CP4/26 – UK Solvency II Own Funds: Updates and fixes to rules and expectations

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Responses are requested by 24 April 2026.

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Responses can be sent by email to: CP4_26@bankofengland.co.uk

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Capital Resources and Insurance Groups Team, Prudential Policy
Prudential Regulation Authority
20 Moorgate
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1: Overview

1.1 As part of PS15/24 – Review of Solvency II: Restatement of assimilated law, the Prudential Regulation Authority (PRA) restated Solvency II own funds requirements from assimilated EU law within the PRA Rulebook and policy materials. As explained at the time, the PRA generally chose not to propose significant changes during the restatement to ensure certainty for UK insurers. Now that the UK Solvency II own funds requirements are contained within the PRA Rulebook, the PRA is proposing targeted amendments to its rules and policy materials relating to own funds to address known issues and inconsistencies, as well as those highlighted by firms in response to other consultations. In addition, the PRA has reviewed relevant EU guidelines and proposes to restate them in PRA supervisory statements to provide greater clarity and ease of use for firms. The proposals set out in this consultation paper (CP) are intended to support firms’ activities by reducing avoidable burden and improving the clarity of the UK own funds framework.

1.2 The PRA now proposes to remove the requirement for permission to classify equity accounted subordinated instruments into tiers of own funds, which would reduce burden on both firms and the PRA. The PRA also proposes to address known inconsistencies in the original drafting of assimilated law relating to UK Solvency II own funds that were not resolved within PS15/24 and were restated within the PRA Rulebook. The PRA considers it is now appropriate to correct these inconsistencies to increase the accuracy and clarity of the UK own funds framework.

1.3 The PRA has also observed that some firms in the UK are undertaking liability management exercises in which they refinance UK Solvency II capital instruments through tender offers run concurrently with new capital issuances. The PRA considers it appropriate to support a level playing field for all firms by clarifying expectations regarding the compliant sequencing for this type of transaction.

1.4 Finally, within PS15/24 the PRA noted it would review the status of any remaining EIOPA guidelines at a later stage and may consult in future on any further changes. This CP proposes the restatement into PRA supervisory statements of the remaining relevant EIOPA guidelines on classification of own funds and ancillary own funds, with some targeted changes, which should also improve the clarity of the UK own funds framework.

1.5 In summary, the PRA proposes to:

• Remove the permission requirement for equity-accounted subordinated instruments to be classified into own funds tiers, and make consequential updates to reporting templates and instructions;
• Clarify the PRA’s expectations regarding the sequencing of tender offers run concurrently with new issuances when refinancing own funds items;
• Remove known inconsistencies in the original drafting of assimilated law which have been restated into the PRA Rulebook, and make other minor corrections and consequential changes; and
• Restate the remaining relevant EIOPA Guidelines on classification of own funds and ancillary own funds into PRA supervisory statements (SS).

1.6 The proposals in this CP would result in changes to:

• the Own Funds Part of the PRA Rulebook (Appendix 1);
• the Reporting Part of the PRA Rulebook (Appendix 1);
• the Group Supervision Part of the PRA Rulebook (Appendix 1);
• the PRA Rulebook Glossary (Appendix 1);
• the Solvency Capital Requirement – Standard Formula Part of the PRA Rulebook (Appendix 1);
• SS2/15 – Solvency II: own funds (Appendix 2);
• SS3/15 – Solvency II: the quality of capital instruments (Appendix 3);
• SS22/15 – Solvency II: applying EIOPA’s set 1 Guidelines to PRA regulated firms (Appendix 4);
• reporting templates and instructions for IR.02, and reporting instructions for IR.23.01, IR.23.02, IR.23.03 and IR.23.04 as set out in the table of templates and instructions being amended (Appendix 5); and
• SoP1/19 – Interpretation of EU Guidelines and Recommendations: Bank of England and PRA approach after the UK’s withdrawal from the EU (Appendix 6).

1.7 This CP is relevant to UK Solvency II firms, the Society of Lloyd’s, insurance and reinsurance groups, and UK holding companies. This CP will refer to these collectively as ‘insurers’ or ‘firms’ unless otherwise specified.

1.8 The PRA considers that the proposals in this CP would continue to advance the PRA’s primary objectives of promoting the safety and soundness of PRA-authorised firms and securing an appropriate degree of policyholder protection. The PRA also considers that any effects on the PRA’s secondary objectives relating to competition, international competitiveness and growth would be positive but limited. The proposals largely constitute refinements and simplifications of the existing Own Funds rules, intended to ensure that those rules remain clear, coherent, and aligned with industry practice, which indirectly supports both the PRA’s primary and secondary objectives without introducing new risks or obligations for firms.

