PS18/26 Solvency UK Reporting: The 31 December 2026 Changes

ByRegReportingDesk

On 29 July 2026 the Prudential Regulation Authority published PS18/26, the policy statement that finalises the Solvency UK reporting and disclosure changes firms will apply for reporting reference dates on or after 31 December 2026. It sets out the PRA’s response to CP22/25 on post-implementation reporting and disclosure amendments and to Proposal 1 of CP4/26 on own funds. The reporting changes from both consultations are implemented through a single taxonomy update, while the own-funds permission change is made through amendments to the Own Funds and Group Supervision Parts of the PRA Rulebook.

The population it reaches is wide: UK Solvency II firms, the Society of Lloyd’s and its members and managing agents, insurance and reinsurance groups, UK holding companies, and insurers running a UK branch. For most, the work is a set of template, instruction and one permission change in a single taxonomy release. The edits are individually small but reach the balance sheet, own funds, matching adjustment, asset-coding and branch templates. The exposure sits in build and testing against the new taxonomy, not in reading the policy.

Related reading: our note on the PRA’s Basel 3.1 market risk and Pillar 3 reporting changes.

The dates that matter

PS18/26 is deadline-driven, so start from the calendar:

  • 4 March 2026: CP22/25 closed to responses.
  • April 2026: the PRA published the public working draft (PWD) of the taxonomy.
  • 29 July 2026: PS18/26 published, with final policy in the appendices and the updated taxonomy to follow shortly after.
  • 31 December 2026: implementation. The reporting and rule changes apply to reference dates on or after this date, and NACE 2.1 becomes available on an opt-in basis.
  • 1 January 2027: NACE 2.1 becomes the mandatory classification for the affected asset templates.
  • 2027: first XBRL submissions of the Matching Adjustment Asset and Liability Information Return.

The two consultations behind the Solvency UK reporting changes

CP22/25 was the larger package: it amended reporting and disclosure templates and instructions to resolve queries, inconsistencies and errors from the 2024 Solvency UK reporting reforms in PS15/24, moved certain asset templates to NACE 2.1, transferred the MALIR return to XBRL, and added a projected FSCS liabilities data point for third-country branches. Proposal 1 of CP4/26 was narrower: it removes an own funds permission and makes the reporting edits that follow. The PRA received six responses to CP22/25 and three to Proposal 1, and confirmed both take effect on 31 December 2026 with no interim reporting measures.

The own funds classification permission is going

The headline rule change is the removal of the requirement to obtain a classification of own funds permission under section 138BA of the Financial Services and Markets Act 2000 for equity-accounted subordinated liabilities. The PRA achieves this by adding those instruments to the lists of recognised own funds items for each tier in rules 3A, 3D and 3F of the Own Funds Part, with consequential amendments to the Group Supervision Part, aligning their treatment with liability-accounted subordinated liabilities.

Read the change narrowly. The pre-issuance notification process under Own Funds 5 and Group Supervision 6 continues to apply to issuances of equity-accounted subordinated liabilities, and the permission requirement in Own Funds 3.4 still applies to any item not on the recognised lists. Genuinely novel or non-standard instruments therefore still route through permission. The discipline is familiar from our explainer on prior permission for own funds reductions.

What actually changes in the own funds templates

The consequential edits landed differently from the CP4/26 draft after respondents flagged clarity and double-counting concerns. On terminology, the PRA adopted the label ‘equity- and liability-accounted subordinated instruments’ in the own funds templates and instructions IR.23.01, IR.23.02, IR.23.03 and IR.23.04, but decided not to change the Solvency II balance sheet template IR.02.01. References to ‘subordinated liabilities’ in IR.02.01 stay as they are and still mean liability-accounted subordinated liabilities, with only the instructions updated. Do not read the new IR.23 label back into the IR.02.01 row and pull equity-accounted instruments into it.

