The UK insurance industry has called on the government to implement lighter regulations for captive insurance companies in order to fill the gap within the specialist insurance market in London, as reported in an article by the Financial Times.
The call comes before a planned government consultation that aims to design a new framework to encourage the establishment and growth of captive insurance companies in the UK. The consultation was announced in November.
Chris Lay, the chief executive of Marsh McLennan UK, said that the current regulatory environment is stopping the UK from being a viable location for captive insurance vehicles and the government should show how it will be welcoming for new businesses.
Research commissioned by the London Market Group found that lighter-touch regulations could potentially result in nearly 700 captive insurers either moving onshore, from jurisdictions such as Guernsey and Bermuda, or setting up in the UK.
“There are lots of good reasons why companies would want to come to the UK, but we can’t take it for granted that if we build it, they will come,” said Caroline Wagstaff, London Market Group’s chief executive.
Thegovernment has said that it is aiming to gather views on proposals in order to make a new UK captive insurance regime that is attractive and competitive enough to work for businesses.
While the Bank of England has yet to make a comment on the call, the Prudential Regulation Authority’s Sam Woods has stated that lighter treatment for captives was worth looking into.
However, he also said that if the growth of a UK captive insurance market was a priority for policymakers, the regulator may be in need of more staff.
