PS18/26 – Solvency UK: Post-implementation reporting and disclosure amendments and Own Funds permissions update

Policy statement 18/26

• Related links

  • CP22/25 – Solvency UK Reporting and Disclosure
  • CP4/26 – UK Solvency II Own Funds: Updates and fixes to rules and expectations

Published on
29 July 2026

1: Overview

1.1 This Prudential Regulation Authority (PRA) policy statement (PS) provides the PRA’s feedback on responses to consultation paper (CP) 22/25 – UK Solvency II reporting and disclosure: Post-implementation amendmentsand to Proposal 1 of CP4/26 – UK Solvency II Own Funds: Updates and fixes to rules and expectations. It also sets out the PRA’s final policy in respect of both consultations.

1.2 In CP4/26, the PRA proposed to align the implementation of the final policy for Proposal 1, including consequential reporting changes, with the final reporting policy from CP22/25 to enable firms to implement the changes for year-end 2026 reporting. The PRA has taken this approach to support a streamlined and efficient implementation for firms, with all reporting changes being made through a single taxonomy update.

1.3 In CP22/25, the PRA consulted on a package of amendments to Solvency UK reporting and disclosure requirements. These proposals were intended to address issues identified following implementation in 2024 of the Solvency UK reporting reforms. The proposals in CP22/25 focused on improving clarity, consistency and data quality, addressing issues identified by firms and the PRA.

1.4 In addition to these amendments, the PRA proposed to collect projected Financial Services Compensation Scheme (FSCS) liabilities data from third-country branch undertakings to support effective insurance branch supervision. The PRA also proposed to transfer the reporting format of the Matching Adjustment Asset and Liability Information Return (MALIR) templates from Excel to eXtensible Business Reporting Language (XBRL).

1.5 In CP4/26, the PRA proposed targeted amendments to address known issues and inconsistencies in the own funds framework, following the restatement of Solvency UK requirements into the PRA Rulebook and policy materials in 2024. The proposals were intended to reduce avoidable burden and improve clarity for firms. They included the removal of a permission requirement for the classification of own funds under Proposal 1, with consequential reporting changes.

1.6 Chapter 2 of this PS summarises responses to CP22/25 and the PRA’s feedback. The PRA has finalised the policy for a number of its proposals in line with CP22/25. Where the PRA has made changes, these are set out in the ‘changes to draft policy’ section. The final policy is set out in the appendices to this PS, including:

• amendments to the Reporting Part of the PRA Rulebook (Appendix 2);
• amendments to reporting and disclosure templates and instructions (Appendix 4);
• supervisory statement (SS) 7/18 – Solvency II: Matching adjustment (Appendix 5); and
• Matching Adjustment supplementary information form from Insurance rule permissions and notifications (Appendix 6).

1.7 This PS also confirms the deletion of SS37/15 – Solvency II: internal model reporting codes and components.

1.8 Chapter 3 of this PS sets out the PRA’s feedback to responses received to Proposal 1 of CP4/26. The PRA has finalised the policy for Proposal 1 broadly as consulted in CP4/26, with any changes set out in the ‘changes to draft policy’ section. The final policy for this proposal is also set out in the policy materials contained in the appendices to this PS, including:

• further amendments to the Reporting Part (Appendix 2);
• amendments to the Own Funds Part of the PRA Rulebook (Annex A of Appendix 3);
• amendments to the Group Supervision Part of the PRA Rulebook (Annex B of Appendix 3); and
• further amendments to reporting and disclosure templates and instructions (Appendix 4).

1.9 This PS is relevant to UK Solvency II firms, the Society of Lloyd’s and its members and managing agents, insurance and reinsurance groups, and UK holding companies. CP22/25 content is also relevant to insurance and reinsurance undertakings that have a UK branch (third-country branch undertakings).

Background

1.10 The PRA completed its review of Solvency UK reporting and disclosure requirements in 2024, with the publication of PS15/24 – Review of Solvency II: Restatement of assimilated law. The PRA considered that the resulting reforms removed a substantial volume of templates from the previous reporting package. Several proposals in CP22/25 were intended to address implementation issues arising from those reforms.

1.11 In CP22/25, the PRA proposed to:

• Amend reporting and disclosure templates and instructions to clarify requirements in response to queries from firms, and to resolve inconsistencies and errors.
• Transition to the Nomenclature of Economic Activities (NACE) 2.1 classification for reporting templates IR.06.02 (list of assets) and IR.11.01 (assets held as collateral), as well as the new Matching Adjustment Asset and Liability Information Return (MALIR) template MA.01.01.
• Introduce two reporting changes for third-country branches linked to CP20/25 – Insurance third-country branches: policy implementation and other updates and some minor technical updates. PS13/26 – Insurance third-country branches: policy implementation and other updates, published in May 2026, set out the final policy in relation to third-country branches.
• Require third-country branches to report total FSCS liabilities data over three business plan years to help the PRA effectively implement its approach to insurance branch supervision as set out in statement of policy (SoP) 7/24 – The Prudential Regulation Authority’s approach to insurance branch authorisation and supervision.
• Transfer the reporting format of the MALIR templates from Excel to eXtensible Business Reporting Language (XBRL). This fulfils a commitment made in CP19/23 – Review of Solvency II: Reform of the Matching Adjustment to retain Excel-based reporting for a minimum of two years, while assessing the need for an alternative reporting interface. The PRA also proposed removing known duplicative reporting and inconsistencies between MALIR and the Quantitative Reporting Templates (QRTs), and to change the approach to reporting paired assets and derivatives in the MALIR templates.

1.12 In Proposal 1 of CP4/26, the PRA proposed to:

• remove the permission requirement for equity-accounted subordinated liabilities to be classified into own funds tiers; and
• make consequential updates to related reporting and disclosure templates and instructions.

1.13 This proposal was intended to reduce avoidable burden for firms and the PRA, and to align the treatment of equity- and liability-accounted subordinated liabilities for the purposes of classification into own funds tiers.

1.14 In determining its policy, the PRA considers representations received in response to consultation, publishing an account of them and the PRA’s response (‘feedback’). Details of any significant changes are also published. In this PS, the ‘Feedback to responses to CP22/25 and final policy decisions’ (Chapter 2) and ‘Feedback to responses to Proposal 1 of CP4/26’ (Chapter 3) chapters contain a general account of the representationsmade in response to the two CPs and the PRA’s feedback.

Summary of responses

1.15 The PRA received six responses to CP22/25 and three responses to Proposal 1 of CP4/26. The names of the respondents to the CPs who consented to their names being published are set out in Appendix 1.

