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UK Overhauls In-House Insurance Regulations to Attract Captive Insurers
NewJuly 17, 202503:39

UK Overhauls In-House Insurance Regulations to Attract Captive Insurers

The UK government is making major changes to in-house insurance rules to bring back hundreds of captive insurers. This could boost the economy and make the UK a more competitive place for businesses.

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The UK government is overhauling the regulation of in-house insurance to make it more attractive for companies to set up captive insurers in the UK. Captive insurers are entities that companies create to manage their own risks, such as lawsuits or cyber attacks, rather than purchasing external insurance. The government is reducing capital requirements, making it easier and less costly for companies to establish these in-house insurance entities. This move aims to prevent companies from setting up these insurers in offshore locations like Bermuda and the Cayman Islands to avoid heavier regulations. Initially, the government was concerned about potential financial stability risks and regulatory arbitrage, but it has now struck a balance by allowing captives for specific uses like protecting property. The insurance community, including the London Market Group, supports these changes, which could bring nearly 700 captive insurers back to the UK. This could be a significant boost for the UK economy, particularly for the insurance sector, which contributes about a third of the City’s economy and employs around 60,000 people. Major companies like Shell and Coca-Cola may also be interested in setting up captives in the UK. This episode explores how the UK is positioning itself as a more competitive and attractive destination for in-house insurance and what this means for the economy and businesses.