Overview
Becoming an authorised insurer in the UK is a significant milestone, enabling firms to offer insurance products while ensuring financial stability and policyholder protection. The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) jointly oversee insurers to ensure they operate within a robust and structured regulatory framework.
Once authorised, insurers must meet ongoing prudential and conduct requirements, including maintaining strong risk management, good customer outcomes, and regulatory compliance. This page outlines key expectations for authorised insurers.
The journey to becoming an established insurer
As a new insurer we expect them to continue developing their business models, risk management, and governance frameworks to ensure sustainable success.
- Path to profitability – develop clear strategies for achieving sustainable profitability while meeting capital and liquidity requirements.
- Governance strengthening – ensure ongoing Board engagement in risk oversight and strategic decision-making.
- Risk management maturity – implement progressive enhancements to internal controls, stress testing, and risk monitoring.
The PRA and FCA will continue monitoring business model viability and sustainability, ensuring insurers maintain a sustainable capital position and adhere to regulatory requirements.
Threshold Conditions, Fundamental Rules and Principles
All authorised insurers must comply with core regulatory expectations, including:
- Threshold conditions – minimum requirements for authorisation.
- PRA Fundamental Rules – high-level principles ensuring financial soundness and prudent risk-taking.
- FCA Principles for businesses – expectations for firms to act with integrity, treat customers fairly, and maintain market confidence.
Authorised insurers must adhere with PRA and FCA regulatory frameworks, ensuring prudent business conduct and policyholder protection. Insurers must comply with:
- Solvency II framework – maintain capital adequacy and sound risk management.
- Senior Managers & Certification Regime (SM&CR) – demonstrate clear accountability and oversight across senior roles.
- Operational resilience – implement measures to withstand and recover from operational disruptions, including cyber threats and third-party dependencies.
PRA approach to supervising new insurers
In its supervision of insurers, the PRA employs a judgement-based, forward looking, risk-based, and proportionate approach. We carry out a range of supervisory assurance activities, which vary by the size, complexity, and risk profile of firms. Our approach has been designed to ensure the financial soundness and effective risk management of firms, with a focus on:
- Capital and solvency requirements – maintain adequate capital under the Solvency II framework to meet obligations and absorb financial shocks.
- Risk management and governance – implement robust risk management frameworks, clear governance structures, and Board oversight.
- Stress testing – conduct regular stress tests and scenario analysis to assess financial resilience in adverse conditions.
- Operational resilience – identifying firms’ important business services, setting impact tolerances, and ensuring they can continue to deliver those services during disruptions.
As a newly authorised insurer, they can expect to have:
- Access to the supervisory team
- Periodic calls with the supervision team at the PRA and FCA as appropriate
- Monthly regulatory update emails (requires free subscription) and
- Invitations to events, alongside other firms, on key topics.
Reporting and ongoing compliance
Insurers must submit regulatory reports to demonstrate financial resilience and compliance, including:
- Financial statements – periodic submission of audited financial accounts and solvency reports.
- Risk exposures – regular reporting on risk concentrations, liquidity, and stress test outcomes.
- Governance and controls – evidence of internal audit reviews, compliance policies, and Board risk oversight.
Firms must demonstrate robust capital planning to ensure financial stability, maintaining adequate buffers to withstand adverse market conditions. The PRA actively monitors insurers’ capital positions post-authorisation through:
- Regular solvency and liquidity reporting.
- Engagement with Boards on capital buffers and stress testing
- Reviewing risk exposures and funding strategies.
FCA supervisory approach for authorised insurers
Once authorised, insurers are subject to ongoing FCA supervision to ensure they comply with conduct requirements and deliver good outcomes for policyholders. New insurers can expect early-stage supervisory reviews and regular engagement with FCA supervisors. The level of supervision depends on firm size, complexity, and risk profile. The FCA will monitor firms using data analytics and market intelligence to identify emerging risks.
The FCA’s supervisory approach is risk-based, focusing on key priorities such as:
- Fair treatment of policyholders – Transparent pricing, fair claims handling, and clear product disclosures.
- Governance and senior management responsibility – Ensuring strong Board oversight and compliance with SM&CR.
- Financial promotions and product oversight – All marketing and financial promotions must be clear, fair, and not misleading.
- Preventing financial crime and market misconduct – Compliance with AML, fraud prevention, and market integrity regulations.
- Consumer duty and vulnerable customers – Prioritising good customer outcomes and identifying risks to vulnerable consumers.
- Regulatory reporting and data-driven supervision – Firms must submit ongoing data reports covering conduct, risk exposure, and complaints
Regulatory data management
Authorised insurers will be required to submit reports based on the regulated activities undertaken by the nature of their firm. This will include providing relevant information needed to monitor their financial position and performance. The FCA will require conduct focused information.
The following are key regulatory systems required.
- BEEDS platform to submit regulatory returns, with help and information for firms. Upon authorisation, a firm’s CEOs will be asked to nominate a principal user who will be responsible for their firm's submissions via BEEDS. For registration issues or access queries, contact beedsqueries@bankofengland.co.uk.
- RegData is the FCA’s online data collection platform for gathering regulatory data from firms, where firms can register. Reporting requirements are set in SUP 16 of the FCA Handbook but more information is provided in the Welcome Pack sent to a newly authorised firm. You will be able to view the firm's reporting schedule which details the returns submissions over the next 12 months, and when they are required.
- The Connect System is used to submit applications for some regulatory transactions, where firms can register and find more information.
Regulatory fees and ongoing costs
Once authorised, insurers must pay annual regulatory fees to the PRA and FCA. Additional fees may apply for specific permissions, regulatory filings, or enhanced supervisory engagement. More information about the fees can be found here.
Future supervision and evolution of regulatory approach
The PRA and FCA adopt a risk-based supervisory approach, meaning that as the firm becomes established, changes to the supervisory method may be made to address the relative scale and complexity of the firm.
Insurers should contact PRA and FCA Supervision for material events, with regard to Principle 11 / Fundamental Rule 7. Below are examples but not limited to of when you should make contact:
- Changes to business model and/or strategy;
- Failings of IT infrastructure which impact the customer;
- Financial crime and money laundering issues;
- notification of consumer redress and remediation exercises; governance and senior management changes; capital strategy; and
- data breaches
Insurers should keep updated on the changes in the Regulatory landscape. To do this, insurers can subscribe to PRA & FCA updates, attend regulatory briefings, and stay informed. Insurers can stay updated on European and international developments for the insurance sector by referring to the websites for the European Insurance & Occupational Pensions Authority and the International Association of Insurance Supervisors. Attend seminars which are held periodically for senior management, NEDs and advisors. It is an opportunity for firms to hear directly from staff at the regulators about key issues that are of interest to insurers.
Next steps for prospective insurers
If you are considering applying for authorisation, the New Insurer Start-Up Unit (NISU) provides tailored support to help you navigate the process.
For more details, please visit Bank of England – New Insurer Start-Up Unit.
And please read the Index of policy areas relating to insurance firms for useful guidance.
Feedback and continuous improvement
We welcome feedback from new insurers to improve our authorisation process. Please email us at NewInsurerStartupUnit@bankofengland.co.uk with your input.