Laura WilesThe PRA is consulting on further changes to its policy on insurance third-country branches.
In 2024, the PRA revised its approach to third-country branches, introducing greater proportionality under the Solvency II review and clarifying existing policies. The reforms were intended to support the attractiveness of the UK market to international insurers.
The current consultation sets out a number of further proposals arising from the rollout of the 2024 reforms, including addressing newly identified inconsistencies across various reform areas, furthering streamlining the policy framework and clarifying further expectations for branches:
- Increasing the threshold of insurance liabilities covered by the FSCS above which a third-country insurance undertaking may need to establish a subsidiary from £500m to £600m;
- Introducing new rules based on quantitative thresholds to replace the modification by consent for Solvency II reporting for third-country branches;
- Clarifying expectations for third-country branch undertakings regarding the completion of an Own Risk and Self Assessment (ORSA) report and Resolution Report;
- Restating or disapplying certain EIOPA Branch Guidelines in rules and policies;
- Absorbing the reporting modifications by consent into the PRA Rulebook;
- Adjusting reporting requirements for smaller branches, reinstating two annual reporting templates and discontinuing quarterly reporting; and
- Updating guidance in response to frequent queries, particularly in relation to the ORSA and Resolution Reports.
The implementation date for most of the changes is proposed to be 31 December 2026. The consultation closes on 16 December 2025.