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Solvency II

Solvency II is the updated set of regulatory requirements for insurance firms that operate in the European Union.
The rationale for European Union insurance legislation is to facilitate the development of a Single Market in insurance services in Europe, whilst at the same time securing an adequate level of consumer protection.

The third-generation Insurance Directives established an "EU passport" (single licence) for insurers based on the concept of a minimum harmonisation and mutual recognition. Many Member States have concluded that the current minimum EU requirements are not sufficient and have implemented their own reforms, thus leading to a situation where there is a patchwork of regulatory requirements across the EU. This hampers the functioning of the Single Market.

Solvency II will be based on economic principles for the measurement of assets and liabilities. It will also be a risk-based system as risk will be measured on consistent principles and capital requirements will depend directly on this.
While the Solvency I Directive was aimed at revising and updating the current EU Solvency regime, Solvency II has a much wider scope.

Learn more about LIST solutions concerning Solvency II.