Which assessment applies to which firm?
Start with the regulator. Banks, building societies, PRA-designated investment firms and insurers work to the PRA Rulebook, while FCA solo-regulated firms work to the FCA Handbook, and the table below sets every assessment against the same labels.
| Assessment | Firms in scope | Regulator | Rule source | Guidance | How often | Who approves | What the regulator sets from it | RiskTAE page |
|---|---|---|---|---|---|---|---|---|
| ICAAP | Banks, building societies and PRA-designated investment firms | PRA | Internal Capital Adequacy Assessment Part | SS31/15; SS4/25 for SDDTs from 1 January 2027 | Annually; at least every two years for SDDTs other than new and growing banks | Management body | A Pillar 2A capital requirement and a PRA buffer (SS31/15) | ICAAP |
| ILAAP | Banks, building societies and PRA-designated investment firms | PRA | Internal Liquidity Adequacy Assessment Part | SS24/15; SoP1/18 | Reviewed at least annually; at least every two years for SDDTs | Management body | Individual liquidity guidance | ILAAP |
| ICARA | MIFIDPRU investment firms, SNI firms included, alone or through a group ICARA process | FCA | MIFIDPRU 7 | MIFIDPRU 7 guidance; FG20/1; Wind-down Planning Guide | Reviewed at least every 12 months and after a material change; MIF007 no more than 12 months apart | Governing body | Nothing routinely: the firm sets its own threshold requirements, and the FCA can require more after a review | ICARA |
| ORSA | UK Solvency II insurers, the Society of Lloyd’s and managing agents for each syndicate | PRA | Conditions Governing Business Part, chapter 3 | SS41/15 and the EIOPA ORSA guidelines | Regularly and after any significant change in risk profile; at least annually under the guidelines | Governing body | No figure; the PRA reviews ORSA reports on a risk-based basis | ORSA |
| Recovery plan | Banks, building societies, PRA-designated investment firms and qualifying parent undertakings | PRA | Recovery Plans Part | SS9/17 | Reviewed at least annually; at least every two years for SDDTs since 1 April 2026 | Management body, before the plan goes to the PRA | No figure; the PRA assesses whether the plan could be used and estimates recovery capacity | Recovery planning |
| Solvent exit analysis (banks) | UK banks and building societies that are not G-SIIs or O-SIIs, or in such a group, and not subject to the Operational Continuity Part | PRA | Recovery Plans Part, chapter 7, since 1 October 2025 | SS2/24 | After a material change and at least every three years | Under the firm’s governance, with a named accountable executive | Nothing set; provided on request, and an execution plan if exit becomes a reasonable prospect | Wind-down and solvent exit |
| Solvent exit analysis (insurers) | UK Solvency II firms, non-Directive insurers and the Society of Lloyd’s, except firms in passive run-off | PRA | Preparations for Solvent Exit Part, since 30 June 2026 | SS11/24 | After a material change and at least every three years | Under the firm’s governance, with an accountable Senior Manager | Nothing set; provided on request | Wind-down and solvent exit |
| Wind-down plan | FCA solo-regulated firms; required within the ICARA for MIFIDPRU investment firms; expected of payment and e-money firms | FCA | MIFIDPRU 7.5.7R for investment firms; for other firms the Wind-down Planning Guide imposes no obligation, and the FCA cites Principle 4 for payment and e-money firms | Wind-down Planning Guide; FG20/1 | Periodically and after a material change; within the ICARA cycle for investment firms | Governing body | For investment firms, wind-down costs feed the threshold requirements; otherwise nothing set | Wind-down and solvent exit |
Source for each row: ICAAP, ICAA Part rule 1.1 and SS31/15 paragraphs 2.1, 2.2, 5.14 and 5.20, with SS4/25 paragraph 2.2 and PS4/26 paragraphs 1.15 and 1.16; ILAAP, ILAA Part rules 1.1, 13.1 and 13.3 and SS24/15 paragraphs 2.2 and 3.9; ICARA, MIFIDPRU 7.1.3R, 7.4.8G, 7.8.2R, 7.8.4R, 7.8.8R and 7.9.5R; ORSA, Conditions Governing Business rules 1.1, 3.8, 3.10 and 12.3, SS41/15 paragraphs 2.2 and 7.3 and EIOPA Guideline 14; recovery plan, Recovery Plans Part rules 4.2 and 5.2 and SS9/17 paragraphs 1.2, 1.7 and 2.41; solvent exit, Recovery Plans Part rules 7.1 to 7.4, SS2/24 paragraphs 2.20, 2.25 and 3.3, Preparations for Solvent Exit Part rules 1.1 to 2.1 and SS11/24 paragraphs 2.22 and 2.26; wind-down plan, MIFIDPRU 7.5.7R to 7.5.9R, WDPG 2.1.1, 3.1.4 and 3.1.5 and the FCA’s review of payments firms of 26 June 2025.
