The following Financial Services guidance note provides comprehensive and up to date legal information covering:
BREXIT: As of exit day (31 January 2020) the UK is no longer an EU Member State. However, in accordance with the Withdrawal Agreement, the UK has entered an implementation period, during which it continues to be subject to EU law. This has an impact on this Practice Note. For further guidance, see Practice Note: Impact of Brexit: Solvency II—quick guide.
This One Minute Guide provides a high-level introduction to the regime under the Solvency II Directive (2009/138/EC) (Solvency II).
Solvency II is an EU legislative programme implemented across EU Member States. It came into effect on the 1 January 2016 and introduced a harmonised, EU-wide insurance regulatory regime, replacing 14 EU insurance directives.
Solvency II has four main objectives:
improved consumer protection through enhanced policyholder protection across the EU
modernised supervision through the 'Supervisory Review Process' (SRP), which focuses on evaluating insurers’ risk profiles and the quality of their risk management and governance systems
deepened EU market integration through the harmonisation of supervisory regimes, and
increased international competitiveness of EU insurers
Informally, the Solvency II programme is divided into a 'three-pillar' structure:
Pillar 1—Capital requirements
Pillar 2—Governance and risk management requirements, and supervisory review
Pillar 3—Disclosure and transparency requirements
Solvency II was not intended to
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