1.16 Respondents to CP22/25 were generally supportive of a number of the PRA’s proposals. Support focused on proposals aimed at providing greater clarity, correcting errors, removing duplicative information, as well as the proposed updates to MALIR and NACE codes.

1.17 However, some respondents raised concerns about certain proposals. Concerns from respondents included the volume and proportionality of the changes, the timing of the publication of the final policy and corresponding taxonomy in relation to implementation dates, and the resulting reporting burden on firms (including cost estimates included in the cost benefit analysis (CBA)). Respondents also highlighted the misalignment with the EU in the transitioning to NACE 2.1 codes.

1.18 In addition, some respondents raised potential implications for the PRA’s secondary competitiveness and growth objective (SCGO). The proposal for third-country branches to report total projected FSCS liabilities data was identified as a specific area of concern. Respondents also identified issues with and queried some elements of the reporting templates and instructions that were consulted on. Each issue raised is addressed in more detail in Chapter 2.

1.19 All three respondents to Proposal 1 of CP4/26 were supportive of the core proposal to remove the permission requirement for the classification of equity-accounted subordinated liabilities into own funds tiers. However, two respondents raised concerns with the proposed consequential reporting amendments, including issues relating to clarity, consistency and implementation. These issues are addressed in more detail in Chapter 3.

Changes to draft policy

1.20 The PRA has made the following changes to draft policy following its review of the responses to CP22/25:

• Removing the proposed new template variant IR.05.04.04, instead requiring total income and expenditure to be included in template IR.05.04.02. As a consequence, the PRA will no longer amend SS11/16 – Solvency II: External audit of, and responsibilities of the governing body in relation to, the public disclosure requirement, and SS40/15 – Solvency II: reporting and disclosure.
• Changing the reference date for the non-life annuity provision progression in IR.16.01 from 31 December 2024 to 31 December 2026, to align with the implementation date of this policy.
• Allowing firms, if they wish, to use NACE 2.1 codes from the 31 December 2026 reporting reference date and scoping in template IR.05.07 to transition to NACE 2.1 codes, which had been left out of the proposal in CP22/25.
• Reducing the requirement for branches to report projected FSCS liabilities data from three years of data to one year.
• Minor corrections to inconsistencies and errors identified by respondents in the templates and instructions.
• Further amendments to templates and instructions identified by the PRA, that are clarificatory in nature, as set out in Chapter 2.

1.21 The PRA has made the following changes to the draft policy for the consequential reporting amendments following its review of responses to Proposal 1 of CP4/26.

Table 1: Changes to consequential amendments to reporting materials

Reporting materials	Proposed policy in CP4/26	Final policy
Own Funds templates and instructions (IR.23.01, IR.23.02, IR.23.03 and IR.23.04)	Update instructions only.	Update template terminology and instructions.
Solvency II balance sheet template and instructions (IR.02.01)	Update template terminology and instructions.	Update instructions only.
Validation checks	Remove validation checks: - IR.23.01 row R0140 = IR.02.01 row R0870; and - IR.23.01 multiple rows = IR.23.01 row R0730	Remove validation check: - IR.23.01 row R0140 = IR.02.01 row R0870 Amend validation check to assist calculation: - IR.23.01 multiple rows - IR.02.01 row R0870 = IR.23.01 row R0730

1.22 The changes outlined in Table 1 are intended to address concerns raised by respondents. In particular, the PRA has sought to improve clarity and avoid confusion in the reporting of equity- and liability-accounted subordinated liabilities within the Own Funds templates.

The PRA’s accountability framework

1.23 When making rules, the PRA is required to comply with several legal obligations. In CP22/25 and CP4/26, the PRA published its explanation of why the rules proposed in the CPs were compatible with its objectives and with its duty to have regard to the regulatory principles.footnote [1] The PRA does not consider that the responses to CP22/25 and Proposal 1 of CP4/26, or the changes made in the final policy outlined in this PS, materially change its analysis of how the policy advances its statutory objectives.

1.24 In carrying out its policymaking functions, the PRA is required to have regard to various matters. In the CPs, the PRA explained how it had regard to those matters that are most relevant to the proposed policy.

1.25 In making revisions to its proposals, such as the proposal to report projected data on FSCS liabilities, the PRA has had further regard to the regulatory principle that the burden or restriction, which is imposed on a person, or on the carrying on of an activity, should be proportionate to the benefits.

1.26 Where the final rules differ from the draft proposals in a way which is, in the opinion of the PRA, significant, the Financial Services and Markets Act 2000 (FSMA) requires the PRA to publish:

• details of the differences together with an updated cost benefit analysis; and
• a statement setting out, in the PRA’s opinion, whether or not the impact of the final rules on mutuals is significantly different from the impact that the:
  • draft rule would have had on mutuals; or
  • final rule will have on other PRA-authorised firms.

1.27 The PRA considers that the CBA published in CP22/25 remains a valid overall assessment of the impacts of the final policy. One respondent to CP22/25 provided arguments that certain costs were higher than initially assessed (in particular, temporary additional costs for firms reporting under both UK and EU regimes from sourcing dual sets of NACE codes, and costs associated with third-country branches reporting three-year projected FSCS liabilities). They also identified more efficient means of achieving the policy aims (such as incorporating total income and expenditure within an existing template rather than introducing a variant). This information has informed the PRA’s revisions to its final policy, such as the reduction from three- to one-year projections of FSCS liabilities, and the removal of the proposed template variant. The PRA does not consider that these amendments in the final policy materially change the costs set out in the CBA in CP22/25.

1.28 In addition, the PRA is introducing some further minor amendments and clarifications. These changes, primarily to improve clarity in reporting instructions, are expected to result in minimal incremental costs for firms.

1.29 In relation to Proposal 1 of CP4/26, the PRA considers that the targeted changes to draft policy described above do not give rise to a material change in the costs or benefits of the policy as assessed at consultation stage.

1.30 The PRA does not consider that the changes to the draft policy from both consultations have a significant impact on its statements on mutuals included in CP22/25 and CP4/26. It also does not consider that the impact of the final policy and rules in this PS is significantly different from the impact of the draft policy and rules on mutuals or mutuals as compared with other PRA-authorised firms.

Implementation and next steps

1.31 As set out in CP22/25, the PRA intends to implement the final policy and the rule instrument for reporting reference dates on or after Thursday 31 December 2026.

1.32 To ensure alignment, the final policy and the rule instrument for Proposal 1 of CP4/26 will be implemented on the same date. The changes to the Own Funds and Group Supervision Parts will take effect from that date, and the reporting changes set out in Table 1 will apply to reference dates falling on or after that date. The PRA confirms that interim reporting measures are not required, as set out in Chapter 3 – Feedback to responses to Proposal 1 of CP4/26.

