PRA proposes a clearer route for friendly-society amalgamations and transfers

The UK’s Prudential Regulation Authority is consulting on changes to Chapter 4 of Statement of Policy 3/15, which explains how it approaches amalgamations and transfers under Part VIII of the Friendly Societies Act 1992. The proposals would make the process clearer while retaining flexibility within the existing statutory framework.

CP12/26 is relevant to UK insurance and reinsurance firms and groups, including firms outside Solvency UK that intend to receive engagements from a friendly society or seek to amalgamate with one.

What CP12/26 proposes

The PRA proposes to describe a typical process in five parts: planning and preparation; recording and analysing the transfer; member engagement and member votes; formal application, public notices and representations; and confirmation assessment. The sequence would not be prescriptive, and firms could take steps in parallel or in a different order where appropriate.

The proposed guidance would codify, reorganise and add detail to the PRA’s existing approach. It is intended to help firms understand the information, timing and costs likely to be involved, rather than create a materially new transaction regime.

Member voting remains an important safeguard. For a transfer, the Friendly Societies Act permits the PRA to dispense with the transferee society’s special-resolution requirement and allow approval by its committee of management. The PRA proposes to explain the factors it would consider when weighing the value of a member vote against its cost and members’ interests.

Separately, the Act permits the PRA to require an independent actuary’s report on a proposed transfer and its likely effects on relevant long-term policyholder members. CP12/26 would give firms more information about when the PRA may require that report and what it would consider when an actuary is appointed.

The proposals do not amend the Friendly Societies Act or determine whether any individual transaction will be approved. Firms would still need to meet the statutory requirements and continue complying with their wider regulatory obligations.

Timing and next steps

The PRA published CP12/26 on 22 July 2026 and is seeking consultation responses by 22 October 2026. It also plans a roundtable for insurers, legal and actuarial firms and relevant trade bodies; expressions of interest are due by 20 August 2026. That nearer date is for roundtable participation, not consultation responses.

The PRA expects to publish a policy statement before April 2027. Subject to consultation responses, the changes would take effect when that policy statement is published.

Sources

• Insurance friendly societies, amalgamations and transfers — CP12/26 — Prudential Regulation Authority.
• PRA consults on updated guidance for friendly society amalgamations and transfers — Bank of England.