Overview on our discussion of the PRA’s solvent exit planning requirements

As UK insurers work towards the 30 June 2026 implementation date for the solvent exit planning (SEP) requirements of the Prudential Regulation Authority (PRA), firms across the market are addressing the practical challenges of interpreting regulatory expectations, embedding new processes and integrating SEP within existing frameworks.¹

In February 2026, Milliman convened a roundtable where fourteen professionals from twelve firms came together to share their experiences in a confidential forum designed for those directly involved in developing and implementing SEP frameworks. The session provided an opportunity to discuss outstanding issues, benchmark emerging approaches, share best practices and explore solutions to common challenges. Drawing on perspectives from a range of firms—including life insurers, general insurers, composite firms, and reinsurers, as well as friendly societies and firms with significant BPA/annuity or unit-linked business—several common themes emerged.

The discussion was facilitated by the authors and conducted under Chatham House rules to encourage candid dialogue. We extend our sincere thanks to all participants for their attendance and valuable contributions.

Insurance industry progress toward SEP

Although firms are at different stages of readiness, all reported meaningful progress and expect to complete assurance processes ahead of the June deadline.

Larger organisations noted that they have been able to leverage elements of work already undertaken for recovery and resolution planning, including aspects of exit actions, governance pathways and cross-functional roles, although they are generally developing separate solvent exit analysis (SEA) documentation. Smaller or more specialised firms are typically adopting a more proportionate approach by, for example, integrating the SEA into established processes such as the ORSA or drawing on other wind-down planning exercises to limit the need for extensive new analysis and documentation.

Firms with multiple regulated entities highlighted the need to prepare separate SEAs for each entity and the associated practical implications. In particular, it was noted that this involves group-level engagement and sign-off, rather than solely at entity level, giving the plans considerable senior visibility.

It was acknowledged that resource pressure is high because SEP represents a sizeable new requirement alongside business-as-usual (BAU) activities.

The challenges for insurers surrounding solvent exit triggers and indicators

Defining the triggers for entering a solvent exit—and the point at which a solvent exit execution plan (SEEP) should be prepared—remains one of the most challenging aspects of SEP development according to participants.² Participants agreed that triggers should support informed, context-dependent decision-making rather than operate as mechanical thresholds. In practice, this requirement has been interpreted as prompting escalation through governance processes and senior management discussion, rather than automatically triggering the exit itself. Context and judgement therefore remain central, including consideration of the credibility of any remaining recovery actions.

Financial triggers and indicators are generally more straightforward to define and typically draw on solvency coverage, liquidity metrics or established points of regulatory intervention. These often align with existing recovery frameworks. Recent PRA dialogue has provided greater clarity that maintaining 100% SCR coverage throughout the entire exit period may not be required, provided assets remain sufficient to meet liabilities as they fall due.³ However, some participants noted that this position may still require firm-specific discussion with their PRA supervisors.

Non-financial indicators are more nuanced and inherently qualitative. Strategic shifts within a group, operational failures or reputational deterioration may all prompt consideration of a solvent exit. However, firms are cautious about defining these too precisely to avoid binding management to action that is premature or not appropriate to the specific circumstances. As a result, many are opting for high-level statements that acknowledge a broad range of circumstances (for example, adverse media coverage or significant regulatory criticism).

Some participants also noted consideration of success indicators to assess whether a chosen solvent exit strategy remains viable once initiated. Firms are identifying the key assumptions underpinning their plans and considering what would happen if these were not true. These may relate to the credibility of remaining management actions, the stability of outsourced arrangements or the feasibility of key operational dependencies. If these assumptions no longer hold, it may indicate that the original approach is no longer sustainable.

The participants discussed potential triggers for the preparation of a SEEP. Some firms expect to begin preparing a SEEP once recovery actions are initiated, where these are considered feasible. Others are considering starting earlier, such as at the onset of a significant stress, particularly where events may unfold rapidly. Participants discussed the importance of considering the time required to develop a SEEP relative to the time available in a recovery situation and raised concerns about the ability to agree on SEEP timelines or content with the PRA during a market-wide stress event. To support SEEP production, several firms are developing so-called skeleton SEEPs: early-stage templates that can be quickly expanded if required. In some cases, these are embedded within the SEA appendix and outline the components that would be needed should a solvent exit become a realistic prospect. In general, firms noted that balancing the appropriate level of detail between the SEA and SEEP has been an interesting challenge.

SEP requires broad cross-functional involvement within UK insurers

One overarching theme was the general breadth of functions involved in producing the SEA. Unlike some previous regulatory exercises, where actuarial and finance teams may have carried much of the burden, SEP has required meaningful input from a wider range of functions, such as operations, HR, IT, risk and legal. Firms emphasised the importance of ensuring the SEA narrative reflects operational reality rather than being driven purely by financial analysis, thereby highlighting the need to balance qualitative and quantitative input.

