The Prudential Regulation Authority (PRA) welcomes HM Treasury’s (HMT) proposals to progress legislative reforms to the UK’s risk transformation regime, affecting insurance special purpose vehicles (ISPVs), and to enable the use of Protected Cell Company (PCC) captives. The PRA has worked closely with HMT on these proposals.
The PRA has committed to consulting on a new insurance captives regime in Summer 2026. The new regime will increase the attractiveness of the UK as a centre for wholesale insurance services and widen access to the risk management benefits of captive insurance. As the legislative changes required to enable PCCs to operate as insurers will not be in place in time, this feature will not form part of the consultation, and therefore also not part of the regime at launch (expected Summer 2027). The PRA will continue to work closely with HMT and intends to consult on incorporating PCCs into the regime to further widen access to the benefits of the UK’s captives regime once the necessary legislation is in place.
The PRA already introduced reforms in 2025 to enhance the UK ISPV framework, eg by the introduction of an accelerated pathway for certain ISPVs. The PRA plans to consult on further ISPV reforms, intended to add further simplicity, flexibility, access and to also improve PCC use for ISPVs, in due course following the removal of legislative barriers.
Both the PRA’s intended reforms to the current ISPV regulations and the planned introduction of the new captives regime will support the competitiveness and growth of the UK’s insurance sector and the wider UK economy.
Notes to editors
Captive insurance is a means of self-insurance and risk management by commercial entities and, less often, by public organisations. Use of PCCs can widen access to the benefits of captives by providing a more affordable route for smaller businesses. It can also serve as a pilot option for organisations taking their first steps towards establishing standalone captives.