The Prudential Regulation Authority (PRA) has published its 2026/27 Business Plan, setting out a work programme to advance its primary objectives of safety and soundness and, for insurers, policyholder protection, alongside a more proportionate and efficient approach intended to support competition, competitiveness and growth. Priorities include delivering major prudential reforms, strengthening liquidity and operational resilience expectations, and addressing emerging risks including life insurers’ use of Funded Reinsurance. For banks, planned activity includes supervisory support for Basel 3.1 implementation, which the PRA says will better align capital with underlying risks without increasing overall requirements for the sector, and an off-cycle review of firm-specific Pillar 2 requirements ahead of the 1 January 2027 implementation date. Reforms for Small Domestic Deposit Takers (SDDTs) under the Strong and Simple framework will continue, with the simplified capital regime fully in place from 1 January 2027, while the Future Banking Data Programme will pursue further reporting simplifications. For insurers, the plan flags embedding new liquidity reporting, developing policy measures on Funded Reinsurance capital treatment, and considering responses on broadening access to alternative third-party capital, alongside ongoing Solvency UK implementation. Internally, the PRA plans to reduce headcount by around 140 staff, move Periodic Summary Meetings to a two-year cycle for all firms, and invest in systems and data capabilities, with a provisional 2026/27 budget of GBP 347 million, down GBP 3 million (1%) year on year, and budgeted headcount of 1,385 full-time equivalents. Next steps include consultation in 2026 H2 on a systematic approach to updating regulatory thresholds, consultation later in 2026 on a UK captive insurer regime being developed with the Financial Conduct Authority (FCA), and consultation during 2026/27 on the next phase of Funded Reinsurance policy. The PRA and FCA’s standardised operational incidents and outsourcing and third‑party reporting regime is due to enter into force in March 2027, and the PRA expects a change in leadership with Sam Woods’ term ending in June and Katharine Braddick taking over in July.
Prudential Regulation Authority 2026-04-17
UK Prudential Regulation Authority publishes 2026/27 business plan with Basel 3.1 rollout and 140-staff efficiency programme
The Prudential Regulation Authority’s 2026/27 Business Plan prioritises major prudential reforms, stronger liquidity and operational resilience expectations, and emerging risks such as life insurers’ funded reinsurance, while seeking a more proportionate, efficient regime. Key workstreams include Basel 3.1 implementation and Pillar 2 reviews for banks, Strong and Simple reforms and reporting simplification, and for insurers embedding new liquidity reporting, funded reinsurance capital policy and broader access to alternative third‑party capital with Solvency UK. The plan also provides for a reduced budget and headcount, systems and data investment, consultations on regulatory thresholds, a UK captive insurer regime and funded reinsurance, and confirms leadership transition from Sam Woods to Katharine Braddick in July 2026.