On the reconciliation reserve, firms deduct the value of equity-accounted subordinated liabilities from the excess of assets over liabilities, consistent with other equity-accounted capital items, to avoid double counting. The PRA retained and updated the validation check for row R0730 of IR.23.01 (Other basic own funds items), and removed the check tying IR.23.01 row R0140 to IR.02.01 row R0870.

NACE 2.1: opt-in now, mandatory from January 2027

The move to NACE 2.1 affects asset templates IR.06.02 (list of assets), IR.11.01 (assets held as collateral) and IR.05.07, which the PRA added at final policy stage so firms can implement the codes across the asset templates together. The status point is easy to get wrong under time pressure: NACE 2.1 is not mandatory at the 31 December 2026 reference date. From that date it is available on an opt-in basis, and it becomes mandatory only from 1 January 2027. The PRA set the opt-in to shorten, by a quarter, the dual-coding period for UK insurers that also report in the EU, which moved to the new codes earlier.

MALIR moves from Excel to XBRL

The Matching Adjustment Asset and Liability Information Return transfers from Excel to XBRL and is integrated into the Bank of England’s insurance taxonomy, fulfilling a commitment in CP19/23 to keep Excel-based MALIR reporting for at least two years. Cashflow reporting in certain MALIR templates drops from monthly to annual, MALIR 4 is merged into IR.22.03, and the MA.02.01 instructions now confirm that liability outflows and asset inflows are both presented as positive values. The PRA declined an early-adoption route or a size-based extension, giving firms roughly a year to the first XBRL MALIR submission in 2027.

Third-country branches: one year of FSCS projections, not three

CP22/25 proposed that third-country branch undertakings report projected FSCS liabilities across three business plan years. After consultation, the PRA reduced the requirement to one plan year (six data points) and finalised the reporting in IR.05.04.01 while deleting the branch-specific template variant IR.05.04.07. The scope is broader than it first looks: the data supports the PRA’s assessment of outward reinsurance arrangements for branches generally, including those well below the current subsidiarisation expectation of 600 million pounds of FSCS-protected liabilities. Two related simplifications also land: removal of the ‘Total assets available to UK policyholders’ row from the branch legal entity template IR.01.04.07, and removal of the Volatility Adjustment row from IR.01.02.07, a consequence of CP20/25. The wider branch picture sits in our guide to third-country branch reporting.

Non-life templates and the deletion of SS37/15

Several CP22/25 edits changed between draft and final. The PRA dropped the proposed new template variant IR.05.04.04 and instead requires total income and expenditure in the existing IR.05.04.02, so it no longer needs to amend supervisory statements SS11/16 and SS40/15. For the non-life annuity provision progression in IR.16.01, the starting reference date moved from 31 December 2024 to 31 December 2026, so firms report this historical information from the implementation date and are not asked to reconstruct provisions on a Solvency UK basis for earlier periods. The PRA also confirmed the deletion of SS37/15 on internal model reporting codes and components, relocating that content into the instructions for template IR.25.05.

One cost point reads the wrong way at a glance. A respondent noted the CP estimated one-off implementation costs of 6.5 million to 12.2 million pounds and asked why the CBA Panel had not been consulted. The PRA clarified that the Panel threshold in SoP14/24 is an annualised net cost above 10 million pounds, and the one-off range corresponds to 0.8 million to 1.4 million pounds annualised, below the trigger. Groups mapping this against conglomerate obligations may find our guide to financial conglomerate reporting and group supervision a useful companion.

Frequently Asked Questions

When do the PS18/26 changes take effect?

They apply to reporting reference dates on or after 31 December 2026, and the own funds and group supervision rule changes take effect from that same date. There are no interim reporting measures. The PRA published the public working draft of the taxonomy in April 2026 and intends to publish the final taxonomy shortly after the policy statement.

Do firms still need permission to classify equity-accounted subordinated liabilities into own funds tiers?

