CP12/26 – Insurance friendly societies, amalgamations and transfers

What Changed

• - The PRA proposes a more detailed, codified description of the end‑to‑end Part VIII process for friendly society amalgamations and transfers, organised into stages such as planning and preparation, recording and analysing the transfer, member engage
• The PRA intends to update and integrate its Statement of Policy on insurance business transfers to explicitly cover friendly society amalgamations and transfers under the Friendly Societies Act 1992, clarifying its role as the “appropriate authority”
• For transfers, the PRA sets out circumstances in which it may exercise its statutory discretion to dispense with the requirement for the transferee friendly society to hold a member vote, subject to legislative safeguards and evidential support.
• The PRA proposes to clarify when it may direct the transferor and/or transferee to appoint an independent actuary to report on the proposed transfer’s effects on members and policyholders, including scale, complexity, and impact-based criteria.
• Firms undertaking a Part VIII transfer will be expected to provide robust actuarial analysis and supporting evidence demonstrating that statutory preclusion grounds are not met and that the transfer is in the interests of members, including detailed
• In partial transfers, firms must explain how the interests of members who remain with the transferor society are considered, including any differential treatment or ongoing benefit expectations.

Suggested Considerations

• Map all current and planned amalgamations or transfers involving friendly societies against the proposed five‑part process (planning, analysis, member engagement and votes, application/notifications/representations, confirmation meetings) and identify procedural and evidential gaps.
• Review internal policies, governance frameworks, and transaction playbooks for friendly society restructurings to ensure they reflect the PRA’s codified expectations under Part VIII of the Friendly Societies Act 1992, including early regulatory engagement and documentation standards.
• Develop or enhance internal guidance for actuaries and finance teams on the required actuarial analysis for Part VIII transfers, ensuring the ability to evidence that preclusion grounds are not met and that the transaction is in the interests of members and policyholders.
• Implement procedures to identify all classes of members and policyholders affected by proposed amalgamations or transfers, assess whether their existing terms and conditions are preserved or materially changed, and document the implications for benefit levels and distribution.
• For partial transfers, establish a formal framework to assess and document how the interests of members remaining with the transferor society are considered, including any continuing obligations, capital support, and benefit expectations.
• Create or update member communication and engagement protocols to ensure clear explanations of proposals, voting processes, and rights to make representations, including coordination with PRA/FCA approval where member statements require regulatory sign‑off.

Key Dates

Who is Affected