CP20/25 – Insurance third-country branches: policy implementation and other updates
Executive Summary
CP20/25 is a PRA consultation paper published on 16 September 2025 that proposes targeted updates to the regulatory framework governing third-country insurance branches operating in the UK. The consultation addresses inconsistencies introduced during the Solvency II review, clarifies supervisory expectations, and increases the subsidiarisation threshold—matters that directly affect the operational and compliance costs of non-UK insurers seeking to maintain branch operations rather than establish subsidiaries in the UK market.
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 Current guidance will be updated to clarify that third-country branches must submit an Own Risk and Self Assessment (ORSA) report for the insurance undertaking (the legal entity) rather than the branch alone, including a high-level summary of solvency position, capital buffer rationale, and stress testing res
What You Need To Do
- *Threshold Assessment
- *Reporting Requirement Review
- *Quantitative Metrics Compliance
- *Three-Year Notification Obligation
- *Asset Holding Verification
- *Consultation Response Consideration
Key Dates
Compliance Impact
Urgency Rating: HIGH
Who is Affected
Summary
Consultation paper 20/25