Prudential Regulation Authority (PRA)
The Prudential Regulation Authority sets the capital and solvency rules that keep insurers able to pay claims. It sits inside the Bank of England and works alongside the FCA to keep the insurance market safe and sound.
What the PRA is and its statutory role
The PRA is the UK’s prudential regulator for insurers, banks and major investment firms. It was created under the Financial Services Act 2012 and sits within the Bank of England, replacing the old Financial Services Authority split of 2013.
Its job is to make sure insurers hold enough capital and reserves to pay claims, even in a bad year. For insurance specifically, that means enforcing the Solvency UK regime, which sets how much capital an insurer must hold against the risks on its book.
The PRA has three statutory objectives: promote the safety and soundness of firms, contribute to policyholder protection for insurers, and facilitate effective competition. It does not set conduct rules or handle individual complaints — that is the FCA’s job.
The PRA supervises firms directly, sets prudential rules, and can restrict or withdraw a firm’s authorisation if it fails to meet solvency standards.
How the PRA affects your insurance
You will never contact the PRA directly, but its rules are why your insurer is still there to pay out when you claim. Solvency UK capital requirements are designed so an insurer can absorb a bad year of claims — a major flood event or a spike in subsidence claims — without collapsing.
The PRA’s stress tests and capital add-ons shape how much insurers charge, and how selective they are about the risks they take on. If an insurer is under prudential pressure, it may tighten underwriting or withdraw from a market, which is one reason cover can become harder to find in high-risk areas.
The PRA works alongside the FCA under the Consumer Duty and wider regulatory framework described in our explainer on the FCA and PRA. For insurers, brokers and MGAs, the PRA’s authorisation and supervision regime determines who can write business at all.
Key recent PRA interventions
The PRA has continued to bed in the Solvency UK regime, the post-Brexit reform of Solvency II designed to free up capital for insurers to invest while keeping policyholder protection intact. It has also kept a close watch on insurers’ exposure to climate-related risk, including flood and subsidence claims.
Alongside the FCA, the PRA has pushed insurers to strengthen operational resilience — making sure claims can still be paid if a major IT or third-party outage hits. Our explainer on the FCA and PRA sets out how the two regulators divide this work, and the Consumer Duty explainer covers where conduct and prudential rules meet.
How to engage with the PRA
You cannot contact the PRA about your own policy or complaint. It does not deal with individual customers at all. If you have a problem with your insurer, complain to the insurer first, then take the case to the Financial Ombudsman Service if you remain unhappy.
The PRA publishes policy statements, supervisory statements and consultation papers that firms must respond to. Insurers, brokers and industry bodies engage with the PRA directly through these consultations and through routine supervision.
Sources
Financial Services Act 2012. Bank of England/PRA: Solvency UK reforms. PRA supervisory statements and policy statements on insurance. PRA statutory objectives (safety and soundness, policyholder protection, competition). PRA operational resilience requirements for insurers.