Monday, February 26, 2024

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Airmic welcomes UK government commitment to captive consultation

Airmic CEO Julia Graham has welcomed the United Kingdom government’s commitment to a captive consultation in spring 2024.

The UK government announced on 22 November that it will launch a consultation on the design of a new captive framework in spring 2024, with the aim of “encouraging the establishment and growth of captives” in the UK.

“Airmic welcomes the commitment from government to hold a consultation in 2024 concerning the introduction of a captive regulatory regime in the United Kingdom,” Graham said.

She said the Association looks forward to working with government, regulators and the wider insurance community to ensure any captive legislation is “fit-for-purpose” and supervises captives “proportionately” in a risk-based solvency regime.

“Through Airmic’s Captive Special Interest Group, we represent and are in touch with a wide range of captive owners that utilise established captive domiciles around the world,” Graham added.

“We will work to collect their views on what a good UK captive domicile should look like.”

Graham has previously said the UK could offer a “unique proposition” for captives if a “proportionate and fit-for-purpose” regulatory environment is developed with long term commitment from the government.

Airmic has stated it would want to see a captive regulatory regime sit outside of Solvency II, or its successor Solvency UK, and there must be recognition that a captives are different from commercial carriers, presenting significantly lower risk to consumers and the wider financial system.

In September, a delegation of captive specialists met with the UK government’s previous City Minister, Andrew Griffith MP, at the Treasury to discuss the possible introduction of a captive regime.

The delegation and meeting was organised by the London Market Group (LMG) and Griffith, and included captive owners, brokers, insurers and the wider risk management community.

Griffith has since been replaced as City Minister by Bim Afolami MP, but the government ambition to introduce a captive regulatory framework appears to remain on track.

There is heightening momentum in Europe for more ‘home’ captive domiciling, with France leading the way with new legislation finalised this year and a consistent pipeline of new formations materialising.