Implementation

1.9 The PRA proposes that the implementation date for the removal of the permission requirement for equity-accounted subordinated instruments, and consequential reporting changes, would be aligned with the implementation of the changes proposed in CP22/25 – UK Solvency II reporting and disclosure: Post-implementation amendments.^{footnote [1]} This would allow the consequential reporting changes detailed within this CP to be made for year-end 2026 reporting.

1.10 The PRA proposes that the remaining changes resulting from this CP would become effective immediately from the publication date of a dedicated policy statement (PS) that the PRA intends to publish in 2026 H2.

Responses and next steps

1.11 This consultation closes on 24 April 2026. The PRA invites feedback on the proposals set out in this consultation. Please address any comments or enquiries to CP4_26@bankofengland.co.uk.

1.12 When providing your response, please tell us whether or not you consent to the PRA publishing your name, and/or the name of your organisation, as a respondent to this CP.

1.13 Please also indicate in your response if you believe any of the proposals in this CP are likely to impact persons who share protected characteristics under the Equality Act 2010, and if so, please explain which groups and what the impact on such groups might be.

2: The PRA’s proposals

Proposal 1 – Removing the permission requirement for classifying equity-accounted own funds items

2.1 Own funds items can be classified into three tiers under UK Solvency II, reflecting quality of capital: Tier 1 (the highest quality capital), Tier 2, and Tier 3. The rules in 3A, 3D and 3F of the Own Funds Part of the PRA Rulebook provide the list of known own funds items for each tier. Firms can classify an own funds item into a given tier if it is included in the relevant list and displays the classification features set out in Own Funds 3B, 3E or 3G. However, Own Funds 3.4 also allows firms to classify items not included in these lists into a given tier if the firm has received a classification of own funds permission under s138BA of the Financial Services and Markets Act 2000 (FSMA) in respect of that item. This permission is intended to allow for the classification of items that are not listed as known items for a given tier, but which nonetheless display the features of that tier.

2.2 It is possible for firms to structure subordinated debt instruments such that they are classified for accounting purposes on the Solvency II balance sheet as either financial liabilities or as equity, depending on the specific terms and conditions of the given instrument. Historically, the PRA has interpreted the lists of known capital items^{footnote [2]} as including such subordinated instruments where they are classified as liabilities for accounting purposes,^{footnote [3]} but not including those classified as equity for accounting purposes.

2.3 As a result, where firms, for capital tiering purposes, wish to classify equity-accounted subordinated instruments into the relevant tier, they are required to seek the PRA’s permission to do so under Own Funds 3.4.^{footnote [4]}

2.4 The PRA does not consider that accounting treatment, in isolation, provides a prudentially relevant basis for requiring a classification of own funds permission in this case. Subordinated instruments can meet the required features for the relevant tier irrespective of whether they are accounted for as equity or as liabilities. Consequently, a permission requirement that arises solely from the accounting classification of what would otherwise be a 'known' item on the list, fails to achieve its intended prudential purpose and imposes avoidable burden on firms and the PRA.

2.5 Therefore, the PRA proposes to amend the lists of own funds items for each tier to include subordinated instruments that are treated as equity for accounting purposes, meaning firms would no longer be required to seek a s138BA permission to classify these instruments into tiers. However, the permission set out in Own Funds 3.4 will remain in place for any other items not included in these lists that firms may wish to classify into a tier of own funds. The proposed rule amendment is set out in Annex A of the draft rule instrument, Appendix 1. A consequential amendment to the Group Supervision Part is set out in Annex C.

2.6 Following this policy change, issuances of equity-accounted subordinated instruments would be subject to the standard pre-issuance notifications process, as required by Own Funds 5 and Group Supervision 6 (PIN Rules).

Consequential reporting changes

2.7 The PRA proposes that both equity- and liability-accounted subordinated instruments are reported together in the existing row R0140 of reporting template IR.23.01. This row currently contains only liability-accounted subordinated instruments, while current reporting of equity-accounted subordinated instruments is inconsistent across firms. The PRA considers that there is no prudential reason for equity- and liability-accounted subordinated instruments to be reported in separate rows.

