Richard Cutcher, Airmic Captives Ambassador, said. “We hope the Government will publish the consultation so a wide range of views can be submitted by Airmic, our members and the wider risk and insurance community."

It is important to note that the initiative to introduce a bespoke regulatory regime for captives in the UK is entirely separate from the Captive Syndicate project at Lloyd’s. In the case of Lloyd’s, a captive will operate within Lloyd’s exactly like a traditional syndicate and would be overseen by the market, while a UK captive would be regulated directly by the Prudential Regulation Authority (PRA).

However, the two UK-based captive propositions are expected to complement each other.