HM Treasury does not anticipate providing tax incentives for UK captives under the current proposals, with captives to be taxed in the same way as other insurance undertakings, according to minutes of the Prudential Regulation Authority's (PRA) captives industry roundtable. The roundtable, held on 17 September in hybrid format, gave stakeholders the opportunity to seek clarification on CP11/26, A tailored regime for captive insurance, and on related proposals in the Financial Conduct Authority's (FCA) CP26/29, ahead of formal consultation responses. Treasury said the tax treatment of any future captive protected cell company (PCC) structures would require further consideration if that framework were taken forward. Participants raised possible implications for charities, not-for-profit and smaller organisations, as well as the potential effect of insurance premium tax on captive adoption. Treasury also confirmed that the UK does not have a corporate re-domiciliation regime, and that any future cross-sector framework would require legislation. The PRA said existing mechanisms, including novations and commutations, could support some transitions in the meantime. On authorisation, the PRA and FCA said the four-to-six-week target for complete applications would begin only once both regulators had sufficient information for a substantive assessment, excluding pre-application engagement and time spent addressing material gaps. Before the regime is implemented, firms could discuss business models and draft application material with the regulators, although this would not constitute authorisation or a binding commitment. Captive-specific application materials and guidance would be made available. On governance, the PRA said a captive would need an SMF1 and a non-executive director, but an independent non-executive director would not be mandatory. The proposed Captive Capital Requirement would be a minimum, and boards would need to consider holding additional resources where a captive covers emerging or complex risks or is concentrated towards certain risks. Participants noted that fronting insurers may require captives to hold resources above the regulatory minimum. Pension risks remain outside the initial regime. Treasury gave an update on the legislative work needed to enable PCCs to undertake insurance activity, with timing dependent on the legislative process and further regulatory consultation to follow. The PRA has not set timelines for extending the regime to group or association captives. The PRA said formal consultation responses had begun to arrive, but that it was too early to draw conclusions. The consultation closes on 14 October 2026, with responses to be sent to CP11_26@bankofengland.co.uk and captives@fca.org.uk.