2.8 To ensure clarity, the PRA proposes to amend relevant references to ‘subordinated liabilities’ within the Solvency II balance sheet template IR.02 to ‘subordinated debt liabilities’ and to update relevant reporting instructions.^{footnote [5]} This is intended to avoid confusion between the sum of equity- and liability-accounted subordinated liabilities reported in the own funds reporting templates, and the liability-accounted subordinated liabilities currently reported in template IR.02. Additionally, given the change in use of R0140 in IR.23.01, the PRA proposes to remove two validation checks. The first is between this data point and R0870/C0010 ‘subordinated debt liabilities in Basic Own Funds’ in IR.02.01. The second is the ‘Other basic own fund items’ deduction that is made when calculating the reconciliation reserve in R0730/C0060 of IR.23.01.

2.9 A complete list of templates and instructions being changed in this CP can be found in Appendix 5. The draft template and instructions reflecting the amendments are also included in this publication.

2.10 As outlined in paragraph 1.9, the PRA proposes to implement these reporting changes alongside the changes proposed in CP22/25 – UK Solvency II reporting and disclosure: Post-implementation amendments and intends to publish these changes within the public working draft (PWD) taxonomy described in paragraph 1.15 of CP22/25. During the interim period between the implementation of Proposal 1 and the update to the reporting taxonomy, the PRA proposes that firms report equity-accounted subordinated instruments in row R0180 of IR.23.01 under ‘other own fund items approved by the supervisory authority as basic own funds not specified above.’ This applies where the rule change takes immediate effect on publication of the policy statement, ahead of any taxonomy change.

Proposal 2 – clarifying expectations on the use of concurrent tender offers and new issuances to refinance UK Solvency II capital instruments

2.11 The PRA has observed that some firms are undertaking liability management exercises in which they refinance UK Solvency II capital instruments through tender offers run concurrently with new issuances.

2.12 Ensuring these concurrent transactions satisfy the existing regulatory requirements for notification, redemption, and derecognition of the instruments, in the correct order, can be complex and unnecessarily burdensome for both firms and the PRA. Compliant approaches have typically been considered and agreed with firms on a case-by-case basis.

2.13 To provide clarity and support consistent understanding across all firms, the PRA proposes to add new text to Chapter 3 of SS3/15 – Solvency II: the quality of capital instruments (Appendix 3) to clarify how existing requirements apply to refinancing via concurrent tender offers and new issuances. This would cover requirements relating to notification of the new issuance under the PIN Rules, prior permission for the redemption or repayment of the existing instrument, and the timing and conditions for derecognition of that instrument. The PRA proposes to outline the key regulatory requirements and sequencing that any compliant approach must address but does not limit firms to a particular approach.

2.14 This proposed clarification would not introduce any new regulatory requirements or expectations for firms; rather, it is intended to clearly set out in a single accessible location, requirements that firms should already be applying in practice. The PRA expects this to support greater consistency, promote a level playing field, and reduce burden for both firms and the PRA by minimising the need for case-by-case engagement.

Proposal 3 – Minor corrections to Own Funds Rules

2.15 As noted in paragraph 1.1, through PS15/24, the PRA restated Solvency II assimilated law into the PRA Rulebook, including provisions restated into the Own Funds Part. Given the limited scope of this restatement exercise, and its focus on delivering the package in a timely manner, the PRA did not address some known inconsistencies and inaccuracies within the Own Funds rules. A number of these inaccuracies were highlighted in responses to CP5/24 – Review of Solvency II: Restatement of assimilated law, and the PRA is now proposing to make the corrections set out below. In addition to addressing these historical inaccuracies, the PRA is also proposing a small number of further amendments to Own Funds rules to improve clarity. Where appropriate, the PRA proposes to make consequential amendments to other Parts of the PRA Rulebook.

2.16 These rule amendments are included in Annex C to H of the draft rule instrument, Appendix 1. The changes proposed are:

• Deleting Own Funds 4 which provides duplicative eligibility limits for the tiers of own funds due to the separate restatement of both the European Union’s Solvency II Directive and Commission Delegated Regulation (EU) 2015/35 (CDR) into the PRA Rulebook. Consequential amendments would be made to remove references to this rule from the PRA Glossary, the Group Supervision Part and the Reporting Part, and from SS2/15.
• Amending the requirements for prior permission to repay or redeem Tier 1 and Tier 3 own funds instruments, to clarify they apply to own funds items classified to those tiers, including items classified under a classification of own funds permission.
• Clarifying that Tier 2 basic own funds items are eligible to cover 20% of the MCR, while Tier 2 Ancillary Own Funds are not eligible to cover the MCR.
• Clarifying that the requirements relating to minimum maturity date and first contractual opportunity to redeem must both be satisfied for basic own funds items to be classified into Tier 1 and Tier 2 basic own funds.
• Correcting an inconsistency in the requirements for calculation of the reconciliation reserve that would cancel out the increase in eligible own funds following receipt of a classification of own funds permission for an item recognised as a liability on the Solvency II balance sheet.
• Changing references to ‘restricted own funds items’ to 'restricted own funds' to recognise that restricted own funds are most likely to be a part of the excess of assets over liabilities, rather than identifiable basic own funds items. Consequential amendments would be made to references to restricted own funds within the Own Funds Part and the Solvency Capital Requirements – Standard Formula Part;
• Removing unnecessary text and clarifying the interaction of Own Funds 3C and Own Funds 3L when determining the amount of restricted own funds to deduct from the excess of assets over liabilities when calculating the reconciliation reserve. A minor consequential amendment would be made to Chapter 1 of SS2/15 and the Solvency Capital Requirements – Standard Formula Part.
• Clarificatory amendments to the definitions of ’ancillary own funds’, ’basic own funds’ and ’own funds’ as they relate to insurance holding companies.
• Clarifying that ancillary own funds displaying the features determining classification for Tier 2 are to be classified as Tier 2 ancillary own funds rather than Tier 2 own funds.
• Other very minor corrections to improve the grammar, and readability of Own Funds rules, and to update references to other parts of the Rulebook.

2.17 These changes are not intended to deliver substantive policy changes. They are instead intended to tidy the Own Funds rules where there are areas of inconsistency, lack of clarity, or error. The PRA considers that these amendments should align with firms’ existing understanding of the rules.

Proposal 4 – Restating the remaining relevant EIOPA Guidelines for classification of own funds and ancillary own funds

2.18 Through PS15/24 – Review of Solvency II: Restatement of assimilated law, the PRA restated some EIOPA Guidelines on classification of own funds and ancillary own funds where they were essential for the implementation of own funds permissions under s138BA FSMA. These restated Guidelines are set out in PS15/24, Appendix 8 (Mapping tables for Solvency II Review). The majority of the own funds guidelines have not yet been restated, however, the PRA considers that they remain relevant as set out in SoP1/19 – Interpretation of EU Guidelines and Recommendations: Bank of England and PRA approach after the UK’s withdrawal from the EU.^{footnote [6]} Some responses to CP5/24 noted the ambiguous status of the remaining guidelines, and in PS15/24 the PRA committed to reviewing them at a later stage.

2.19 In general, when reviewing and restating remaining EIOPA Guidelines into PRA policy materials, the PRA intends to identify opportunities to disapply guidelines that are not relevant to UK insurers and, where appropriate, to streamline or delete elements of guidelines it considers unnecessary. This approach has been applied in previous consultations – for example in CP20/25 – Insurance third-country branches: policy implementation and other updates, the PRA disapplied 3 out of 9 remaining guidelines.

2.20 Applying this approach to the own funds related guidelines, the PRA proposes to disapply Classification of Own Funds Guideline 20 (‘Eligibility and limits applicable to Tiers 1, 2 and 3’), as it does not add material information beyond the PRA Rulebook.

2.21 Given the complexity and specific nature of own funds matters, the PRA considers it necessary to restate the remaining guidelines on the classification of own funds and ancillary own funds in its supervisory statements, as they continue to provide relevant clarity for firms. The PRA considers this approach to be appropriate given the characteristics of the own funds framework. In restating these guidelines, the PRA has nevertheless sought opportunities to streamline and delete elements it considers unnecessary, and does not generally propose to make substantive changes.

2.22 In general, the proposed changes are limited to updating language to improve alignment with UK Solvency II and to reflect PRA drafting style. However, for a small number of guidelines, more substantive drafting changes are necessary to clarify supervisory expectations or to align the guidelines with updated prudential requirements or developments in standard market practice. The areas in which more substantive changes are proposed include:

• the inclusion of some of the EIOPA explanatory or introductory text where this improves clarity regarding the intention of the guidelines without introducing additional expectations;
• clarifying that Classification of Own Funds Guideline 4 (‘Tier 1 features determining classification of items referred to in Article 69(a)(i) and (ii) of Commission Delegated Regulation 2015/35’) is equally relevant to the features determining classification for restricted Tier 1 instruments;
• updating guidelines regarding redemption of capital instruments to align with UK Solvency II requirements that allow early calls in the event of unforeseen changes in regulatory or tax treatment; and
• updating guidelines regarding when firms should treat own funds items as repaid or redeemed to reflect the increased use of tender offers to redeem UK Solvency II capital instruments.

