UK Captive Insurance Regime to Launch by 2027 with Broad Scope and Access

On July 15, 2025, HM Treasury confirmed plans to introduce a UK captive insurance regime, with implementation targeted for 2027. The decision follows a formal consultation launched in November 2024 and reflects broad industry support for strengthening the UK's competitiveness in risk financing and expanding domestic access to captive insurance solutions.

According to the official consultation outcome, the government will move forward with a framework that enables a wide range of firms to form captives and allows captives to underwrite a broad set of risks. Stakeholders emphasized that such flexibility is essential to ensuring the regime meets the needs of both large corporates and small-to-midsize enterprises.

The government also acknowledged feedback supporting the use of flexible, cost-efficient structures such as protected cell companies. These vehicles, respondents said, would open the captive model to organizations that may not have the capital or complexity to support stand-alone captives. The government committed to considering appropriate corporate structures as it develops the framework.

Regulatory oversight will rest with the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). Importantly, the government stated that it does not anticipate needing new legislation to implement the regime. It also confirmed it will not establish a bespoke regulatory framework for captive managers, believing that the current system for insurance intermediaries is adequate.

Proportionality emerged as a key theme throughout the consultation. Respondents urged that regulatory requirements align with the scale and risk profile of captives, noting that disproportionate burdens could hinder adoption. The government agreed and pledged to work closely with regulators to embed proportionality into the design and implementation of the regime.

Per a statement from Marsh, the decision to establish a UK-based captive regime "will make the UK a full-service insurance center" and enhance risk management choices for organizations of all sizes. Marsh emphasized that the new framework should enable captives to be formed as seamlessly as in other established domiciles and serve as a catalyst for innovation and global competitiveness in the UK insurance sector.

The government concluded the consultation with a clear commitment to proceed at pace and continue stakeholder engagement. Work with the PRA and FCA on policy and regulatory design is already underway, with further updates expected in the lead-up to the 2027 launch.