There is no row for an ICLAAP. The term does not appear in the PRA’s ICAAP or ILAAP rules or supervisory statements, or in MIFIDPRU 7; the first question below explains how it relates to the ICAAP and ILAAP.
Is an ICARA the same as an ICAAP?
No. The ICAAP is the PRA’s capital assessment for banks, building societies and PRA-designated investment firms, while the ICARA is the FCA’s single process for MIFIDPRU investment firms, covering own funds, liquid assets and wind-down together.
The logic differs as well as the scope. The ICARA starts from harm to clients, markets and the firm, and from winding down (MIFIDPRU 7.4.9R), and the firm sets its own threshold requirements, which the FCA can raise after a review (7.4.8G(6)). The ICAAP starts from the firm’s material risks, and the PRA sets the Pillar 2A requirement and the PRA buffer itself after the SREP (SS31/15 paragraphs 5.14 and 5.20). A bank also needs a separate ILAAP for liquidity and a separate recovery plan; an investment firm covers both inside the ICARA, through its liquid assets threshold requirement and its recovery actions (MIFIDPRU 7.5.5R and 7.7.2R). Our explainers on what an ICARA is and what an ICAAP is go further.
Does a bank need both an ICAAP and a recovery plan?
Yes, because they answer different questions. The ICAAP asks whether the bank holds enough capital for its risks now and across its plan; the recovery plan sets out “measures to be taken by the firm to restore its financial position following a significant deterioration of its financial situation” (Recovery Plans Part rule 2.2).
Both go to the management body. The recovery plan must be overseen, assessed and approved by it before the firm submits the plan to the PRA, the audit committee reviews it periodically, and an executive director on the management body is named as responsible for it (rule 5.2). When the PRA assesses a recovery plan it looks for evidence that the plan could be used, realistic numbers and timelines for each option, and a board that can show how it would execute the plan (SS9/17 paragraph 1.7).
The two should share their stresses. SS9/17 paragraph 2.60 encourages firms to keep recovery plan scenario testing consistent with the stress testing behind the ICAAP and ILAAP, and SS24/15 paragraph 2.40A strongly encourages combining the liquidity contingency plan with the recovery plan. Our guide to recovery plan indicators covers the triggers that connect them.
Is a solvent exit analysis the same as a wind-down plan?
They answer the same question, how the firm would leave the market in an orderly way, for different regulators and under different rules. The PRA’s term is solvent exit, and it is a rule; the FCA’s term is wind-down, and outside the ICARA it is guidance and supervisory expectation.
A non-systemic bank or building society has had to prepare for solvent exit and keep a solvent exit analysis since 1 October 2025, updated after any material change and at least every three years, and provided to the PRA on request (Recovery Plans Part rules 7.1 to 7.4). Insurers in scope have had the same duty since 30 June 2026 (Preparations for Solvent Exit Part rule 2.1). A separate solvent exit execution plan is needed only when exit becomes a reasonable prospect, or when the PRA asks for one (SS2/24 paragraph 3.3).
