Treasury pushes captive insurance decision into late summer
The Treasury will publish the outcome of the captive insurance consultation later this summer, City PM understands
In November, the UK government launched a consultation on a new regime for the captive insurance industry, which closed on 7 February.
Chancellor Rachel Reeves revealed the consultation in a speech at Mansion House.
Speaking at the time, she stated that the plan was to “make the UK insurance market a more attractive hub for businesses seeking efficient risk solutions.”
Captive insurance is a form of self-insurance in which a company establishes and wholly owns its own insurance coverage. Several large companies in the UK already have captives, but they are based in other jurisdictions, including Guernsey and the Isle of Man.
The captive insurance market has a strong hold in the US and overseas territories, including Bermuda, but over the last few years, this appetite has increased in Europe, with France the latest to introduce legislation.
Speaking last November, Caroline Wagstaff, the chief executive of the London Market Group, said: “If London is to retain its position as a global centre for risk transfer, it needs to be able to offer all the tools in the toolkit; captives are an increasingly important part of that mix.”
City PM understands that a decision from this consultation was due to be published within the next week. According to guidance from the Cabinet Office, government departments should aim to publish a response within 12 weeks of the end of the consultation period.
However, the decision won’t be published until later this summer, with no precise date yet.
When approached for comment, a Treasury spokesperson told City PM, “We are consulting on the future of the captive insurance sector to better support growth and international competitiveness.”