Britain gears up to compete for captives
Britain appears on the verge of following Bermuda’s lead in establishing a classified, risk-based regulatory regime for a captive insurance industry.
Chancellor of the Exchequer Rachel Reeves has been in consultation with a number of groups, and appears to be considering Bermuda’s risk-based regulation as a model approach for British captives.
It is believed that she will announce this month a major policy shift outlining how insurance rules can change.
Proposals are expected to help London more effectively compete in the captive insurance business, with observers projecting hundreds of companies forming British captives or moving existing ones from other jurisdictions.
The Association of Insurance and Risk Managers in Industry and Commerce believes as much, stating at its annual conference in Liverpool recently: “With strong backing from Airmic and growing government engagement, the UK is now laying the groundwork for a domestic captive insurance regime, a move that could reshape risk-financing strategies for British firms.”
The organisation said the British Government was taking decisive steps moving forward with plans to create an onshore regulatory regime for captive insurance. It also said the Treasury and Bank of England have already begun forming consultation groups and inviting industry participation.
Strategic Risk reported that while speaking at the conference, Airmic CEO Julia Graham said: “We’ve been given a very special place with the Bank of England in terms of consultation … it was the Bank of England that told me that the language we’re using has … their approval, and that they’re happy for us to be bullish.”
She said: “We do expect it to happen. Otherwise, we wouldn’t be planning and wasting lots of time putting those plans in place.”
The HM Treasury consultation included input and a 22-page report from Airmic that called for a class-based or graded regulatory regime comparable to models in Bermuda and Singapore.
With captives growing in scope and strategic importance, some industry observers believe London could quickly become among the largest captive domiciles.