CP26/29: A tailored regime for captive insurance

Read CP26/29 (PDF)

Read PRA's CP11/26

Why we are consulting

We're consulting, alongside the Prudential Regulation Authority (PRA), on a new bespoke regulatory framework for captive insurance in the UK. The two papers together form a coherent overall framework for captive insurance in the UK.

Captive insurance is a method of self-insurance, where a business uses a regulated insurance subsidiary to finance risks from its own resources rather than paying premiums to a third-party insurer.

Currently there are no captive insurers established in the UK, and businesses wishing to use this structure typically set up captives in other jurisdictions. Our proposals would introduce a proportionate conduct framework for single-parent captives - sometimes called ‘pure’ captives - that reflects their distinct business model and lower risk profile, making the UK a more attractive location for businesses to establish or relocate a captive insurer.

Who this is for

This consultation is primarily aimed at:

• Existing insurers and reinsurers, particularly those exploring captive insurance structures, ceding business to them or reinsuring them.
• Insurance intermediaries providing, or planning to provide, insurance and risk management services to corporates. 
• Advisory firms, including captive managers who support clients in feasibility studies and applications for establishing captives. 
• Professional services providers, including legal, actuarial, and advisory firms.
• Trade bodies and industry groups. 
• Other regulators and public authorities with an interest in the UK insurance market.

Next steps

Online response form 

The consultation closes on 14 October 2026. We welcome responses from anyone with an interest in these proposals.

How to respond:

You can respond using the online form on our website.

Alternatively, you can write to us at:
Shimla Rizan
General Insurance and Pure Protections Risk and Policy
Financial Conduct Authority
12 Endeavour Square London E20 1JN

Email: [email protected]
Telephone: 020 7066 1000

After the consultation closes, we'll consider all responses and publish a Policy Statement setting out our final rules and our responses to feedback received.

You can respond to the PRA’s consultation paper as follows.

Email: [email protected]

Or write to:
Insurance Policy Division
Prudential Regulation Authority
20 Moorgate
London
EC2R 6DA 

Background

The government has been clear it wants the UK to grow its financial services sector and improve its international competitiveness. The Chancellor’s remit letter to the FCA encouraged the FCA to support the government's growth mission and to create a regulatory environment that enhances the UK's position as a world-leading global finance hub.

In response, the FCA and PRA have worked together - including through subject expert groups (SEGs) made up of captive owners, brokers, captive managers and industry bodies - to develop these proposals.

Our proposals are designed to be proportionate to the risks captive insurers actually pose. Because captives generally only insure or reinsure risks within their own group, they present lower risks to market integrity and consumer protection than conventional insurers.