The Financial Conduct Authority (FCA) is expanding its ongoing work in the captives insurance market to encompass a UK captives insurance regime.
It has already begun its work alongside the Prudential Regulation Authority (PRA) by launching a series of subject expert groups in the second half of this year and confirmed plans for a consultation in summer 2026 with implementation of the regime in mid-2027.
The initiative on captives insurance has been led by HM Treasury (HMT) as it aims to expand the reach of the market in the UK.
In July, HMT included the group life and employee benefits sector in its plans for the new UK captives insurance regime, having been excluded from the original proposals in November 2024.
Adding the UK captives insurance regime to its regulatory initiatives grid, the FCA said there would be engagement every quarter up to and including July to September 2026, but it did not know what the impact on firms would be.
“The FCA and PRA are developing a proportionate authorisation and regulatory regime for captives to support Treasury’s plans to grow this market,” the regulator said.
“Captive insurance is a means of self-insurance and risk management by commercial entities and, less often, by public organisations.
“The authorities will launch a joint consultation in summer 2026 on the rules and policies for an effective and competitive UK captive insurance regime. They have conducted subject expert groups with stakeholders, to gather feedback for policy development and technical matters.”
The group life industry welcomed its inclusion in the government’s captives framework in July, but it is not expected to have a major impact on the industry or country unless further benefits are included.
It also noted many captive regimes were already highly established and further incentives may be required to make the regime more enticing.