1.33 The PRA intends to publish the updated reporting taxonomy shortly after this PS, including reporting changes from both consultations.

1.34 The PRA may contact affected firms in relation to the variation of waiver and modification directions to align with the final rules. The PRA encourages firms to contact it where they consider that their waiver or modification directions should be varied.

2: Feedback to responses to CP22/25 and final policy decisions

2.1 This chapter sets out the PRA’s feedback to responses to CP22/25 and its final decisions. The PRA has also made a number of additional clarifications and corrections that were not part of the proposals included in CP22/25.

2.2 The sections below have been structured as per the chapters of the CP:

• minor amendments;
• projected FSCS liabilities data for third-country branches;
• MALIR transfer to XBRL and other amendments relating to MALIR;
• PRA objectives analysis;
• cost benefit analysis (CBA); and
• implementation timeline.

Minor amendments

2.3 In CP22/25, the PRA consulted on a package of minor amendments to Solvency UK reporting and disclosure requirements. These proposals were intended to address issues identified following implementation of the Solvency UK reporting reforms at the end of 2024 and focused on improving clarity, consistency and data quality. These included:

• proposed amendments to non-life and life templates and instructions, notably (but not limited to) IR.05.04 and IR.16.01;
• the removal of certain reporting requirements for branches;
• transitioning to NACE 2.1 codes for certain reporting templates;
• the deletion of SS37/15; and
• additional minor amendments to templates and instructions to correct errors, update references, amend options, and address inconsistencies.

2.4 The PRA received six responses to its proposals on minor amendments. Respondents recognised the need to address ambiguities, errors, and inconsistencies, but raised issues related to the volume of changes, the complexity of some of the amendments, and the associated implementation costs and burden on firms. The points raised have been grouped by topic below with the accompanying PRA feedback.

Volume of changes

2.5 One respondent raised concerns regarding the volume and cumulative impact of the proposed changes. They noted that, while individual amendments were described as minor, the number of templates and instructions affected was significant and, when considered together, could require meaningful effort by firms to analyse, implement and test changes within systems and processes. The respondent further requested that the PRA, where possible, leave templates unaltered and instead amend instructions only, and avoid repurposing row identifiers and instead introduce new row identifiers for new or modified rows.

2.6 The PRA recognises the respondent’s concerns with the number of reporting amendments proposed in CP22/25. The purpose of CP22/25 was to clarify or correct errors that the PRA and firms had identified and considered necessary to resolve in order to support consistent reporting and robust data quality following the implementation of the large-scale reform in 2024. For this reason, the PRA seeks to address errors and areas requiring clarity across templates and instructions as soon as practicable: leaving inconsistencies between these can lead to issues with the information that firms submit to the PRA as well as overreporting when requirements have been revised only in instructions. While it is not possible for the PRA to rule out future amendments or corrections to the reporting within the scope of the 2024 reforms, the volume of amendments set out in CP22/25 was intended to be the most significant in the foreseeable future.

Non-life income, expenditure and business model analysis

2.7 One respondent argued that the introduction of template variant IR.05.04.04 would complicate reporting for solo firms as it would reduce the ability to repurpose quarterly data for Solvency and Financial Condition Report (SFCR) disclosures. The respondent considered that the limited differences between the quarterly and annual templates did not justify the change. The respondent instead suggested that the PRA include total income and expenditure within the quarterly template, further supporting its use to provide a complete profit and loss view.

2.8 In light of the feedback, the PRA considers that the respondent’s suggestion to add a new row in the existing IR.05.04.02 template to capture total income will sufficiently provide the information required for effective supervision. The PRA recognises that implementing this change will also incur implementation and maintenance cost to firms but that this would be less burdensome compared to implementing and maintaining the new variant template. The PRA has therefore decided that it will no longer introduce the new template variant and will retain the existing requirement that template IR.05.04.02 report solo quarterly reporting, group annual reporting, group quarterly reporting, solo disclosure and group disclosure.

2.9 Two respondents raised issues with the PRA’s proposal to add columns to IR.05.04 for the Solvency UK lines of business ‘Motor liability’, ‘Motor other’, ‘Fire and other damage to property’, and ‘General Liability’, as well as rows for reporting income and expenditure for direct and accepted reinsurance business. One respondent stated that the proposals would add complexity and cost without a clear benefit, requiring new data calculations and the potential need to update automated solutions in accounting software systems.

2.10 The PRA proposed to introduce the Solvency UK lines of business ‘Motor liability’, ‘Motor other’, ‘Fire and damage to property’, and ‘General liability’ to IR.05.04 to align the template with other non-life reporting templates. The PRA recognises the amendment incurs an implementation cost for firms, as estimated in the CBA set out in CP22/25. However, it considers that the improved consistency and comparability will support more effective identification of adverse trends and reduce the need for supervisory follow-up. The PRA will therefore implement the additional columns as consulted on in CP22/25.

2.11 One respondent highlighted that, for firms with immaterial reinsurance accepted, the introduction of additional rows would add unnecessary cost. They suggested that the PRA add a materiality threshold into the instructions for IR.05.04 and only require firms with material reinsurance accepted business to report these rows.

2.12 The PRA considers that adding a materiality threshold in the instructions for IR.05.04 would have the following consequences:

• the IR.05.04 template would no longer cover a firm’s entire business if the accepted reinsurance business was not required;
• the template requirement would be inconsistent with the approach in the PRA’s ‘Non-life technical provisions’ template (IR.17.01), where there is no materiality threshold for the accepted reinsurance rows;
• an industry aggregate of accepted reinsurance business could not be obtained;
• a comparison of accepted reinsurance reported in IR.05.04 across firms would not be accurate; and
• validation of the IR.05.04 template would be problematic because parts would not add up to the whole.

For these reasons, the PRA does not propose to introduce a materiality threshold and will implement the policy as consulted on.

2.13 One respondent suggested that the proposal to have no accepted reinsurance business reported for sub-classes was unclear and inconsistent with the intention to request reinsurance accepted information at the level of Solvency UK line of business. They noted that certain rows required the total business values by sub-class, which also included accepted reinsurance business. The respondent suggested the PRA could disable the rows that are for ‘total’ items to prevent this.

2.14 In this PS, the PRA has corrected errors in the template, so that the accepted reinsurance rows for sub-classes have been blocked out.

2.15 Two respondents outlined that requiring accepted reinsurance business to only be reported at Solvency UK line of business level, and not the sub-class level, would prevent a reconciliation check within the template across the business lines.

