UK Insurance Regulatory Update: PRA Finalises Changes to Third-Country Branch Regime

The Prudential Regulation Authority has published Policy Statement (PS13/26), confirming its ongoing supervisory approach to UK branches of third-country insurers. Swiss general insurers remain subject to separate requirements and are therefore outside the scope of these changes. 

PS13/26 introduces a number of changes to the UK third-country branch regime, including: 

• an increase of the subsidiarisation threshold from GBP 500 million to GBP 600 million of Financial Services Compensation Scheme (FSCS)–protected liabilities, effective 21 May 2026
• confirmation that FSCS liabilities will continue to be assessed on a gross basis for now, without treating reinsurance as reducing the relevant exposure; the PRA has, however, indicated that it will consider in due course whether FSCS liabilities remain the appropriate basis for the relevant threshold methodology
• the revocation of modifications by consent (MbC) concerning reporting for third-country branches (excluding pure reinsurance branches) and its replacement PRA Rulebook with Rulebook requirements based on quantitative thresholds, which 
  • require full reporting from branches with gross written premiums (GWP) of at least GBP 1 billion or GBP 2 billion in branch provisions
  • require reduced reporting from smaller branches (i.e., those with GWP below GBP 1 billion or branch provisions below GBP 2 billion) in line with the existing MbC reporting templates
  • discontinue quarterly reporting for all third-country branches
• the future disapplication of the “Investments” part of the PRA Rulebook for pure reinsurance branches and therefore the corresponding MbC relating to the relief for the same for pure reinsurance branches

Most of the new reporting changes take effect on 31 December 2026. However, firms transitioning from the existing modification by consent reporting framework to the full reporting suite will have until 31 December 2027.

For third-country branches there should not be significant changes in practice, other than the discontinuation of quarterly reporting. However, third-country branches with either (i) GWP of at least GBP 1 billion or (ii) branch provisions of at least GBP 2 billion should begin to familiarise themselves with the requirements concerning submission of the full reporting suite.

Firms operating close to the relevant thresholds should also consider whether future growth in UK business could bring them within the scope of the enhanced reporting requirements.