Solvency II—one minute guide
Solvency II—one minute guide

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • Solvency II—one minute guide
  • Scope of this guide
  • What is Solvency II?
  • Objectives
  • Main features
  • Background to Solvency II
  • Timeline
  • UK implementation of Solvency II
  • What entities does Solvency II apply to?
  • Three pillars
  • more

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.

Scope of this guide

This One Minute Guide provides a high-level introduction to the regime under the Solvency II Directive (2009/138/EC) (Solvency II).

What is 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:

  1. improved consumer protection through enhanced policyholder protection across the EU

  2. 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

  3. deepened EU market integration through the harmonisation of supervisory regimes, and

  4. increased international competitiveness of EU insurers

Main features

Informally, the Solvency II programme is divided into a 'three-pillar' structure:

  1. Pillar 1—Capital requirements

  2. Pillar 2—Governance and risk management requirements, and supervisory review

  3. Pillar 3—Disclosure and transparency requirements

Solvency II was not intended to