PRA issues COVID-19 guidance for insurers
The Prudential Regulation Authority has finalised enhanced liquidity reporting for large UK insurers, following COVID-19-related market stresses and the March 2020 ‘dash for cash’. The move completes a package first proposed in 2024 to address gaps in firms’ visibility of liquidity risks under severe but plausible scenarios.
In 2024, the PRA used consultation paper CP19/24 to propose new liquidity reporting requirements for major insurance firms, explicitly linking the reforms to weaknesses exposed during the March 2020 COVID-19 ‘dash for cash’ episode and the September 2022 LDI crisis. The consultation targeted closing identified gaps in how insurers report and monitor liquidity under stress, particularly where complex collateral and derivatives structures are involved.
The PRA published policy statement PS15/25 on 30 September 2025, confirming the final liquidity reporting framework for large UK insurers with exposures to derivatives, securities lending, or repurchase agreements. The policy statement sets out the scope of firms in scope for the new regime and the data the regulator expects to receive to monitor liquidity positions and risk drivers across these activities.
PS15/25 originally proposed that firms implement the new requirements by 31 December, but the PRA extended the implementation deadline to 30 September following industry feedback on preparation challenges. The regulator has not provided for a phased rollout or exemptions, meaning all in-scope firms are expected to meet the full reporting package from the revised date.
New templates introduced in PS15/25 include a cash flow mismatch report with T+1 reporting, designed to give the PRA near-term visibility of liquidity inflows and outflows. Additional templates cover committed facilities, reported annually on a T+70 basis where total committed amounts exceed £10m, at both solo and group level, and liquidity market risk sensitivities, which are primarily aimed at life insurers based on current exposures.
Respondents to CP19/24 welcomed the move to standardised liquidity reporting for major life insurers, explicitly referencing market stresses such as COVID-19 as a driver for greater consistency and comparability. However, firms also requested simplifications and clarifications to the proposed templates, which the PRA only partially addressed in the final PS15/25 package.
The PRA’s extended implementation deadline of 30 September 2026 now sets the key timing constraint for insurers to build, test and embed the new liquidity reporting across in-scope entities.
