United Kingdom’s Prudential Regulation Authority consults on ending Lloyd’s internal model output reporting and updating liquidity rules

The Prudential Regulation Authority has launched a low-impact amendments consultation proposing to remove Lloyd’s syndicates from internal model output reporting and revise liquidity rules to accommodate the Overseas Prudential Requirements Regime, Basel 3.1 and the restatement of Capital Requirements Regulation provisions. Comments on both sets of proposals are due by Sept. 11, 2026. The Lloyd’s changes would take effect on Dec. 31, 2026, meaning syndicates would not submit internal model outputs with their 2026 year-end results. The PRA considers the information unnecessary for its supervisory approach and duplicative of other Solvency UK reporting and data shared by Lloyd’s. Consequential amendments would clarify that use of internal model outputs in Own Solvency and Risk Assessment reports applies only to firms expected to report them, while related supervisory materials would be aligned with the current Solvency UK framework. The liquidity amendments would take effect on Jan. 1, 2027. They would make firms responsible for assessing whether third-country arrangements for non-UK covered bonds are equivalent to UK standards for recognition as level 2A liquid assets, clarify how overseas jurisdiction designations interact with liquidity treatment, and update rules for Basel 3.1 and restated Capital Requirements Regulation provisions. Elements relating to overseas requirements depend on the relevant regulations entering into force on Jan. 1, 2027.