2.16 The PRA notes that this is the case for only the ‘gross provision for unearned premium’ row because this row does not have an insurance (direct) and accepted reinsurance split. For all other rows relating to gross measures, the columns for 'motor liability- personal-insurance (direct)' and 'motor liability- commercial- insurance (direct)' will sum to ‘motor liability- all’ for the insurance (direct) rows. For all rows relating to net measures, the columns for 'motor liability- personal-insurance (direct)' and 'motor liability- commercial- insurance (direct)' are not required. The reason the PRA is not asking for accepted reinsurance for the sub-classes is to reduce burden on firms. The PRA was responding to firm feedback that the splitting of accepted proportional reinsurance into sub-classes was difficult while ensuring the information met supervisory needs. The PRA will implement its proposal as consulted upon.

2.17 One respondent queried the PRA’s proposal to amend the approach to currency conversion for incurred claims. The PRA had proposed amending the instructions to IR.05.04 to require firms to apply the same conversion rate to claims paid and claims provision at the end of the reporting period and the claims provision at the start of the period. The respondent stated that this was not consistent with IFRS requirements and asked if the PRA would further require firms to report the deviation from IFRS.

2.18 The PRA had not intended to deviate from accounting conventions solely for reporting. The PRA has decided not to implement the proposed amendment in the IR.05.04 instructions to change the approach to currency conversion for incurred claims in rows R0610 and R0690.

2.19 One respondent queried the logic of deleting IR.05.04.07, citing that it did not benefit branches that would be reporting IR.05.04.01 instead. The respondent suggested the PRA retain the existing version of this template aimed exclusively at branches.

2.20 The PRA recognises that branches’ reporting requirements would remain unchanged. The PRA proposed deleting IR.05.04.07 to align the reporting of template IR.05.04.01 with its approach to templates IR.12.01 and IR.17.01. These templates do not have branch variants and differences in requirements are made clear in the template instructions. The PRA considers that removing the branch variant will improve efficiencies in the PRA’s analytical processes and consequently its use of resources. For this reason, the PRA will implement this change as consulted.

2.21 One respondent requested that the PRA provide clarity on whether there was a change in the requirement for row R1730. The PRA confirms there is no change to the instructions for row R1730. The instructions have been corrected to remove a duplicative error.

2.22 One respondent further requested that the PRA consider deferring the IR.05.04 changes to 2027 to allow adequate time for development and testing.

2.23 The PRA considers that the errors and inconsistencies identified in IR.05.04 should be addressed as soon as practicable. The PRA has therefore decided not to defer the IR.05.04 changes to 2027 and will maintain an implementation date of 31 December 2026.

2.24 One respondent identified a number of minor errors and inconsistencies across the template and instructions in IR.05.04. The PRA has updated the template and instructions to correct them.

Non-life annuities information

2.25 Two respondents raised issues with the PRA’s proposals to amend the templates and instructions for IR.16.01, which aimed to clarify the reporting of estimated claim payments and reserves for non-life annuities. They cited the complexity and duplication introduced by the amendments without a clear supervisory benefit. The respondents further queried the decision to use the 31 December 2024 reference date as a starting point to report information in columns C0017–C0019 of the IR.16.01 template and not all historic data.

2.26 The amendments to IR.16.01 relate to Solvency UK reporting reforms in PS15/24 and are intended to support supervisory understanding of the adequacy of firms’ non‑life annuity reserves. The PRA requires information on non-life annuity reserves at the start of the reporting period, payments made during the reporting period, and the remaining non-life annuity reserves at the end of the reporting period in order to assess the accuracy of provisions for non-life annuities.

2.27 The PRA had set out in the instructions that firms are not expected to retrospectively recalculate provisions for historic dates on a Solvency UK basis. This is an established principle across reporting, reflecting both the operational burden and the limited reliability of reconstructing historic data under a new regime. Therefore, the PRA proposed that firms provide this information from 31 December 2024.

2.28 The PRA has further reflected on this proposal following responses to CP22/25. It recognises that, as its final policy will be implemented from the 31 December 2026 reference date, firms should provide information from this date and not earlier. Therefore, the PRA will amend the date so that reporting of this historical information begins from 31 December 2026, aligned to the implementation date of the final policy. The IR.16.01 reporting template will otherwise be implemented as set out in CP22/25.

2.28 One respondent supported the formatting used to illustrate changes to the reporting template and instructions and requested that the PRA provide the same format for final policy to support implementation.

2.29 The PRA has set out the changes made to final policy since CP22/25 in this PS and supplemented this with high-level detail in Appendix 4, which it considers provides firms the clarity to implement the changes. However, given the extent of the revisions to IR.05.04 and IR.16.01 following firm responses to the PRA’s proposals, the PRA has decided to illustrate the changes to templates IR.05.04 and IR.16.01 in Appendix 9.

NACE 2.1

2.30 Three respondents provided feedback to the PRA’s proposal to transition to NACE 2.1 codes from the 1 January 2027 reporting reference date.

2.31 One respondent welcomed the proposal. Two respondents raised concerns over the misalignment with the EU’s earlier implementation date. They highlighted that UK insurers reporting under both UK and EU regimes would need to temporarily source both sets of NACE codes, adding cost to those insurers that have upgraded their systems. The respondents suggested that firms should be permitted to adopt NACE 2.1 on an optional basis ahead of the mandatory implementation date, possibly from 31 March 2026, to provide greater flexibility and support a smoother transition.

2.32 One respondent further raised the concern that, for firms reporting the IR.06.02 (List of assets) template, introducing additional NACE columns would create unnecessary cost for firms with automated processes. They suggested managing the transition to NACE 2.1 through instructions rather than template changes for this and the MALIR templates.

2.33 One respondent further urged the PRA to remain synchronised with the EU and avoid temporary differences in timing when industry data standards were adopted to minimise unnecessary reporting burden.

2.34 The PRA notes that CP22/25 closed on 4 March 2026, which means it would not have been possible for the PRA to publish the final policy by 31 March 2026. However, the PRA’s final policy will provide an opt-in for firms to report NACE 2.1 codes from the 31 December 2026 reporting reference date, ahead of the implementation date of 1 January 2027. This impacts reporting templates IR.06.02, IR.05.07 and IR.11.01. The PRA considers that this is the earliest reference date at which the change can be implemented without creating undue burden for both the PRA and firms, as an earlier implementation would require a separate taxonomy update. The PRA will implement these changes through the reporting templates to support clarity in reporting and reduce the dual reporting period by a quarter.

