In December 2024, the Prudential Regulation Authority (PRA) released its final rules on solvent exit planning under PS20/24 and SS11/24. These rules, which come into force on 30 June 2026, require UK insurers to prepare for the unlikely, but important, scenario of a solvent wind-down in order to protect policyholders and minimise disruption to the wider market.
Insurance organisations now have less than 12 months to prepare and fully embed these requirements. However, while a solvent exit may seem a remote possibility, the implementation deadline is fast approaching, so now is the time to act.
Who’s Affected?
The new rules apply to all PRA-regulated insurers, with a few exceptions:
- Firms in passive run-off
- UK branches of overseas insurers
- Lloyd’s managing agents (but not the Society of Lloyd’s itself)
For insurance firms currently active in the market, these rules must now be incorporated into their regular business planning and risk management activities.
Why It Matters
Solvent exit planning is about more than regulatory compliance. It highlights an organisation’s understanding of its own vulnerabilities, enhances board oversight and supports better long-term decision-making. In addition, it enhances market resilience and policyholder protection by outlining precisely how a company can wind down its insurance business while remaining solvent.
The PRA expects companies to integrate these plans into existing frameworks, such as ORSA and recovery planning. The aim is to ensure that insurers can exit the market without triggering resolution or insolvency, even in stressed conditions, and encourage a healthy, competitive insurance market in which firms can leave without causing costly disruption.
Firms have around 18 months to prepare for the deadline which involves significant and detailed work, so starting early is vital. The work requires scenario testing, cross-functional collaboration, governance review, and clear documentation to demonstrate that they have thought through how an orderly exit can be achieved and that credible plans exist should that situation arise.
What’s Required?
By mid-2026, PRA-regulated insurers must have a clear, proportionate Solvent Exit Analysis (SEA) in place. This document should outline how the company could exit the market while remaining solvent, without triggering a resolution process or insolvency.
The SEA must take into consideration a wide range of exit strategies, including run-off, Part VII transfer, sale or restructuring, and identify any triggers that might prompt such a plan. It should also acknowledge any potential barriers, including legal, operational or financial challenges, and detail how the company would manage those risks. Governance, assurance and resource planning are key components, together with clear internal accountability.
If a solvent exit does ever become a reality, the company must then go one step further by producing a detailed Solvent Exit Execution Plan (SEEP). This expands on the SEA and provides a step-by-step roadmap to carry out the exit. It must include regulatory engagement, communications and the surrender of permissions. The SEEP must be approved at board level and delivered within a timeline agreed by the PRA.
What You Need To Do Now
The PRA expects insurance companies to have begun preparation during 2025 and to have credible SEAs in place before the June 2026 deadline. This means reviewing existing documentation, assigning internal ownership, identifying exit indicators and assessing dependencies or barriers to exit. Internal or external assurance will also be necessary to demonstrate that the plan withstands scrutiny.
For many organisations, this won’t just be a matter of drafting a new document. It’s a wider exercise in strategic and operational alignment and requires cross-functional input, senior management engagement and regular refresh cycles in order to remain relevant over time.
How We Can Help
At Brighter Consultancy, we can support insurers across every stage of the process:
- Drafting bespoke SEA and SEEP templates and indicator frameworks for your individual business model
- Identifying material triggers, barriers and dependencies
- Testing mitigation strategies
- Providing assurance support, whether that’s internal reviews or third-party audits of planning documents
- Aligning SEA/SEEP content with existing ORSA, recovery planning and capital frameworks.
The June 2026 deadline for this regulatory milestone will be upon you before you know it, so the time to act is now.
Whether you’re just starting your exit plan or refining an existing one, we can help you to meet regulatory expectations and strengthen your company’s long-term resilience, even if circumstances change.
Let’s talk about how we can help you build a solvent exit plan that protects your business and your policyholders. Contact us today.
