Solvency UK firms move matching adjustment returns from Excel to Extensible Business Reporting Language
By IAN Editorial Desk – PRA shifts matching adjustment returns from Excel to Extensible Business Reporting Language Solvency UK firms will implement...
PRA shifts matching adjustment returns from Excel to Extensible Business Reporting Language
Solvency UK firms will implement post-review reporting changes through a single taxonomy update, including the transfer of the Matching Adjustment Asset and Liability Information Return (MALIR) from Excel to Extensible Business Reporting Language (XBRL). The package also removes a permission requirement for equity-accounted subordinated liabilities to be classified into own funds tiers. The PRA published PS18/26, Solvency UK: Post-implementation reporting and disclosure amendments and Own Funds permissions update, on 29 July 2026 after reviewing feedback on CP22/25 and Proposal 1 of CP4/26.
PS18/26 is relevant to UK Solvency II firms, the Society of Lloyd’s, its members and managing agents. It also applies to insurance and reinsurance groups, UK holding companies and, for CP22/25 content, third-country branch undertakings.
Matching adjustment reporting
MALIR is the main reporting channel for asset and liability data in matching adjustment (MA) portfolios. Moving it from spreadsheet submission into XBRL changes the operational reporting process for portfolios backing MA benefit, while the PRA is also removing duplicated data points between MALIR and the wider Quantitative Reporting Templates (QRTs).
- MALIR transfer: The MALIR templates move from Excel to XBRL, ending the temporary Excel-based approach that CP19/23 had committed to retain for at least two years while the PRA assessed an alternative reporting interface.
- Duplicate data: The PRA will remove known duplicate reporting and inconsistencies between MALIR and QRTs, and change the approach to reporting paired assets and derivatives in MALIR templates.
- Cashflow signs: MA.02.01 liability outflows and asset inflows must both be reported as positive values, after a respondent asked for MALIR validations consistent with other XBRL reporting templates.
Own funds classification
The own funds change is narrower than the MA reporting shift, but it affects how subordinated liabilities are treated in regulatory capital reporting. The final policy aligns equity-accounted and liability-accounted subordinated liabilities for own funds tier classification, removing an approval step rather than changing the underlying capital instrument.
- Permission removal: Equity-accounted subordinated liabilities will no longer need PRA permission to be classified into own funds tiers, aligning their treatment with liability-accounted subordinated liabilities for classification purposes.
- Template treatment: The final policy updates terminology and instructions in Own Funds templates IR.23.01, IR.23.02, IR.23.03 and IR.23.04, while the Solvency II balance sheet template IR.02.01 receives instruction changes only.
- Validation checks: One validation check is removed, while another is amended to assist calculation across IR.23.01 and IR.02.01, following concerns raised on the draft reporting approach.
NACE codes and branch data
The PRA made targeted changes where respondents identified avoidable reporting burdens, particularly around dual UK and EU activity codes and projected branch liabilities. Those changes preserve the broader move to updated classifications while reducing the proposed data horizon for branches.
- NACE transition: Reporting templates IR.06.02, IR.11.01 and MA.01.01 transition to Nomenclature of Economic Activities (NACE) 2.1 classification, and firms may use NACE 2.1 codes from the 31 December 2026 reporting reference date if they wish.
- EU misalignment: Respondents highlighted misalignment with the EU transition to NACE 2.1, including temporary extra costs for firms reporting under both UK and EU regimes from sourcing dual sets of codes.
- Branch FSCS data: Third-country branches will report one year of projected Financial Services Compensation Scheme (FSCS) liabilities data rather than the proposed three years, reducing a branch-specific reporting burden.
Template corrections
Several amendments correct template mechanics rather than prudential calibration. The PRA is correcting errors, updating references and resolving inconsistencies identified after the Solvency UK reporting reforms took effect at the end of 2024.
- IR.05.04 variant: The PRA decided not to add a new template variant for IR.05.04.02 and retained existing reporting requirements, including solo quarterly reporting, group annual reporting, group quarterly reporting, solo disclosure and group disclosure.
- Non-life annuity date: The reference date for non-life annuity provision progression in IR.16.01 changes from 31 December 2024 to 31 December 2026, aligning it with the final policy date.
- Reporting corrections: The PRA will make minor corrections to inconsistencies and errors identified by respondents, and clarificatory amendments to templates and instructions.
Cost assessment
One respondent argued that certain costs were higher than initially assessed, citing temporary additional costs from sourcing dual NACE code sets and costs associated with third-country branches reporting three-year projected FSCS liabilities. The PRA’s position is that the final amendments do not materially change the cost-benefit analysis in CP22/25, and that further clarifications should create minimal incremental costs for firms.
Legislative path
The final policy and rule instrument apply for reporting reference dates on or after 31 December 2026, with Own Funds and Group Supervision changes taking effect on that date. The PRA also intends to publish the updated reporting taxonomy shortly after PS18/26 and said interim reporting measures are not required.
Sources: bankofengland.co.uk · bankofengland.co.uk · cliffordchance.com · cliffordchance.com