2.35 In finalising its policy, the PRA identified that it had not included reporting template IR.05.07 in its proposal to transition to NACE 2.1 codes in CP22/25. The PRA considers that updating this reporting template in line with that for IR.06.02 would allow firms to implement the changes at the same time and will therefore include IR.05.07 in its implementation. This additional change will introduce minimal incremental implementation and maintenance costs for firms. However, the PRA considers that, as firms have supported the update of NACE codes, updating IR.05.07 now rather than later would be welcomed by firms.

Removal of a reporting requirement from the Branch Legal Entity template and Volatility Adjustment (VA) reporting update from CP20/25

2.36 One respondent expressed support for the PRA’s proposal to delete the row for ‘Total assets available to UK policyholders’ from the Branch Legal Entity template (IR.01.04.07). However, they requested that the PRA avoid amending the template and instead clarify in the instructions that the row should be left blank. Similarly, one respondent noted the PRA’s proposal to remove the ‘Volatility Adjustment’ row from IR.01.02.07 (Basic information – general – branch) as a consequence of the reporting proposals in CP20/25. They also requested that the PRA avoid amending the template and instead clarify in the instructions that the row should be left blank.

2.37 The PRA recognises that changes to a template can incur costs for firms. However, the PRA considers that making this revision now will provide long-term benefits with clearer templates and more concise instructions because redundant information will be removed. The PRA will therefore remove these reporting requirements as set out in CP22/25. The PRA considers that updating the templates alongside the accompanying reporting and taxonomy updates as part of this PS will not be overly burdensome for branches and will, in the long term, support clarity and minimise the risk of over-reporting.

Deletion of SS37/15 – Solvency II: internal model reporting codes and components

2.38 Two respondents expressed support for the PRA’s proposals to relocate information on codes and components for internal model reporting from SS37/15 into the instructions for template IR.25.05 and to subsequently delete the SS.

2.39 The PRA confirms it will delete SS37/15 and introduce the minor amendments to the IR.25.05 template and instructions broadly as consulted upon.

Other minor template and instructions amendments

2.40 Three respondents requested further minor clarifications and identified errors and inconsistencies across the templates and instructions included in the PRA’s proposals in this section of CP22/25. The PRA has corrected these in its final templates and instructions. The high-level changes against the CP proposals are outlined in Appendix 4.

2.41 One respondent commented that changing the definition of claims in IR.14.01 to exclude claims management expenses might be burdensome. The PRA considers that claims management expenses for life insurance business are a very small part of total expenses, and the PRA’s examination of the data shows inconsistent approaches to calculating this item. The PRA expects that removing the requirement to allocate claims management expenses at product level should produce some savings for firms. The PRA is therefore proceeding with this change.

2.42 One respondent noted inconsistencies relating to labelling for fund reporting in IR.01.03 and other templates, including some that were not included in CP22/25.

2.43 For those templates not included, the corrections relate to cell labels and would not incur implementation costs. The PRA has therefore made corrections to support high quality reporting across the templates (IR.02.01, IR.05.03, IRR.12.01, IR.12.05, IR.12.06, IR.25.04, IR.25.05, IR.26.01, IR.26.02, IR.26.03, IR.26.04, IR.26.05, IR.26.06 and IR.26.07) and instructions impacted. It has standardised the labels as Z0020 Ring-fenced fund, matching adjustment portfolio or remaining part (abbreviated where not all options apply) and Z0030 Fund/Portfolio number. The instructions to IR.01.03 now include an explanation of how firms should use the fund codes where there is a matching adjustment portfolio within a ring-fenced fund. The method set out is consistent with current industry practice.

2.44 One respondent requested that the PRA confirm that the definition of ‘earned premium’ to be used in templates IR.19.01 and IR.19.02 is the same as that in the PRA Rulebook Glossary, and that the PRA provide clarification in the instructions.

2.45 The PRA has amended the instructions to templates IR.19.01 and IR.19.02 to clarify that the definition of ‘earned premium’ to be used in these templates is the same as that in the PRA Rulebook Glossary.

Consequential and additional minor amendments

2.46 The PRA has made an additional number of small amendments to templates and instructions, which were not envisaged in its proposals in CP22/25, while finalising its policy. These included consequential amendments identified from responses to the CP as well as additional minor amendments. These are set out below.

Consequential amendments to:

• update the cross reference in template IR.01.01 in line with the PRA’s final policy to remove the template IR.05.04.07 for branches;
• clarify the instructions for IR.01.01; and
• correct the labels in template IR.01.02.

Additional minor amendments to:

• update template IR.05.04 to correct which cells are enabled or disabled and correct row and column labels;
• update instructions for IR.05.04 to provide clarity and remove inconsistencies;
• update column labels in template IR.16.01 and clarify the instructions;
• the instructions for IR.19.01 and IR.19.02 templates to improve clarity of reporting for currency and classes of business;
• clarify instructions for IR.21.04 and IR.30.03; and
• not implement certain parts of the amendments to the instructions for IR 28.01 and IR.28.02 as this would introduce an inconsistency with the PRA Rulebook.

2.47 These additional minor amendments are primarily to improve clarity in the reporting instructions and are expected to result in minimal incremental costs for firms.

Projected FSCS liabilities data for third-country branches

2.48 In CP22/25, the PRA proposed to introduce a requirement for third‑country branch undertakings to report projected FSCS liabilities within the non‑life income, expenditure and business model analysis template IR.05.04 over the three business plan years. The proposal aimed to facilitate a more tailored approach to the PRA’s supervision of branches by providing the PRA with sufficient data on FSCS-protected liabilities to assess whether a branch’s outwards reinsurance arrangements could pose higher risks to the PRA’s primary objectives.

2.49 As set out in SoP7/24 (paragraph 1.13), branches with significant FSCS-protected liabilities as a proportion of total branch liabilities should expect more intensive supervisory scrutiny of reinsurance arrangements to ensure appropriate UK policyholder protection. Currently, third-country branches provide data on FSCS arrangements for only the current reporting period. This does not give the PRA sight of whether a branch is likely to significantly increase its FSCS-protected liabilities as a proportion of total branch liabilities in the near future, potentially increasing risks to policyholder protection. Receipt of projected data would avoid the risk of firms having to rearrange their existing outwards reinsurance programme if the PRA were to judge that the risks to its primary objectives were too high.

2.50 One respondent commented on this proposal. The respondent stated that they recognised that the PRA may wish to undertake more intensive supervision of third-country branches close to the threshold above which the PRA expects a branch to subsidiarise. This threshold is currently £600 million of FSCS-protected liabilities (SoP7/24). However, the respondent considered that the additional reporting would add a material burden for third‑country branches, particularly for those with FSCS‑protected liabilities well below the subsidiarisation threshold. They noted that branches expected to pose material prudential risk would, in any event, be engaging proactively with the PRA. Therefore, the supervisory benefit of the additional data for smaller branches may be limited relative to cost. The respondent asked the PRA to exclude such branches from the proposal.

