This resulted in UKI Limited overstating its solvency to the PRA and to the market. UKI Limited, is a subsidiary and principal underwriter of Direct Line Group (DLG), and now part of Aviva plc.

The miscalculation arose due to ineffective preventative and detective controls and resourcing issues in its finance and actuarial functions. It went undetected by DLG’s internal controls for a significant period of time.

Following identification of the miscalculation, DLG made a Regulatory News Service announcement acknowledging the miscalculation and the knock-on effect on the reported SCR Coverage Ratio and reported the correct figure. DLG’s senior management notified the PRA without delay, undertook detailed investigations to ascertain the root cause of the error and remediated the position. Since its acquisition of DLG in 2025, Aviva has continued to improve DLG’s finance and actuarial control framework.

The PRA permitted UKI Limited to participate in the Early Account Scheme (EAS) and the firm made early admissions and agreed to resolve the matter, thereby qualifying for a 50% enhanced reduction in the amount of the financial penalty which otherwise would have been £21.25m.

This case is a landmark enforcement outcome for the PRA as it is the first in which the EAS has been used. 

Sam Woods, Deputy Governor for Prudential Regulation and CEO of the PRA, said: “We rely on accurate and reliable data from firms in order to be able to supervise them effectively. This penalty reflects the importance of firms getting their prudential reporting right.

“DLG and Aviva’s proactive engagement with the PRA, via the Early Account Scheme, shows how enforcement action can be more efficient when firms are open, candid and accept responsibility for failings at an early stage.”

An Aviva spokesperson said: “The PRA has acknowledged that DLG and, subsequent to completion of the acquisition, Aviva, have co-operated with their investigation in an exemplary manner and, as a consequence, the financial penalty has been discounted by the maximum amount possible.”

They added: “Aviva was fully aware of this matter prior to agreeing the terms of the acquisition of DLG and the outcome is fully provided for in the acquisition balance sheet.

“The resolution of this matter has no impact on the integration of DLG into Aviva, which is proceeding well, and no impact on the expected financial benefits arising from the acquisition.”