PRA Consultations

What Changed

The proposed MELL for 2026/27 introduces the following material changes: Budget increase of £4.4 million from 2025/26 (from approximately £103.6 million to £108 million), broadly aligned with inflation Nominal reduction of £6.6 million on a like-for-like basis when excluding the cost of enhancements to the FSCS's revolving credit facility (RCF) Real terms reduction of £11 million when accounting for inflation adjustments RCF enhancement to £3 billion to support the Bank of England's recapitalis

What You Need To Do

• *Review the consultation paper (CP1/26) in detail, particularly Appendices 3 and 4 detailing budget line items and PRA/FCA funding class allocations
• *Assess levy impact on your firm's 2026/27 budget based on your regulated business volume and funding class allocation
• *Prepare internal stakeholder communication regarding the £4
• *Monitor the FSCS January 2026 budget update for detailed cost breakdowns and compensation levy forecasts
• *Submit consultation responses if your firm wishes to comment on the proposal by 10 February 2026

Key Dates

References

• [1] bankofengland.co.uk
• [2] regulationtomorrow.com
• [3] fca.org.uk
• [4] jdsupra.com
• [5] slaughterandmay.com
• [6] ukgicompliance.com
• [7] cliffordchance.com
• [8] policymogul.com

What Changed

The consultation introduces clarifications and amendments to Solvency II reporting requirements in several critical areas: *Reporting Framework Modifications Accident or underwriting year reporting: The PRA sets expectations for how firms should apply options within the Reporting Part of the PRA Rulebook regarding temporal classification of claims. Annuity reporting by currency: Specific guidance on reporting annuities stemming from non-life obligations disaggregated by currency. RBNS claims de

What You Need To Do

• *Immediate Actions (January-February 2026)
• *Review consultation paper
• *Assess applicability
• *Identify gaps
• *Engage supervisory contacts

Key Dates

References

• [1] bankofengland.co.uk
• [2] bankofengland.co.uk
• [3] bankofengland.co.uk
• [4] regulatoryandcompliance.com
• [5] proskauer.com
• [6] fca.org.uk
• [7] milliman.com

What Changed

New fee structures: Introduction of a periodic fee block for PISCES operators based on regulated income (baseline £2,200 annual fee, variable above £500,000 threshold); extension of fee-block A.13 to include "targeted support" activities (Category 2 variation fee for existing firms, Category 4 for new entrants); registration fees for Deferred Payment Credit (DPC/buy-now-pay-later) activities aligned with Temporary Permissions Regime, added to FOS consumer credit fee-block but excluded from FSCS.

What You Need To Do

• Review current fee/levy exposure and model impacts of new blocks (e
• Assess invoice processes if paying £50,000+ in FCA/PRA fees; prepare for aligned due dates
• Submit consultation responses by deadlines, focusing on targeted support by 9 January 2026
• Budget for potential fee increases; monitor Spring 2026 fee-rates CP
• For applicants

Key Dates

References

• [1] fca.org.uk
• [2] jdsupra.com
• [3] regulationtomorrow.com
• [4] bankofengland.co.uk
• [5] finreg.aoshearman.com
• [6] policymogul.com
• [7] lexisnexis.co.uk
• [8] bankofengland.co.uk

What Changed

The PRA is considering policy reforms centered on six core principles: *Capital Quality & Quantity**: Alternative life capital structures must not lower the quality or quantity of capital required to support insurance risks. *Risk Transfer Focus**: Structures should enable patient capital investment aligned with long-term liability profiles, allowing investors to forgo immediate returns for substantial future gains. *Capital Relief Priority**: Alternative life capital should predominantly del

What You Need To Do

• *For UK life insurers
• *Assess capital needs
• *Prepare consultation response
• *Engage with policy development
• *Assess structural readiness

Key Dates

References

• [1] bankofengland.co.uk
• [2] skadden.com
• [3] mayerbrown.com
• [4] skadden.com
• [5] bankofengland.co.uk
• [6] slaughterandmay.com
• [7] hoganlovells.com
• [8] regulationtomorrow.com

