The UK government 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 United Kingdom, according to today’s Autumn Statement by the Treasury.
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 potential 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.
“The LMG is delighted by the announcement today by the Treasury that it will consult on the creation of a UK captive regime by spring next year, taking on board the recommendations within our Plan for the Future,” said LMG CEO, Caroline Wagstaff.
Wagstaff said that as the global centre for risk transfer, London needs to be able to offer “all the tools in the toolkit”, so this is a “great step forward”.
“We look forward to working closely with the government and regulators to ensure the UK remains a highly competitive insurance centre,” she added.
Chris Lay, UK CEO at Marsh McLennan, said the company welcomes the Treasury’s consultation on the establishment of a UK captive framework.
“An ambitious regulatory model for captives, combining a proportionate risk-based solvency regime with London’s global reinsurance market and the UK’s wider financial services ecosystem, could make the UK a unique and attractive location for captive investment globally,” he added.
Speaking on episode 94 of the Global Captive Podcast, Wagstaff explained why the group is lobbying for this initiative, while Charles Winter, head of strategic risk consulting at Aon Global Risk Consulting, noted what made a successful domicile and the potential appeal of the UK.
Airmic CEO Julia Graham said in September that 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.
There is growing 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.