Solvent Exit Planning for Insurers
The Prudential Regulation Authority’s (PRA) expectations on Solvent Exit Analysis (SEA) come into force from 30 June 2026. This is a new regulatory requirement, and the PRA may request SEAs from the insurers they supervise from this date.
Under PRA requirements, firms are required to undertake adequate assurance activities for its solvent exit preparations. These assurance activities can be performed internally or externally. The PRA gives examples of assurance activities to include reviews by internal audit functions or external specialists; and obtaining challenge from the Board (including non-executives) on the SEA.
Preparation support
Given year end pressures, we know that many firms are still working hard to get their SEA finalised and ready for scrutiny by assurance functions or providers.
Our team of insurance experts has supported numerous regulated businesses with wind-down planning exercises. We can provide support to your in-house functions in getting your SEA ready in advance of 30 June 2026, including:
- Mapping SEA requirements to existing risk and capital management documentation
- Support in the drafting and review of your SEA
- Benchmarking the content of your SEA, including the completeness of indicators / triggers and adequacy of resources and costs, ensuring your plans are robust yet proportionate.
Our assurance offerings:
- Independent assurance review
We can perform an independent assurance review on behalf of the Board to assess the adequacy of the SEA in accordance with PRA requirements. The review will provide assurance around key elements of the SEA including
- Consideration of solvent exit options and indicators
- Assessment of potential exit barriers and risks
- Financial and non-financial resources
- Stakeholder communication plans
- Governance arrangements, decision-making processes and approvals.
We will assess the approach taken to prepare the SEA, consider whether there is appropriate rationale for key assumptions / decisions and review and challenge of these and ensure the SEA aligns to PRA requirements. We will leverage our industry knowledge and experience from reviewing wind down and solvent exit plans for other firms, including good practices observed.
On completion, produce a report for the Board setting out our observations and any areas for improvement.
- Support to in-house internal audit teams
We can offer:
- Co-source support – review SEAs on behalf of the inhouse internal audit function. We can either run these co-source audits fully independently or with some involvement or support from the inhouse team eg for knowledge sharing.
- Subject matter expertise (SME) provision – provide access to PKF SMEs to assist inhouse internal audit teams with their planning, fieldwork and reporting for SEA audits. We will be flexible depending on the amount of SME support needed.
- Briefing or training session – provide a short briefing or training session to inhouse internal audit teams to provide a foundation and share our knowledge and insights on SEAs and potential internal audit focus areas and approaches.
