News & Opinion

Restating Solvency II Requirements ahead of 2026 Implementation

05 August 2025
Ricardo Melo

On 17 July 2025, the Prudential Regulation Authority (PRA) published Policy Statement PS12/25, setting out its final rules for the restatement of the Solvency II provisions into the PRA Rulebook, with effect from 1 January 2026.

This marks a significant step in the UK’s post-Brexit regulatory divergence, moving away from retained EU law and embedding key prudential rules into a UK-specific framework. PS12/25 follows parts of Consultation Papers CP8/24 and CP13/24, and covers updates for insurers under Solvency II, including Matching Adjustment and Standard Formula provisions.

The Rulebook changes relevant to Solvency II firms include:

  • Updated Rulebook Parts impacting capital and solvency calculations.
  • Updated Supervisory Statements: Amendments to SS7/13, SS9/13, SS10/18, and SS3/17.
  • Clarified ECAI mappings, aligning credit rating agency outputs to UK-specific credit quality steps.

The PRA emphasises that these changes are policy-neutral, aiming to simplify and consolidate existing rules without altering their underlying intent. PS12/25 is directly relevant to UK Solvency II insurance and reinsurance firms.

With the rules coming into force on 1 January 2026, UK Solvency II firms should:

  • Review and revise internal policies and documentation to align with the new PRA Rulebook format.
  • Update governance structures and control frameworks to reflect revised definitions and capital requirements.
  • Train staff on the updated rules and associated terminology.
  • Monitor future PRA publications, particularly those concluding the implementation of CP13/24.

PS12/25 is a key step in the UK’s post-Brexit regulatory consolidation. While largely technical, these changes require proactive steps to ensure full compliance by the 2026 deadline. If your firm requires tailored support in implementing the revised Solvency II framework, we are here to help. Please get in touch to discuss how we can assist you.