2.51 The respondent also noted that the proposal appeared to be inconsistent with the PRA’s SCGO. The respondent disagreed with the PRA’s assessment of the proposal’s impact on the SCGO in CP22/25.

2.52 The PRA understands the respondent’s concerns that the data requirements would incur implementation costs for third-country branches. The PRA has observed that third-country branches’ levels of FSCS-protected business, including smaller branches that remain well below the subsidiarisation threshold, can change materially from the point of authorisation or the end of the reported year to the next. Receipt of projected FSCS-protected liabilities enables the PRA to anticipate such scenarios and engage with firms early to reduce the risk posed to the PRA’s objectives prior to crystallisation and the potential costs to industry of remediation.

2.53 In CP22/25, the PRA proposed firms report three years of projections to align with existing reporting templates and reduce the risk that, due to reporting schedules, firms have to adjust their reinsurance programme for the current year in order to meet the PRA’s expectations. The PRA reiterates that this data will support its assessment of outwards reinsurance arrangements and is not solely required to monitor branches moving closer to the subsidiarisation threshold.

2.54 Based on the response received, the PRA has reviewed its original proposal and has made the decision to reduce the data collection to one plan year. This reduces the data request from eighteen data points to six, with the aim to improve proportionality compared with the proposal in CP22/25 while still providing the PRA with the information it needs to undertake effective and timely supervision. The PRA considers that one year of projected data would still give the PRA earlier sight of whether a branch is likely to significantly increase its FSCS-protected liabilities as a proportion of total branch liabilities in the near future, and the associated risks to policyholder protection related to the firm’s reinsurance arrangements. It accepts the minimal risk arising from reporting schedules as outlined in paragraph 3.4 of CP22/25.

2.55 Receipt of the data allows the PRA to apply supervisory proportionality to branches that pose reduced risk to the PRA’s objectives (ie reduced PRA engagement with branches whose reinsurance arrangements are in line with expectations). The PRA expects that this data should be readily available for internal business planning purposes and new modelling or data sourcing to meet the requirement should not be required.

Matching Adjustment Asset and Liability Information Return: Transfer to XBRL and other amendments

2.56 In CP22/25, the PRA proposed a package of reforms to MALIR. These included:

• transferring the MALIR templates from Excel to XBRL;
• removing redundant and duplicative reporting requirements;
• reducing the frequency of cashflow reporting for certain templates;
• incorporating consequential changes as part of PS10/24 – Review of Solvency II: Reform of the Matching Adjustment;
• introducing NACE 2.1 codes;
• simplifying the reporting of certain narrative documentation and pairing basis requirements; and
• other minor revisions and clarifications.

2.57 The PRA received three responses to its proposals on the transfer of MALIR to XBRL and associated amendments. Two respondents were supportive of the PRA’s proposal to move the MALIR templates from Excel to XBRL and integrate them into the Bank of England’s insurance taxonomy, noting this will significantly improve the robustness of reporting. One of the two respondents further highlighted that the proposals would materially reduce reporting burden while improving the clarity of submissions.

2.58 The PRA notes the support for the objectives of improving data quality and consistency. One respondent requested that all future data collections should use £ rather than £ millions, to ensure consistency across regulatory reporting. The PRA has noted the request for requiring future data collections to be in £ instead of £ millions and will consider this for future collections.

2.59 One respondent raised concerns that the proposed move to XBRL would result in significant additional software and licensing costs, and that the proposed implementation timeline would be challenging for firms to meet. The respondent urged the PRA to allow more time for implementation and to introduce a threshold so that firms with smaller matching adjustment portfolios would automatically qualify for additional time.

2.60 The PRA notes the concerns regarding implementation costs and timelines, particularly for firms with smaller matching adjustment portfolios. However, the PRA also notes that firms will have approximately a year between publication of this PS and the date on which they are required to submit the data. The PRA considers this sufficient time for firms to prepare for the first XBRL MALIR submissions in 2027. As set out in the implementation and next steps section, the PRA encourages firms to engage early with the PRA through their usual supervisory contacts, where they identify potential implementation issues.

2.61 Two respondents welcomed the proposal to reduce the frequency of cashflows reported in the MALIR templates from monthly to annual, noting the significant reduction in file sizes and validation work required. One of these respondents requested early adoption of annual cashflow reporting, beginning with reporting for 31 December 2025, in order to realise the reporting burden reduction sooner.

2.62 The PRA notes the request for early adoption but also notes that it was not practicable to publish the PS sufficiently in advance of the 31 December 2025 MALIR submission date.

2.63 One respondent encouraged the PRA to implement validations for MALIR reporting that are consistent with those used in other XBRL reporting templates, to reduce avoidable formatting differences between firm submissions and the data required for PRA processing.

2.64 The PRA confirms that it will implement validations for the matching adjustment templates that are consistent with those used in other Solvency UK XBRL reporting, in order to promote high data quality and to take full advantage of the move to XBRL.

2.65 One respondent noted that the merging of MALIR 4 into IR.22.03 resulted in the removal of a field explicitly capturing the total matching adjustment benefit for each portfolio. The respondent suggested that this information be reintroduced into IR.22.03 to provide validation for the information in MA.01.01 and MA.02.01.

2.66 The PRA considers that this information can be obtained from IR.22.01 and therefore does not consider it necessary to introduce this information in IR.22.03.

2.67 One respondent requested clarification in the final guidance on the sign convention to be used for liabilities reported in the matching adjustment templates.

2.68 Following the request to clarify the sign convention for MA liabilities in the instructions for template MA.02.01, the PRA has made changes to the instructions for MA.02.01 clarifying that liability outflows and asset inflows should both be presented as positive values.

2.69 Finally, one respondent noted that the matching adjustment templates require cashflows to be reported gross of reinsurance, which is inconsistent with the matching tests that are performed on a net of reinsurance basis. The respondent highlighted that this could require additional data manipulation and suggested that, if reporting gross of reinsurance is the PRA’s preferred approach, this should be applied consistently to future data collections, such as the Life Insurance Stress Test.