2.23 The PRA proposes to restate the remaining relevant ancillary own funds guidelines into SS2/15 – Solvency II: own funds (Appendix 2), which sets out the PRA’s current expectations regarding ancillary own funds. The PRA also proposes to restate the remaining relevant guidelines on the classification of own funds into SS3/15 – Solvency II: the quality of capital instruments (Appendix 3), where related expectations on the features determining classification are set out. The mapping table in Appendix 7 sets out the location for the restatement of each relevant guideline.

2.24 The PRA notes that the original drafting of the EIOPA guidelines was intended to provide guidance to supervisory authorities under Solvency II on the application of the requirements set out in that regime. The PRA subsequently published SS22/15 – Solvency II: applying EIOPA’s Set 1 Guidelines to PRA-authorised firms to explain how it considered those guidelines to be applicable to firms. This proposed restatement of guidelines into SS2/15 and SS3/15 therefore continues the approach set out in SS22/15, by clarifying how the guidelines are relevant for firms.

2.25 As a result of this proposed restatement, the PRA also proposes to remove references to the classification of own funds and ancillary own funds guidelines from SS22/15 (Appendix 4). The PRA considers that the majority of expectations in SS22/15 relating to these materials are no longer required, however the PRA proposes to transfer a limited amount of material from SS22/15 to SS2/15 and SS3/15 where it provides helpful explanatory context. The PRA also proposes to remove references to the classification of own funds and ancillary own funds guidelines from SoP1/19 (Appendix 6) by striking through relevant material that has been restated.

3: PRA objectives analysis

The PRA’s primary objectives

3.1 The PRA considers that all four proposals in this CP, though modest in impact, would continue to advance its primary objectives by enhancing the clarity and coherence of the UK Solvency II regulatory framework for firms in relation to Own Funds.

3.2 Proposal 4 would also bring a significant proportion of EIOPA guidelines relating to own funds within PRA policy materials. The PRA considers that increasing the extent to which all Own Funds requirements and expectations are contained within the PRA’s Rulebook and associated policy materials, while making minor corrections and updates to reflect standard market practice, would help firms to understand the totality of the framework, in an accessible format.

The PRA’s secondary objectives

3.3 The PRA has assessed whether the proposals in this CP facilitate its secondary objectives of facilitating:

• effective competition in the markets for services provided by PRA-authorised persons in carrying on regulated activities; and
• subject to aligning with the relevant international standards, the international competitiveness of the economy of the UK and its growth in the medium to longer term.

3.4 The PRA considers that removing the permission requirement for equity-accounted subordinated instruments may marginally improve the efficiency of raising capital in the UK, by facilitating a more streamlined and less burdensome process for these types of instruments. As such, this could incrementally advance the PRA’s secondary competitiveness and growth objective. The PRA also considers that this proposal may have a minor positive impact on its secondary competition objective, as removing the permission requirement provides a less formal, leaner process and timeline for firms, which may facilitate competition by levelling the playing field.

3.5 The PRA considers that proposal 2 would have a positive impact on its secondary competition objective by promoting a level playing field, particularly for firms who have not yet completed concurrent tender offers and new issuances, by clarifying how the PRA considers such transactions can be undertaken in a compliant manner. The PRA also considers that this proposal could bring some limited benefits to its secondary competitiveness and growth objective by making the UK a more attractive place to operate, as firms would have greater clarity on their obligations. Further limited benefits may also arise from removing barriers to raising new capital.

3.6 In addition, the PRA considers proposals 3 and 4 could provide some limited benefits to its secondary competitiveness and growth objective by improving the clarity of the Own Funds regulatory framework, making it more attractive to operate in the UK as firms can understand and comply with their obligations more easily. The PRA considers that these proposals would have minimal impact on its secondary competition objective, other than the limited benefits that could be achieved by providing clearer and more comprehensive Own Funds rules and policy materials for all PRA-regulated insurers, to promote fairness and competition.

4: Cost benefit analysis (CBA)

4.1 The PRA’s Cost Benefit Analysis Panel was not consulted on the CBA, as the estimated direct impact on insurers falls below the materiality threshold of +/-£10 million published in the SoP14/24 – The PRA’s Approach to Cost Benefit Analysis.

