Captive manager

Category: Captives and ART · Reviewed by the Apex broking team · Last reviewed 2026-08-22 · ~5 min read

Definition and why the role exists

A captive is a licensed insurance company whose purpose is to insure or reinsure the risks of its parent and the parent's group. Like any insurer it must maintain capital, keep proper books, file returns with its regulator, hold board meetings in its domicile, produce audited accounts and administer the policies it has issued. Very few captives are large enough to justify permanent employees to do that work, so the functions are outsourced to a captive manager licensed in the same domicile.

In most captive jurisdictions the manager is itself a regulated entity, and the regulator's willingness to license a new captive is influenced by the quality and capacity of the manager appointed. In practical terms the manager is the captive's operating platform and its principal point of contact with the regulator.

What a captive manager actually does

The core services usually include: preparing and filing the licence application and the business plan; maintaining the statutory books and registers; producing management accounts, statutory accounts and regulatory returns; calculating and monitoring solvency and capital adequacy; issuing policy documentation and processing premiums; maintaining the claims register, setting reserves and administering payments; arranging and minuting board meetings; and coordinating the actuary, auditor, investment manager, fronting insurers and reinsurance brokers.

What a captive manager generally does not do is decide the group's risk retention strategy, negotiate the group's commercial insurance programme, or act as the group's broker. Those remain the owner's decisions, usually taken with the group's risk manager and its retail broker. Keeping that line clear matters, because the manager's incentives and the broker's are not identical.

Domicile and regulatory context

The choice of manager is closely bound up with domicile selection. Established captive centres relevant to UK-headquartered groups include Guernsey, the Isle of Man, Ireland, Malta, Bermuda, and in the United States Vermont and several other states. Each has its own licensing categories, capital rules, local substance expectations and reporting calendar, and managers tend to be strongest in the domiciles where they have the largest book.

Where a cell structure is used — a protected or incorporated cell company — the manager typically also operates the core company that hosts the cells, which makes the manager's financial standing and governance more important still.

The proposed UK captive regime

On 14 July 2026 the Prudential Regulation Authority and the Financial Conduct Authority published proposals for a tailored UK captive insurance regime, in PRA consultation paper CP11/26, A tailored regime for captive insurance. The consultation closes on 14 October 2026 and the regulators have indicated the regime would open in summer 2027.

As consulted on, the regime would cover single-parent captives insuring or reinsuring the risks of the parent and other companies in its group, with protected cell structures left to a later consultation once legislation permits. The proposals include a streamlined authorisation process targeted at four to six weeks, lower capital and reporting requirements with a more flexible approach to capital resources, and captives falling outside the Solvency UK requirements. On the conduct side, captives would be exempt from the Consumer Duty and subject to proportionate FCA requirements and supervision, and would not be permitted to insure employee benefit policies directly, only to reinsure them.

For groups already running an offshore captive, the practical question the consultation raises is whether onshoring would reduce administrative cost and travel without losing the flexibility the current domicile provides. It is a live question rather than a settled one, and the final rules are not yet made.

Choosing and overseeing a manager

The things worth testing before appointment are unglamorous: how many captives of your size and class the manager runs in the chosen domicile; who specifically will do the work and where they sit; how the fee is built up and what falls outside it; how claims reserving is handled and who signs off; what the manager's own professional indemnity and crime cover looks like; and what happens on exit — how records are transferred and over what period.

Oversight after appointment is a board responsibility that owners frequently underestimate. Delegating the administration does not delegate the directors' duties. Board packs, reserve movements, solvency headroom and the reinsurance programme should be reviewed by people who are prepared to challenge them.

Why it matters

A captive is only as good as its administration. Late filings, reserving that drifts from reality, or an intercompany premium that no longer reflects the risk transferred, will surface eventually — usually as a regulatory issue, a tax question or an audit qualification rather than as an insurance one. The manager is the control that stops that happening, which is why the appointment deserves more scrutiny than it usually gets.

Frequently asked questions

What does a captive manager do?

It runs the captive's day-to-day operations: licence applications, statutory books, management and statutory accounts, regulatory returns, solvency monitoring, policy issuance, premium and claims administration, board and company secretarial support, and coordination of the actuary, auditor and other advisers.

Is a captive manager the same as an insurance broker?

No. The manager administers the captive as a licensed insurer in its domicile. The broker advises the parent on its risk transfer programme and places cover in the commercial market. Some groups use firms from the same wider organisation for both, which is workable but should be an informed choice rather than a default.

Is the UK getting its own captive regime?

The PRA and FCA published proposals for a tailored UK captive regime on 14 July 2026 in consultation paper CP11/26, with the consultation closing on 14 October 2026 and the regime indicated to open in summer 2027. As consulted on it would cover single-parent captives, with streamlined authorisation and captives outside Solvency UK. The rules are not yet final.

Where are UK-owned captives usually domiciled?

Commonly in Guernsey, the Isle of Man, Ireland, Malta, Bermuda or a US captive state such as Vermont. The choice depends on the classes written, capital and substance requirements, the availability of cell structures and the depth of local management and audit capacity.

Related entries

• Captive insurance company
• Single parent captive
• Captive domicile selection
• Captive feasibility study
• Cell captive

This entry is part of the Apex Insurance Wiki. It states the position as at August 2026. Last reviewed 2026-08-22. Next review: 2027-02-22. It is general insurance information, not legal advice, and not regulated advice on a specific policy.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.