2.70 The PRA will consider this further in the context of future exercises, including the Life Insurance Stress Test.

PRA objectives analysis

2.71 Few of the consultation responses addressed the PRA’s objectives directly. However, one respondent disagreed with the PRA’s assessment in CP22/25 that the proposals would not have a material impact on the PRA’s SCGO. The respondent argued that regulatory reporting was resource intensive and even minor amendments incurred considerable one-off implementation costs. In particular, the respondent highlighted the proposals for branches to report projected FSCS-protected liabilities in the three business plan years within IR.05.04.footnote [2] Furthermore, the respondent stated that the misalignment with the EU for the NACE 2.1 codes transition, which is set out in the ‘Proposed minor amendments’ section’, would create an additional reporting burden on UK insurers operating in the EU compared to EU insurers. The respondent requested that the PRA provide a more comprehensive assessment of the impact on the SCGO in its PS.

2.72 The PRA recognises the reporting burden and costs faced by firms and that even minor amendments to templates can be costly to implement. In developing its proposals, the PRA has weighed these considerations against the costs to both firms and the PRA of working with data impacted by inconsistencies, errors or unclear instructions. Consequently, the PRA has sought to limit the revisions to reporting templates and instructions to those areas requiring correction or improved clarity.

2.73 The proposal for branches to report projections of FSCS‑protected liabilities will support the PRA in advancing its primary objectives. Taking consultation responses into account, and reassessing marginal costs and benefits, the PRA concluded that reducing the reporting to a one‑year projection is more proportionate compared with the three-year projections proposed in CP22/25.

2.74 The PRA considers that the policies in this PS will provide benefits for firms in the long term by bringing greater clarity, which will reduce interpretation costs while improving the quality of the data received by the PRA to support effective supervision.

Cost benefit analysis (CBA)

2.75 One respondent queried the PRA’s cost estimates for the proposals set out in CP22/25, suggesting that the actual costs could be significantly higher than those estimated.

2.76 The respondent acknowledged the difficulty in obtaining precise cost figures but cited two examples in support of their view on impacts on competitiveness and growth. First, some insurers may face a temporary dual regulatory burden when sourcing NACE codes for asset reporting under both UK and EU regimes. Second, the respondent highlighted potential impacts on third‑country branches operating in the UK. The PRA has considered these responses and revised policy proposals accordingly.

2.77 The PRA’s cost estimates were based on the cost estimates (adjusted for inflation) and methodology used in the recent Solvency UK reporting reforms, as set out in CP14/22 – Review of Solvency II: Reporting Phase 2 and finalised in PS3/24 – Review of Solvency II: Reporting and disclosure phase 2 near-final. These estimates are, in turn, based on the cost data provided by insurers in response to the PRA’s 2022 Solvency II reporting costs survey.

2.78 The respondent also queried why the PRA CBA Panel had not been consulted ahead of CP22/25. SoP14/24 – The Prudential Regulation Authority’s approach to cost benefit analysis states that the CBA Panel will be consulted where the estimated annualised net direct cost to PRA firms exceeds £10 million. The respondent cited that as the implementation costs could be as high as £12.2 million, as set out in the CP, they expected this consultation to fall within scope. The PRA clarifies that the CBA Panel threshold relates to annualised net costs. While the CP estimated one‑off implementation costs of £6.5 million to £12.2 million, this corresponds to annualised costs of £0.8 million to £1.4 million – below the £10 million annualised threshold. Accordingly, consultation with the CBA Panel was not required.

Implementation

2.79 In CP22/25, the PRA proposed to implement the final policy and the rule instrument for reporting reference dates falling on or after Thursday 31 December 2026.

2.80 The PRA received one response raising concerns about the implementation timeline for the proposed changes and the challenge from the consultation timing coinciding with the reporting period. While they agreed that the proposed implementation date was appropriate, they emphasised the importance of early confirmation by the PRA of the publication dates for the updated taxonomy. In particular, they requested that the public working draft (PWD) be published no later than May 2026 and that final policy materials, including the final taxonomy, be published at least six months in advance of the implementation date. The respondent also requested early clarity on whether new validations would be introduced as part of the CP22/25 updates, noting that sufficient lead time was needed to support system changes and to allow for adequate User Acceptance Testing (UAT).

2.81 The PRA recognises the importance of providing firms with sufficient clarity and time to support effective planning, system development and testing. To support this, the PRA published an early announcement in June, ahead of the date of this publication, confirming that final policy would be published in July. The PRA also published the PWD in April 2026, ahead of the May 2026 date requested by firms. The PRA considers that the proposed implementation timeline provides firms with sufficient time to implement and test the changes. The PRA continues to encourage firms to engage early with the PRA, including through their usual supervisory contacts, where they identify potential implementation issues.

3: Feedback to responses to Proposal 1 of CP4/26

3.1 This chapter sets out the PRA’s feedback to the responses received in relation to Proposal 1 of CP4/26 – UK Solvency II Own Funds: Updates and fixes to rules and expectations and its final policy decisions. Details of how the final policy differs from the policy consulted on are set out in the ‘Changes to draft policy’ section in Chapter 1.

3.2 This PS considers only responses to Proposal 1 of CP4/26 and general comments that the PRA considers to be directly relevant to that proposal. This reflects the PRA’s decision to align the implementation of Proposal 1 of CP4/26 with the reporting changes arising from CP22/25, to support a more efficient and streamlined implementation for firms. All other responses to CP4/26, including comments related to Proposals 2 to 4, will be addressed in a separate PS, which the PRA intends to publish in 2026 H2.footnote [3]

3.3 The responses have been grouped into the following key areas:

• removal of the permission requirement;
• consequential reporting amendments;
• cost benefit analysis (CBA); and
• implementation timeline.

Removal of the permission requirement

3.4 In Proposal 1 of CP4/26, the PRA proposed toremove the requirement for firms to obtain a classification of own funds permission under section 138BA of FSMA for equity‑accounted subordinated liabilities. This was intended to bring the treatment of equity-accounted subordinated liabilities in line with the treatment of liability-accounted subordinated liabilities. This outcome was to be achieved through including these instruments in the lists of recognised own funds items for each tier of capital in rules 3A, 3D and 3F of the Own Funds Part, with consequential amendments to the Group Supervision Part.

3.5 Following implementation, issuances of equity-accounted subordinated liabilities would remain subject to the standard pre-issuance notification (PIN) process, as required by Own Funds 5 and Group Supervision 6. The permission requirement in Own Funds 3.4 would continue to apply to items not included in the lists of recognised own funds items for each tier of capital in rules 3A, 3D and 3F of the Own Funds Part.

3.6 All respondents who commented on Proposal 1 supported removing the permission requirement and noted that the current approach imposes avoidable burden. Respondents also supported bringing equity-accounted subordinated liabilities within the standard PIN process, as a proportionate approach that maintains appropriate supervisory oversight while retaining the permission regime for genuinely novel or non-standard items.

