BIBA's open letter to the Chancellor regarding regulatory changes

This article was co-authored by Laura Valpas, Trainee Solicitor.

BIBA’s open letter

On 14 July 2025, the British Insurance Brokers’ Association (BIBA) wrote an open letter to the Chancellor, Rachel Reeves, ahead of her Mansion House speech which took place on 15 July.

The letter claims that it is increasingly difficult for individuals and businesses to access the advice and products they need due to challenges caused by over-burdensome regulation on insurance brokers. It also highlighted a decline in new broker registrations as only two new insurance brokers received FCA approval in Q1 of 2025 whilst several existing brokers left the market citing over regulation as a principal driver.

The letter acknowledged that the FCA’s recent consultation on “simplifying insurance rules” is a welcome start but that the industry needs a balanced rulebook and reporting requirements in order to grow. It urged the Chancellor to consider reversing the regulatory burden when she reveals her Financial Services Growth and Competitiveness Strategy at Mansion House. The letter urged the Chancellor to proactively support firms, work with industry and trade associations to share best practices and measure progress with clear metrics on growth and competitiveness.

The Mansion House Speech and Leeds Reforms

Financial Services Growth and Competitiveness Strategy makes several interventions to ensure that the UK’s financial services regulatory environment is proportionate, predictable, and internationally competitive. Changes include:

• new, shorter, targets for the FCA to cut times on authorisations and approval;
• an assessment by the FCA on Consumer Duty and whether it unduly affects wholesale activity to ensure regulators are regulating for growth; and
• streamlining the Senior Managers and Certification Regime (SM&CR) by reducing the burdens it imposes on firms by 50% and by cutting approval times.

In her speech, the Chancellor acknowledged that Britain is the destination of choice for underwriting complex, specialised and high-value risk. As a result, the Chancellor is introducing a new competitive framework for captive insurance. The FCA and the PRA will consult on the new rules in summer 2026 but the government anticipates that the framework will include proportionally lower capital and reporting requirements and a faster authorisation process. It is anticipated that the captives regime will be implemented in mid-2027.

The government is also consulting until 8 October 2025 on ways to support new risk transfer solutions. The consultation relates specifically to new flexibilities to promote the use of insurance linked securities (ILS) and wider reforms to the Protective Cell Company (PCC) framework. The government is also considering expanding the definition of “insurance risk transformation” to allow PCCs to assume risk from non-carriers, such as brokers or MGAs, as well as expanding the type of activities that can be conducted by giving PCCs the option to be authorised either as risk transformers or insurers. The consultation also builds on recent PRA changes to allow transformer vehicles to enter into more than one contractual arrangement by extending this treatment to the cells of PCCs.

Comment and industry response

Overall, the response to the Mansion House Speech and the subsequent changes seems to have been well received by the insurance industry, especially since the Chancellor in her speech acknowledged the importance of Britain’s insurance sector. The full effect on the industry remains to be seen as the government is still in the consultation phase on various changes which will impact the industry, such as the captives regime and the proposed new risk transfer solutions. Regardless, the changes to the regulatory regime will be beneficial to the industry, as was noted by industry leaders.

According to Hannah Gurga, Director at Association of British Insurers:

“The Leeds Reforms set a constructive and positive path to accelerating investment and growth in the UK economy. Closer alignment between the FOS and FCA, alongside a streamlined Senior Managers and Certification Regime, are critical steps towards delivering the clarity and regulatory environment our industry needs to thrive. It's encouraging to see the vision set out in the Financial Services Growth and Competitiveness plan, and we look forward to working with the government, regulators and wider industry to help cement the UK’s status as the world’s leading financial centre."

According to Sir Charles Roxburgh KCB, Chair at Lloyd’s:

“Today’s announcements by the Chancellor — focused on streamlining regulation, reducing burdens on firms, and enabling innovation and growth — are a real boost for the London insurance market. The Government’s clear support for our sector, and its recognition of specialty insurance and reinsurance as a Frontier Industry in its Modern Industrial Strategy, strengthen my confidence in Lloyd’s continued success at the heart of the market.”

According to Drazen Jaksic, Chief Executive Officer at Zurich UK:

“We welcome the Chancellor’s commitment to building a stronger, more resilient UK economy. The focus on sustainable growth, investment in innovation, and fostering long-term confidence is closely aligned with Zurich’s own priorities. As one of the UK’s leading insurers, we stand ready to work together with policymakers, customers, and partners to help deliver on these goals. We look forward to further engagement with the government to ensure the insurance sector remains robust, innovative, and able to meet the evolving needs of people and businesses across the UK.”