The Prudential Regulation Authority (PRA) sets out its plans for a bespoke UK captive insurance regime, confirming that it expects to issue a consultation paper in summer 2026 and for the regime to go live in mid-2027. Shoib Khan, director of insurance supervision at the PRA, outlines the approach in a speech to the Airmic annual conference in Birmingham, framing the ambition as an onshore pivot that would see captives choose the UK as a competitive and credible home. The PRA gained the powers to amend the relevant rules in its rulebook in 2025, giving it the means to create a bespoke regime. Following HM Treasury consultation papers and a series of Subject Expert Groups (SEGs) held with the Financial Conduct Authority (FCA), the scope of what UK captives might do has expanded. Khan says captives have the potential to advance the PRA's primary and secondary objectives, describing them as risk-financing and risk-management tools that can help share risk across the system, match capital more closely to risk, and bridge protection gaps where commercial insurance capacity is constrained. Khan adds that captives can act as incubators for emerging and hard-to-place risks, from cyber and climate-related exposure to supply-chain disruption. Khan acknowledges the need to monitor risks to policyholder protection, particularly where captives expand beyond their original purpose to write business outside their own group. The policy approach, while experience of a UK regime builds, will be to operate carefully drawn boundaries that meet the core purpose of captives. Khan says: "We want a regime which is clear, transparent and easy to navigate for firms." The SEGs discussed moving away from Solvency II-based minimum capital requirements towards a simple, factor-based approach for captives, alongside the form that capital takes and how it can be deployed so as not to be seen as trapped in the captive. The groups also explored proportionate regulatory reporting scaled to the complexity and size of each captive, and expressed a preference for transparent authorisation processes, fees and service standards, supported by a knowledgeable and responsive authorisations team. Khan confirms that the regime will continue to develop over time, noting HM Treasury's commitment to legislate for Protected Cell Companies (PCCs) to conduct insurance business, potentially opening a new market for UK captive users. The PRA intends to consult on incorporating PCCs into the regime once the necessary legislation is in place. The PRA expects the regime to go live in mid-2027, and says it wants to work with industry and potential captive owners to support a pipeline of applicants between now and implementation. Khan says: "If we get the framework right, and if we work together to make the regime a success, then, like the World Cup, it is coming home. Captives are coming home."