The operational implications of runoff were emphasised, including staffing reductions, loss of critical skills, contract dependencies and potential changes to outsourcing arrangements. These considerations often require judgement from senior leadership and reinforce the importance of cross-functional input in developing credible plans.

Solvent exit vs resolution

Participants discussed the relationship between solvent exit and resolution, noting that resolution can involve either a solvent or insolvent exit. This can make terminology challenging, as solvent exit may be seen as a subset of resolution. As a result, firms emphasised the importance of clearly defining terms such as recovery, solvent exit and resolution at the outset of reports to ensure a shared organisational understanding. Some firms are also reconsidering their use of the term “resolution” altogether.

Participants also discussed the practical and conceptual distinctions between solvent exit and resolution. Experience suggests that many operational actions are similar, with the main difference being the starting position and degree of control. Where financial resources are significantly depleted, firms have more limited flexibility and regulatory intervention may be required, constraining available options. For this reason, some firms are reconsidering the use of the term “resolution” to distinguish regulator-led actions from those undertaken by the firm itself.

Modelling approach: How UK insurers are responding to SEP

Modelling approaches varied across firms and reflected differences in business models. For example, life firms noted the need for long runoff projections extending beyond typical ORSA timeframes, while general insurance firms highlighted shorter runoffs with complex cost modelling.

Key considerations in operational cost modelling include contract termination fees, changes in staffing costs during exit and potential loss of economies of scale. Participants discussed avoiding excessive granularity, such as reviewing and modelling each third-party contract in detail. However, some participants from larger firms noted having done this.

Challenges also arise where multiple entities within a group rely on shared operational services, which may become non-viable if a group-wide stress is being experienced. As a result, modelling for a single entity can differ from a group-level perspective, prompting firms to consider whether multiple versions of the modelling are necessary. There was general agreement that an overall group perspective is required, even though the SEA is a solo entity document.

Participants discussed the PRA’s requirement ‘to identify the absolute minimum level of financial resources needed, below which there would be no reasonable prospect of successfully executing a solvent exit.’ Some firms are developing severe but plausible stress scenarios to estimate resource requirements during runoff, while others are using best estimate cash‑flow projections to identify the lowest point of solvency coverage and determine the minimum required buffer.

How UK insurers are approaching assurance and governance in light of SEP

Approaches to assurance vary. Some firms are relying on their internal audit functions to provide independent challenge, while others have commissioned external reviewers to assess gaps or highlight potential weaknesses in the plan. A combination of internal assurance supported by external review is also being adopted by a number of firms, given that the SEA represents a first draft of new regulatory expectations. Most firms expect to summarise assurance activities within the SEA itself, with detailed findings sometimes being placed in appendices.

Firms agreed that the aim is to produce a clear and readable SEA that will enable boards to understand the narrative, assumptions and decision-making logic without being overwhelmed by technical detail.

Conclusion: SEP implementation has common challenges but no one-size-fits-all approach

The challenges discussed during this roundtable, from defining triggers to balancing the level of detail in SEA versus SEEP, are common across the industry. The approaches firms are taking to address these challenges will naturally vary according to their business models, operational capabilities and risk profiles, emphasising that there is no one-size-fits-all approach to SEP implementation. As firms continue to develop their SEP frameworks ahead of the implementation deadline, ensuring these plans are both credible and operationally practical will be key.

Milliman’s solvent exit planning expertise

At Milliman, we have recent experience in supporting clients with SEP, including directly drafting and reviewing solvent exit plans. This is underpinned by our significant expertise in recovery and resolution (R&R) planning and wind-down management, allowing us to support firms across the full range of stress and exit scenarios.

As the June 2026 deadline approaches, Milliman can support organisations with a range of activities, including:

• Conducting gap analyses to assess alignment with SS11/24 and existing frameworks, including recommendations on structuring or embedding SEAs within current documents
• Providing independent assurance and peer benchmarking over SEA quality and regulatory compliance
• Supporting modelling and quantitative analysis, including scenario development, exit cost estimation and resource assessment
• Drafting or reviewing SEAs and SEEPs, including defining governance frameworks, sequenced actions, decision points and stakeholder communications
• Delivering tailored workshops, board or management training and secondment support to strengthen internal capabilities and facilitate effective SEP implementation

We invite you to connect with our team to discuss how Milliman can help your organisation develop a practical, credible and regulator-ready solvent exit plan or deliver an independent assurance review.

¹ Prudential Regulation Authority. (18 December 2024). PS20/24 – Solvent exit planning for insurers. Bank of England. Retrieved March 3, 2026, from https://www.bankofengland.co.uk/prudential-regulation/publication/2024/december/solvent-exit-planning-for-insurers-policy-statement.

Prudential Regulation Authority. (18 December 2024). SS11/24 – Solvent exit planning for insurers. Bank of England. Retrieved March 3, 2026, from https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/supervisory-statement/2024/ss1124-december-2024.pdf.

² The PRA expects a firm to produce a SEEP when solvent exit becomes a reasonable prospect.

³ The Minimum Capital Requirement (MCR) must be met throughout the solvent exit.