Japan has no captive regime of its own, and a Financial Services Agency working group is weighing what one should look like. Minutes of its first meeting, held on October 1, 2026 and now published, show most members backing a reinsurance-only design while pressing on solvency, collateral and parent-company oversight. The minutes record no decision.
What the secretariat proposed
The group was set up after the minister's consultation at the Financial System Council's August 31 joint session, which asked it to examine creating a reinsurance captive regime and the shape of the life insurance safety net. A captive is generally an insurer set up to underwrite the risks of a parent and its group companies. Today a company that wants a reinsurance captive in Japan needs an insurer licence, a burden the secretariat called heavy. Japanese companies therefore set up captives in places such as Hawaii.
The secretariat suggested prioritising reinsurance captives, which would take on only the group's own risk through a primary insurer. Its sketched direction was to tailor licensing criteria and minimum capital, limit policyholders to the group, set eligible lines to fit the policy aim, balance governance and efficiency, and keep solvency rules as simple as still ensures claims can be paid. It proposed no extra tax measures and treated primary-writing captives as a future question.
Why companies want it
Mitsubishi Heavy Industries told the group that capacity in the excess layer of its liability programme has been short since the 2024 fiscal year, and that self-retention has this year spread to the primary layer. It set up a reinsurance captive in Hawaii in April and issues roughly 10,000 insurance certificates a year. Foresight Risk Management said Japanese captive formation has grown steadily for more than 50 years, with the current figure thought to be 181 companies. A survey from a member's university lab, cited by the secretariat, found just under 40% of respondents had a captive or had considered one.
Where members pushed
Most members backed the direction, and several suggested starting with non-life lines and leaving life and medical cover out. Beyond that, the questions were about risk. One member described a two-layer problem: a captive's failure could reach ordinary policyholders through the primary insurer, so credit-risk management at the insurer and collateral rules matter alongside the captive's own capital. The member cited Hawaii and Bermuda minimum capital of $100,000 and $120,000 for the entry class. A member who works as an actuary said that if solvency rules demand high required capital, that would be a large cost even with a small minimum at set-up, and asked how the new economic value-based solvency regime would apply. The member whose lab ran the cited survey warned that a lower minimum could be offset if primary insurers demand heavy collateral.
Another member dissented on framing, arguing a captive should not be treated as a type of insurer and should focus on risks the ordinary market struggles to absorb. A further member questioned whether the FSA has the staff to monitor more supervised entities.
The chair asked the secretariat to set out in later meetings how supervision would reach the parent's risk-management function. The secretariat cited the major-shareholder rules for insurers as one possible model. The minutes say the next meeting date would be announced later.