On 29 June 2026, the Prudential Regulation Authority (PRA) issued policy statement PS18/26 (PS18/26) which sets out the PRA’s feedback on responses to:
- Consultation paper 22/25 UK Solvency II reporting and disclosure: Post-implementation amendments(CP22/25) which centred around a package of amendments to UK Solvency II (Solvency UK) reporting and disclosure requirements to address issues identified by firms and the PRA following the PRA’s review of Solvency UK reporting and disclosure requirements as set out in PS15/24 Review of Solvency II: Restatement of Assimilated Law.
- Proposal 1 of consultation paper 4/26 UK Solvency II Own Funds: Updates and fixes to rules and expectations (CP4/26) which proposed removing the requirement for firms to obtain a classification of own funds permission under section 138BA of the Financial Services and Markets Act 2000 (FSMA) for equity-accounted subordinated liabilities, thereby aligning them to the treatment of liability-accounted subordinated liabilities, together with consequential reporting changes to set out how equity-accounted subordinated liabilities should be reported following removal of the permission requirement.
It also sets out the PRA’s final policy in respect of both consultations.The PRA intends to publish a separate policy statement in relation to CP4/26 Proposals 2 to 4 later this year.
Overall, this package of changes is aimed at improving clarity and consistency and reducing the burden on firms of certain regulatory reporting requirements following the implementation of Solvency UK. The full set of amendments are set out in the Appendices to PS18/26.
UK Solvency II reporting and disclosure (CP20/25)
The changes to the reporting and disclosure requirements under Solvency UK are, in summary, as follows:
- Amendments to non-life and life templates and instructions, notably (but not limited to) IR.05.04 (non-life income, expenditure and business model analysis) and IR.16.01 (focussing on supporting supervisory understanding of firms’ non-life annuity reserves) which are detailed in Appendices 4 and 9.
- The removal of certain reporting requirements for branches.
- Transitioning to NACE 2.1 codes (the standard European industry classification codes used to identify the economic activity of counterparties, issuers, policyholders, or investments)
for certain reporting templates by providing an opt-in for firms to report NACE 2.1 codes from 31 December 2026 reporting reference date, ahead of the implementation date of 1 January 2027.
- The deletion of Supervisory Statement 37/15 – Solvency II: internal model reporting codes and components following the inclusion of its contents in the instructions to template IR.25.05.
- Additional minor amendments to templates and instructions to correct errors, update references, amend options, and address inconsistencies.
The PRA is introducing a requirement for third-country branch undertakings to report total projected Financial Services Compensation Scheme (FSCS) liabilities data for one plan year to help the PRA effectively implement its approach to Insurance Branch Supervision (as set out in Statement of Policy 7/24 – The Prudential Regulation Authority’s approach to insurance branch authorisation and supervision). The provision of projection data is intended to enable the PRA to assess whether a branch is likely to significantly increase its FSCS-protected liabilities as a proportion of total branch liabilities in the future and the associated risks to policyholder protection related to the firm’s reinsurance arrangements, and to tailor its supervision appropriately.
The PRA is also implementing a package of reforms to the Matching Adjustment Asset and Liability Information Return set out at paragraphs 2.56-70 of PS18/26.
UK Solvency II Own Funds (CP4/26)
Currently, under rule 3.4 of the Own Funds Part of the PRA Rulebook (Own Funds), firms can classify own funds (an insurer’s regulatory capital resources used to demonstrate solvency) items that are not included in the list of own funds items set out in rules 3A, 3D and 3F of Own Funds into one of the three tiers of capital under Solvency UK if the firm has received a classification of own funds permission under s138BA FSMA in respect of that item. This permission is intended to allow for the classification of items that are not listed as known items for a given tier, but which nonetheless display the features of that tier.
The PRA confirmed that it will proceed with removing the permission requirement through the inclusion of equity-accounted subordinated liabilities in the lists of recognised own funds items for each tier of capital set out in rules 3A, 3D and 3F with consequential amendments to the Group Supervision part of the PRA Rulebook (Group Supervision).
Following implementation, issuances of equity-accounted subordinated liabilities would remain subject to the standard pre-issuance notification process, as required by Own Funds 5 and Group Supervision 6. The permission requirement in Own Funds 3.4 would continue to apply to items not included in the lists of recognised own funds items for each tier of capital in rules 3A, 3D and 3F of Own Funds.
Implementation
High level details of the attendant reporting changes are set out in Table 1 and Appendix 4 of CP4/26.
As set out in CP22/25, the PRA intends to implement the final policy and the rule instrument for reporting reference dates on or after Thursday 31 December 2026.
To ensure alignment, the final policy and the rule instrument for Proposal 1 of CP4/26 will be implemented on the same date. The changes to Own Funds and Group Supervision will take effect from that date, and the reporting changes set out in Table 1 of PS18/26 will apply to reference dates falling on or after that date. The PRA has confirmed that interim reporting measures are not required.
The PRA may contact affected firms in relation to the variation of waiver and modification directions to align with the final rules.
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