3.7 In light of the positive responses, the PRA has decided to proceed with the removal of the permission requirement as consulted. The PRA received no specific comments on the draft amendments to the Own Funds Part or the consequential changes to the Group Supervision Part and does not consider that changes are necessary. The final rule changes are set out in Annex A and B of Appendix 3.

Consequential reporting amendments

3.8 As part of Proposal 1 of CP4/26, the PRA also proposed to make consequential amendments to reporting templates and instructions to set out how equity-accounted subordinated liabilities should be reported following removal of the relevant permission requirement.

3.9 Two respondents raised concerns about the consequential reporting amendments. Both respondents supported the aim of greater consistency in reporting but expressed concern over the clarity and operability of the proposed changes, including the proposed terminology, differences in presentation between IR.02.01 and IR.23.01, and the potential for double counting within the reconciliation reserve calculation.

3.10 In light of these responses, the PRA has reconsidered the proposed consequential reporting amendments and made targeted changes to the final policy, as set out in Table 1 of Chapter 1 – Overview. High level details are included in Appendix 4 – Table of amendments to reporting templates and instructions alongside other reporting changes to support implementation.

3.11 The PRA agrees that the proposed terminology used for the relevant reporting materials in CP4/26 could give rise to confusion and a lack of conceptual clarity. The PRA notes that within the PRA’s rules and policy materials, subordinated liabilities comprise financial instruments that may be accounted for as either equity instruments or financial liabilities. The PRA has revised the terminology used in the Own Funds reporting templates and instructions (IR.23.01, 02, 03 and 04) to more clearly represent both equity‑accounted and liability‑accounted subordinated liabilities. In line with a suggestion from one respondent, the PRA has adopted the label ‘equity- and liability-accounted subordinated instruments’ for this purpose.

3.12 The PRA has decided not to proceed with the proposed terminology changes to the Solvency II balance sheet template (IR.02.01). Following revision to the wording in the IR.23 templates, the PRA considers that this change is no longer necessary. References to ‘subordinated liabilities’ in IR.02.01 will therefore remain unchanged and continue to refer to liability‑accounted subordinated liabilities recognised on the Solvency UK balance sheet. The IR.02.01 instructions will still be updated to ensure clarity.

3.13 The PRA has considered the concerns about differences in presentation between IR.02.01 and IR.23.01, including a suggestion to align the presentation of subordinated liabilities across the two templates through bringing equity-accounted subordinated liabilities into the subordinated liabilities row in IR.02.01. The PRA considers that such alignment is not necessary for own funds reporting following the removal of the permission requirement, and that this change to the Solvency UK balance sheet template would be beyond the scope of the proposal and inconsistent with the template’s purpose. The PRA considers that clarifying the treatment of equity- and liability-accounted subordinated liabilities within IR.23.01 supports disclosure of the composition of own funds and reflects the distinct purposes of the templates.

3.14 The PRA has also considered concerns regarding the reconciliation reserve calculation in IR.23.01, including the risk of double counting arising from the treatment of equity‑accounted subordinated liabilities and the absence of a redesigned template. To avoid double counting, firms will need to deduct the value of equity-accounted subordinated liabilities from the excess of assets over liabilities as part of the determination of the reconciliation reserve.footnote [4] This is consistent with all other equity-accounted capital items, which represent a part of the excess of assets over liabilities. To support this calculation, the PRA has retained and updated the validation check for row R0730 in IR.23.01 (‘Other basic own funds items’) and has updated the IR.23.01 reporting instructions to provide further detail on this calculation.

3.15 The PRA also recognises, as noted by one respondent, that no formulation is perfect and that clarity matters more than linguistic neatness. The PRA considers that the final policy is a proportionate approach that supports improved consistency and clarity in reporting and facilitates implementation, while limiting additional complexity for firms.

Cost benefit analysis (CBA)

3.16 In its response to the CBA for Proposal 1, one respondent, while agreeing that the proposal would ‘reduce avoidable burden’, noted that even minor reporting changes can give rise to one-off implementation costs for firms. They also noted that unclear terminology may generate additional costs through rework and/or supervisory follow-up.

3.17 In CP4/26, the PRA noted that it does not expect Proposal 1 to impose significant implementation costs on firms. In addition, the PRA aims to minimise incremental one-off costs by aligning the implementation of Proposal 1, including the associated reporting changes, with other reporting updates. The targeted amendments described above are intended to improve clarity and ensure consistent interpretation, thereby reducing the need for rework or supervisory follow-up.

Implementation

3.18 In CP4/26, the PRA proposed an interim reporting position where the rule change to remove the permission requirement would take effect ahead of the corresponding reporting updates.footnote [5] One respondent asked the PRA to reconsider this sequencing to avoid the need for an interim position and the associated operational effort.

3.19 The PRA has decided to align the implementation of the rule changes with the taxonomy updates, removing the need for an interim position. The changes will therefore take effect from 31 December 2026, as set out in Chapter 1.

3.20 Two respondents raised concerns about the proposed implementation timeline, including providing sufficient lead time for firms to implement and test reporting changes safely alongside ongoing business activity. One respondent suggested allowing a minimum of six months between publication of final policy and the first reporting reference date and questioned whether the proposed implementation date is feasible.

3.21 As outlined in paragraph 2.81 of this PS, the PRA considers that the implementation timeline provides sufficient time for firms to implement and test the changes and will continue to engage with firms where implementation issues are identified.

3.22 One respondent also commented that the two‑month consultation period was inadequate. In setting the consultation period, the PRA sought to balance providing sufficient time for responses against the benefits of progressing the proposal in a timely manner, including enabling alignment with the implementation of reporting changes arising from CP22/25. The PRA will consider this for future policymaking.

1. Section 138J(2)(d) FSMA.
2. This is set out further in the ‘Projected FSCS liabilities data for third-country branches’ section of this PS.
3. As explained in paragraph 1.10 of CP4/26.
4. The value of equity-accounted subordinated liabilities will equal the value of ‘equity- and liability-accounted subordinated instruments’ in IR.23.01 minus the value of ‘subordinated liabilities’ in basic own funds in IR.02.01.
5. See paragraph 2.10 of CP4/26.

See paragraph 2.10 of CP4/26.

The value of equity-accounted subordinated liabilities will equal the value of ‘equity- and liability-accounted subordinated instruments’ in IR.23.01 minus the value of ‘subordinated liabilities’ in basic own funds in IR.02.01.

As explained in paragraph 1.10 of CP4/26.

This is set out further in the ‘Projected FSCS liabilities data for third-country branches’ section of this PS.

Section 138J(2)(d) FSMA.

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