PS13/26 – Insurance third-country branches: policy implementation and other updates

What Changed

• - The PRA confirms an increase in the third‑country branch subsidiarisation threshold for liabilities covered by the Financial Services Compensation Scheme (FSCS) from £500 million to £600 million, revising expectations in SS44/15 and related materia
• Third‑country branch undertakings are now explicitly required to notify the PRA where projections show their FSCS‑covered liabilities may exceed the £600 million subsidiarisation threshold within a three‑year forward‑looking period, replacing the pre
• The PRA embeds in the Rulebook new quantitative thresholds for regulatory reporting, replacing the existing modification by consent (MbC) under Solvency II Reporting 2.2(1) for third‑country insurance branches.
• Under the new regime, only branches (excluding pure reinsurance branches) with at least £1 billion gross written premiums or £2 billion in branch provisions (based on the prior year’s annual regulatory data) must submit the full suite of third‑countr
• The PRA discontinues quarterly reporting for certain non‑life claims templates and reinstates two annual reporting templates (IR.19.01.01 – non‑life insurance claims and IR.20.01.01 – development of the distribution of claims incurred) for third‑coun
• The PRA permanently embeds in the Rulebook the relief currently provided to pure reinsurance branches via the MbC, such that pure reinsurance branches are no longer subject to the Prudent Person Principle investment rules at branch level, removing th

Suggested Considerations

• Assess current and projected FSCS‑covered UK branch liabilities against the new £600 million subsidiarisation threshold and implement or update a robust three‑year forecasting process to identify potential threshold breaches.
• Update internal PRA notification procedures and early‑warning triggers so that the branch informs the PRA promptly if forecasts show FSCS‑covered liabilities could exceed the £600 million threshold within three years.
• For branches approaching or exceeding the new threshold, initiate or refresh internal structural options analysis (branch vs subsidiary), including timeline, capital, governance, and operational impacts, and prepare for early engagement with the PRA on subsidiarisation expectations.
• Map gross written premiums and branch provisions against the new £1 billion GWP and £2 billion provisions reporting thresholds and determine whether the branch will be subject to the full or reduced suite of third‑country branch regulatory reporting templates from 31 December 2026.
• Redesign regulatory reporting processes, systems, and controls to align with the new reporting perimeter, including identifying which templates will be required, adjusting data capture, and ensuring capacity to produce reinstated templates IR.19.01.01 and IR.20.01.01 on an annual basis.
• For firms that will newly fall into the full‑reporting category, plan and execute a reporting implementation project, including IT build, data model changes, testing, and governance sign‑offs, ahead of the 31 December 2026 effective date.

Key Dates

Who is Affected