Solvency II

• Date: May 05, 2011
• Source: Admin

Solvency II is a new, stronger EU-wide requirement on capital adequacy and risk management for insurers with the aim of increasing protection for policyholders. The strengthened regime should reduce the possibility of consumer loss or market disruption in insurance.

Solvency I was a minimum harmonization directive introduced in the early 1970s. It allowed for differences to emerge in the way that insurance regulation was applied across Europe leading to different regimes. It was also primarily focused on the prudential standards for insurers and did not include requirements for risk management and governance within firms.