Wednesday, July 24, 2024

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Early UK election expected to delay domestic captive regime

News that UK Prime Minister Rishi Sunak is calling an early general election could delay progress on the introduction of captive regime in the United Kingdom.

Conversative PM Sunak announced this afternoon that an election will be held on 4 July, with the Labour Party holding a significant lead in the polls and expected to get the keys to 10 Downing Street.

Captive Intelligence has reported extensively over the past 12 months on the prospect of a new regulatory framework for captives in London, with the current Conservative government committing to a consultation this spring.

That consultation has yet to be published, but the London Market Group had successfully lobbied Treasury and MPs interested in financial services and the insurance market to get it on the agenda.

Primary legislation should not be needed to amend the insurance rules that would introduce a regulatory framework tailored to captives, but any changes would require a pro-active approach from the government of the day.

While the Conservatives had committed to pressing ahead with the project, Captive Intelligence understands Labour does not have it as a priority to pursue should they enter government.

Labour’s shadow treasury team have, however, been briefed on the feasibility and benefits of having a captive insurance regime and the London Market Group remains committed to the project.

“Our data shows that London is the leading risk transfer market in the world,” Caroline Wagstaff, CEO of the London Market Group, said.

“We very much hope the next government helps us to capitalise on that by ensuring that we can offer clients all the tools in the tool kit and rapidly progressing a UK captive regime. It is a quick win for demonstrating a commitment to growth and competitiveness and would make an important contribution to the UK economy.”

The prospect of a UK captive regime was discussed in depth by LMG CEO Caroline Wagstaff and Aon’s Charles Winter in episode 94 of the Global Captive Podcast, while Chris Lay, CEO of Marsh McLennan UK, co-authored an article in January explaining why the broker was supporting the initiative.

Lay also featured in a GCP episode with Marsh colleagues William Thomas-Ferrand and Matthew Latham debating what would make a successful UK captive domicile.