The London Market Group (LMG) is planning to deliver an industry-backed letter to the next Chancellor of the Exchequer urging the continuation of the current government’s commitment to introducing a captive regime following the UK general election on 4 July.
The view is that the general election is likely to delay progress on the introduction of captive legislation in the United Kingdom, despite a promised captive public consultation having already been prepared.
“One of the things I’m considering is putting together a letter to the next Chancellor to join this debate that arrives shortly after they do,” said Caroline Wagstaff, CEO of the LMG, while speaking at the Airmic Conference in Edinburgh on Tuesday.
Wagstaff is hoping to get industry backing for any potential letter to the new Chancellor, and Captive Intelligence understands there is broad support for the initiative from brokers, captive managers, (re)insurers and risk managers.
“Anybody who fancies signing my letter then come and find me,” she added.
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.
“We think all the work has been done by Treasury, and all signs are that the consultation was very close to being published,” Wagstaff said.
Although the Conservatives had committed to pressing ahead with a UK captive regime, Captive Intelligence understands it is not Labour’s priority to pursue the agenda should they enter government.
Labour’s shadow treasury team have, however, been briefed on the feasibility and benefits of having a captive insurance regime in place.
“I know captive insurance companies might not be the immediate focus, but I’m really keen to reframe and keep the debate going,” Wagstaff said.
Wagstaff noted that the London insurance market brings in $160bn of GWP a year and totals 33% of the City’s gross domestic product (GWP).
“We need to be able to offer the people who are using the risk transfer services all the tools in the toolkit,” she said.
“We’re not saying it has to be UK and not somewhere else, but we want people to have the choice.”
The prospect of a UK captive regime was discussed in depth by 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.