What Changed

The main proposals include: Conditional disapplication of PRA General Provisions to implement deference arrangements under the UK-Swiss Berne Financial Services Agreement. Amendment to Transitional Measure on Technical Provisions (TMTP) Part, Rule 5.2, introducing a new formula for 'Wr' effective 31 December 2025, using existing 'Wq' values without retrospective recalculation. Amendment to Insurance Special Purpose Vehicle (ISPV) Part, Solvency Requirements Rule 2.2A(3), clarifying the 'no co-mi

What You Need To Do

• Submit consultation responses by 13 November 2025 via the PRA's Low Impact Amendments Process page, focusing on proposed disapplications, TMTP formula, ISPV rules, and miscellaneous changes
• Review and update internal policies for TMTP calculations to adopt the new 'Wr' formula from 31 December 2025 year-end, without restating priors
• Confirm compliance with ISPV 'no co-mingling' clarifications and SS2/25 updates by 23 December 2025
• Verify Rulebook references (e
• For friendly societies/credit unions

Key Dates

References

• [1] bankofengland.co.uk
• [2] bankofengland.co.uk
• [3] bankofengland.co.uk
• [4] jdsupra.com
• [5] regulationtomorrow.com
• [6] finreg.aoshearman.com
• [7] cliffordchance.com
• [8] ch.milliman.com

What Changed

This is not a formal rule change or new regulation but thematic feedback building on prior years, with "areas of focus" for improvement: Model risk: Elevated due to macroeconomic/geopolitical uncertainty; firms must enhance post-model adjustments (PMAs) for completeness (e.g., affordability risks, sector vulnerabilities), granular monitoring of borrower cohorts/ECL components, and model redevelopment governance. Recovery strategies: Ongoing risk of historical bias in Loss Given Default (LGD) est

What You Need To Do

• Conduct self-assessments against annex "areas of focus" (model risk, recovery, climate) and share with auditors ahead of 2026 reporting
• Enhance PMAs
• Model improvements
• Recovery processes
• Climate integration

Key Dates

References

• [1] regulationtomorrow.com
• [2] deloitte.com
• [3] bankofengland.co.uk
• [4] 4-most.co.uk
• [5] finreg.aoshearman.com
• [6] bankofengland.co.uk
• [7] broadstone.co.uk
• [8] kpmg.com

What Changed

The PRA proposes the following regulatory deletions: *FINREP Template Deletions:** Permanent deletion of 34 whole FINREP reporting templates (approximately one-third of all FINREP collections) Consolidation of remaining FINREP requirements within a single section of the PRA Rulebook Clarification of scoping conditions where current provisions are unclear, duplicative, or inconsistently applied Alignment of reporting remittance dates for FINREP reporting *Other Template Deletions:** Two COREP t

What You Need To Do

• *Cease reporting on the 37 deleted templates effective 31 December 2025
• *Update internal systems and processes to remove validation rules and submission workflows for deleted templates
• *Revise compliance calendars to reflect aligned FINREP reporting remittance dates
• *Review Pillar 3 disclosure obligations to identify any continued requirements based on deleted FINREP templates and assess whether disclosure obligations remain despite template deletion
• *Implement rulebook changes reflecting consolidation of FINREP scoping provisions into the PRA Rulebook

Key Dates

References

• [1] bankofengland.co.uk
• [2] bankofengland.co.uk
• [3] regulationtomorrow.com
• [4] pwc.co.uk
• [5] katalysys.com
• [6] ukfinance.org.uk
• [7] 4-most.co.uk
• [8] kpmg.com

What Changed

The consultation proposes four primary regulatory modifications: *Subsidiarisation Threshold Increase The PRA proposes raising the FSCS liability threshold above which third-country branches must establish a UK subsidiary from £500 million to £600 million**. The PRA attributes this increase to inflation rather than organic growth, aiming to prevent branches from artificially approaching the current threshold and incurring unnecessary subsidiarisation costs. *ORSA Reporting Clarification Curren

What You Need To Do

• *Threshold Assessment
• *Reporting Requirement Review
• *Quantitative Metrics Compliance
• *Three-Year Notification Obligation
• *Asset Holding Verification

Key Dates

References

• [1] bankofengland.co.uk
• [2] pwc.co.uk
• [3] regulationtomorrow.com
• [4] abi.org.uk
• [5] bankofengland.co.uk
• [6] lexisnexis.co.uk
• [7] slaughterandmay.com
• [8] proskauer.com