The Prudential Regulation Authority (PRA) has published a policy statement finalising post-implementation amendments to Solvency UK reporting and disclosure requirements. Insurers and Lloyd's managing agents have until December 31 to update systems and reporting frameworks ahead of the new obligations.
PS18/26, published on July 29, responds to two earlier consultations: CP22/25 on Solvency UK reporting and disclosure, and Proposal 1 of CP4/26 on Own Funds. It is relevant to UK Solvency II firms, the Society of Lloyd's and its managing agents, insurance and reinsurance groups, UK holding companies, and third-country branch undertakings for certain proposals.
Solvency UK took effect on December 31, 2024 as a post-Brexit adaptation of EU Solvency II. It restated the EU-derived framework into the PRA Rulebook under powers granted by the Financial Services and Markets Act 2023. The EU has since amended its own Solvency II Directive, with member states required to apply the new rules by January 30, 2027, so both regimes are now running parallel reform cycles.
The PRA said PS18/26 addresses issues identified following the large-scale reporting changes introduced in 2024. It received six responses to CP22/25 and three to Proposal 1 of CP4/26. Respondents were broadly supportive but raised concerns about the volume of changes, implementation costs and the timing of final policy publication relative to year-end reporting cycles.
Among the main changes, the PRA will transition certain asset reporting templates to NACE 2.1 economic activity codes. The affected templates are IR.06.02, IR.05.07, and IR.11.01, with a mandatory implementation date of January 1, 2027. Firms that have already upgraded systems may opt in from December 31.
Some firms had already faced a dual-reporting burden: certain asset data providers switched to NACE 2.1 ahead of the PRA's own taxonomy. Those firms needed to map codes back to NACE 2.0 for UK regulatory submissions. The PRA's opt-in from December 31 directly addresses that pressure.
The Matching Adjustment Asset and Liability Information Return (MALIR) templates will move from Excel to eXtensible Business Reporting Language (XBRL), a format change the PRA said will improve robustness and consistency of submissions. Two of the three respondents on this proposal welcomed the shift, with one noting it would materially reduce the reporting burden.
On projected Financial Services Compensation Scheme (FSCS) liabilities, the PRA scaled back its original proposal after industry feedback. Third-country branch undertakings will now be required to report one year of projected FSCS liabilities data, reduced from three years as consulted in CP22/25. The PRA said the change was intended to improve proportionality while still providing early visibility of branches likely to significantly increase their FSCS-protected liabilities.
Under Proposal 1 of CP4/26, the PRA has removed the requirement for firms to obtain a classification permission for equity-accounted subordinated liabilities to be classified into own funds tiers. The change aligns the treatment of equity-accounted and liability-accounted subordinated liabilities, with all three respondents supporting the removal.
The accuracy of Solvency UK reporting carries direct supervisory consequences. In March 2026, the PRA fined UK Insurance Limited, the principal underwriting vehicle of Direct Line Group, £10.6 million for miscalculations that overstated its Solvency II position in 2023 and 2024. The regulator found the error stemmed from ineffective controls in the finance and actuarial functions and went undetected for a significant period.
“The PRA’s latest Solvency UK policy statement is a pragmatic package of reporting and disclosure refinements aimed at addressing issues identified since the 2024 reforms were implemented," said David Gray, senior consultant and actuary at Broadstone. "Insurers are likely to welcome the PRA’s willingness to amend a number of proposals in response to industry feedback, including simplifying aspects of reporting and removing an unnecessary Own Funds permission requirement.”
Gray, however, cautioned that firms will need to update systems, processes, and reporting frameworks ahead of the December deadline. "This includes amendments to reporting templates and instructions, including the introduction of NACE 2.1 classifications within certain reporting templates. As with any reporting change, insurers will need to work with asset data providers and reporting software vendors to ensure updates are implemented and tested ahead of year-end reporting."
“The timely publication of the updated reporting taxonomy will therefore be important in giving firms sufficient time to implement, test and validate the necessary changes before the new requirements take effect,” Gray added.
The PRA said it intends to publish the updated reporting taxonomy shortly after PS18/26 and encouraged firms to engage with their usual supervisory contacts where implementation issues arise.