On the FCA side, MIFIDPRU 7.5.7R makes wind-down planning a rule for investment firms. For other solo-regulated firms the Wind-down Planning Guide “does not impose any obligation on a firm to create a wind-down plan” (WDPG 2.1.1), but the FCA treats one as a capability it expects payment and e-money firms to have under Principle 4. Its review of those firms, published on 26 June 2025, found almost all the plans it saw “disconnected from the firm’s risk management framework”, and flagged details such as “not considering meeting obligations to safeguard residual customer funds for 6 years”. Our guide to the solvent exit analysis and our wind-down plan template cover each document.
What changes for SDDTs?
The cycle lengthens and the expectations get simpler, in stages. Since 20 January 2026 an SDDT has had to review its ILAAP at least every two years (ILAA Part rule 13.1(1)) and update its ICAAP in full at least every two years, unless it is a new and growing bank (PS4/26 paragraphs 1.15 and 1.16; SS4/25 paragraph 2.2).
- Since 1 April 2026 an SDDT has had to review its recovery plan at least every two years (PS10/26 paragraph 1.12; Recovery Plans Part rule 4.2). The PRA expects SDDTs to use the extra time “to develop higher quality recovery plans” than an annual cycle would allow (SS9/17 paragraph 2.84B).
- From 1 January 2027 SS4/25 replaces SS31/15 as the ICAAP guidance for SDDTs (PS4/26 paragraph 1.16).
- The PRA does not generally apply Pillar 2 liquidity guidance to SDDTs (SoP1/18 paragraph 1.6), and SS24/15 gives them a shorter ILAAP template in Appendix 2 (paragraph 2.5).
- The solvent exit rules in chapter 7 of the Recovery Plans Part have no SDDT carve-out, so an SDDT within rule 7.1 still keeps a solvent exit analysis on the three-year cycle.
Our article on the SDDT ICAAP under SS4/25 covers the new guidance, the SDDT eligibility checker tests the criteria, and our SDDT regime page covers the decision to opt in.
Questions readers ask
Does a UK bank need an ICLAAP?
Not under that name. The term does not appear in the PRA’s ICAAP or ILAAP rules or supervisory statements, or in MIFIDPRU 7. A PRA-regulated bank needs an ICAAP and an ILAAP under separate Parts of the Rulebook, each approved by the management body, and it can share chapters such as the business model and stress scenarios between them as long as each reaches its own conclusion.
Does an FCA investment firm need a recovery plan?
Its recovery planning sits inside the ICARA. MIFIDPRU 7.5.5R requires it to set the levels of own funds and liquid assets that would signal a credible risk of breaching its threshold requirements, and the recovery actions it would take.
Does an insurer need a solvent exit analysis as well as an ORSA?
Yes, since 30 June 2026, if it is a UK Solvency II firm or a non-Directive insurer and not in passive run-off (Preparations for Solvent Exit Part rules 1.1 and 1.2). SS11/24 lets the firm include the analysis as a discrete section of its ORSA (paragraph 2.3). Our guide to what an ORSA is covers the link.
Can a bank combine its contingency funding plan and its recovery plan?
The PRA strongly encourages it. SS24/15 paragraph 2.40A expects separate documents to be exceptional and consistent with each other. See what is an ILAAP? for how the contingency plan fits the liquidity assessment.
Sources: PRA Rulebook, Internal Capital Adequacy Assessment Part; Internal Liquidity Adequacy Assessment Part; Recovery Plans Part; Conditions Governing Business Part; Preparations for Solvent Exit Part; PRA SS31/15; SS4/25 (effective 1 January 2027); SS24/15 (January 2026); SoP1/18 (December 2023); SS9/17 (March 2026); SS2/24 (12 March 2024); SS11/24 (December 2024); SS41/15 (November 2024); EIOPA ORSA Guidelines; PS4/26 (20 January 2026); PS10/26 (26 March 2026); FCA Handbook, MIFIDPRU 7 and Wind-down Planning Guide; FCA, Risk management and wind-down planning at e-money and payments firms (26 June 2025, updated 10 July 2025). Accessed 10 October 2026.
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