No. The section 138BA classification permission is removed for those instruments once they sit on the recognised lists in rules 3A, 3D and 3F of the Own Funds Part. Issuances still go through the pre-issuance notification process under Own Funds 5 and Group Supervision 6, and the Own Funds 3.4 permission still applies to items not on those lists.

Is NACE 2.1 mandatory for the 31 December 2026 reference date?

Not at that date. NACE 2.1 is available on an opt-in basis from the 31 December 2026 reference date and becomes mandatory from 1 January 2027. It affects templates IR.06.02, IR.11.01 and IR.05.07.

What changes for MALIR?

The return moves from Excel to XBRL inside the Bank of England insurance taxonomy, cashflow reporting in certain templates moves from monthly to annual, MALIR 4 is merged into IR.22.03, and the MA.02.01 instructions confirm that liability outflows and asset inflows are both reported as positive values. First XBRL submissions are expected in 2027.

How much FSCS data must third-country branches project now?

One business plan year instead of three, reducing the requirement from eighteen data points to six, reported within template IR.05.04.01 to support supervision of branch reinsurance arrangements. The current subsidiarisation expectation sits at 600 million pounds of FSCS-protected liabilities under SoP7/24.

Key Takeaways

  • PS18/26 (29 July 2026) finalises CP22/25 and Proposal 1 of CP4/26; the reporting changes apply to reference dates on or after 31 December 2026 through a single taxonomy update, while the Own Funds and Group Supervision rule changes take effect on 31 December 2026, with no interim reporting position.
  • The section 138BA permission for classifying equity-accounted subordinated liabilities into own funds tiers is removed, but the pre-issuance notification process and the Own Funds 3.4 permission for other items remain.
  • IR.23.01 to IR.23.04 adopt the label ‘equity- and liability-accounted subordinated instruments’; IR.02.01 keeps its terminology, and firms deduct equity-accounted subordinated liabilities from the excess of assets over liabilities in the reconciliation reserve.
  • NACE 2.1 is opt-in from the 31 December 2026 reference date and mandatory from 1 January 2027 for IR.06.02, IR.11.01 and IR.05.07.
  • MALIR moves from Excel to XBRL with first submissions in 2027; third-country branches report one plan year of projected FSCS liabilities (six data points) in IR.05.04.01, down from three years in IR.05.04.07 (now deleted).

Sources and References

  • PRA, PS18/26 – Solvency UK: Post-implementation reporting and disclosure amendments and Own Funds permissions update (29 July 2026): bankofengland.co.uk
  • PRA, CP4/26 – UK Solvency II Own Funds: Updates and fixes to rules and expectations: bankofengland.co.uk
  • PRA, SoP10/24 – Solvency II: The PRA’s approach to insurance own funds permissions: bankofengland.co.uk
  • Bank of England, Regulatory reporting – insurance sector: bankofengland.co.uk
  • Bank of England, Solvency II key initiatives (PS15/24 restatement): bankofengland.co.uk
  • PRA Rulebook Online, Own Funds, Group Supervision and Reporting Parts: prarulebook.co.uk

Preparing for the year-end 2026 reference date

The reporting changes require a build and test cycle against the final taxonomy. The PRA published the v2.2.0 public working draft in April 2026 and stated in PS18/26 that it intended to publish the updated taxonomy shortly after the policy statement. The safe reading is to treat 31 December 2026 as a hard reporting reference date, decide early whether to opt into NACE 2.1 then or wait for the 1 January 2027 mandate, and schedule MALIR XBRL user acceptance testing toward the 2027 submission window. The own funds edits look small, but the reconciliation reserve deduction and the IR.23 versus IR.02.01 split are what fails a validation check later if it is not mapped now.

Disclaimer: The information on RegReportingDesk.com is for educational and informational purposes only. It does not constitute legal, regulatory, tax, or compliance advice. Always consult your compliance officer, legal counsel, or the relevant supervisory authority for guidance specific to your institution.

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