Benefits

4.2 The key benefit of proposal 1 would be the reduced burden on firms and the PRA where firms must notify the PRA in advance of issuance under the pre-issuance notifications process, rather than seeking a formal permission via the s138BA application process. Given the low frequency of these issuances, the PRA considers this is not a large benefit to the industry as a whole but is a material, albeit small, benefit to firms and the PRA on a case-by-case basis.

4.3 The PRA considers that proposal 2 should bring benefits to firms through increased clarity of PRA expectations when planning and executing these concurrent transactions, allowing firms to streamline their engagement with the PRA. This benefit would also apply to the PRA, with reduced resource burden required in engaging with firms.

4.4 The PRA considers the key benefit of proposals 3 and 4 would be ensuring the Own Funds rules are clear, accurate, and free from errors, though acknowledges that this is likely to be only minimal.

4.5 The PRA considers that the benefits associated with these proposals, while generally modest in scope, could cumulatively contribute to a more effective and clear prudential framework for own funds.

Costs

4.6 The PRA does not expect any of the four proposals to impose any significant costs on firms or the PRA. As these changes largely involve clarifications and minor procedural adjustments, implementation costs are anticipated to be negligible or very small in scale, with no material ongoing costs.

4.7 The PRA considers that proposal 1 would not lead to any notable costs for firms or the PRA. The PRA considers that the minor reporting changes required could cause minimal additional costs to a very small number of firms.

4.8 The PRA considers there would be no specific costs as a result of proposal 2 beyond the need for firms to familiarise themselves with the updated guidance (in particular, the revisions to SS3/15). Similarly, the PRA acknowledges there may be minimal familiarisation costs associated with proposals 3 and 4.

5: Other Legal Requirements

Statutory Duty to Consult

5.1 In accordance with its statutory obligations under sections 138J and 138S of FSMA, the PRA is required to consult when introducing new rules or new standards instruments. When rule-making is not involved, the PRA also has a public law duty to consult widely where it would be fair to do so.

5.2 The Insurance Practitioner’s Panel were consulted about the main proposals in this CP. The Panel expressed its support for the proposals.

‘Have regards’ analysis

5.3 In developing these proposals, the PRA has had regard to the FSMA regulatory principles, and the aspects of the Government’s economic policy as set out in the HMT recommendation letter from November 2024. The following factors, to which the PRA is required to have regard, were of significance in the PRA’s analysis of the proposal:

• The principle that a burden or restriction which is imposed on a person should be proportionate to the benefits which are expected to result from the imposition of that burden: The PRA considers that proposal 1 of this CP would remove a disproportionate burden on firms through the current requirement to seek permission for equity accounted subordinated instruments.
• Efficient and economic use of PRA resources: The PRA considers that proposals 1 and 2 of this CP would improve the efficient and economic use of PRA resources by removing burdens on the PRA which do not advance its objectives. Furthermore, the PRA considers it an efficient use of resources to make the policy changes outlined in the other proposals in this CP.
• Legislative and Regulatory Reform Act principles of good regulation, and transparent exercise of the PRA’s functions: The PRA considers proposal 1 follows these principles of good regulation by removing unnecessary burden on firms, improving the proportionality of our regime and removing a regulatory action that does not need to be taken. The PRA also considers proposal 2 would support the transparent exercise of PRA functions, as they would clarify the current policy position and remove any potential ambiguity resulting from developments in market practice.
• Contribution of the financial services sector to overall economic growth, creating a regulatory environment which facilitates growth through supporting competition and innovation, maintaining and enhancing the UK’s position as a world-leading global finance hub, and ensuring the UK’s capital markets are competitive and support UK growth: The PRA considers that proposals 1 and 2 could remove a potential barrier to growth through reducing barriers to insurance firms raising capital. The PRA also considers that proposals 3 and 4 of this CP may provide some limited benefits as a clearer framework can increase the attractiveness of the UK economy as a place to do business.

5.4 The PRA has had regard to other factors as required. Where analysis has not been provided against a ‘have regard’ for this proposal, it is because the PRA considers that ‘have regard’ to not be a significant factor for this proposal.

Impact on mutuals

5.5 The PRA considers that the impact of the proposed rule changes on mutuals is expected to be no different from the impact on other firms.

Equality and diversity

5.6 In developing its proposals, the PRA has had due regard to the equality objectives under s.149 of the Equality Act 2010. The PRA considers that the proposals do not give rise to equality and diversity implications.