The following Financial Services guidance note Produced in partnership with a member of a leading accounting firm provides comprehensive and up to date legal information covering:
The requirements of the Solvency II framework (Solvency II) are set out in principle in Directive 2009/138/EC (SII Directive), as amended by Directive 2014/51/EU (Omnibus II) and Regulation 2015/35 (SII Regulation) and refers to measures which form part of a comprehensive harmonisation of the capital adequacy regime for (re)insurance firms in the EU. Solvency II is part of a group of measures aimed at increasing consumer protection (in this case for insurance policyholders) and stability within financial markets. For the first time, Solvency II introduces economic risk-based solvency requirements across all EU Member States. Rather than a 'one size fits it all', each insurer’s individual risk profile shall determine its specific capital requirements. Furthermore, it puts a greater focus on the risk management and sets stricter rules with regard to the public disclosure of information. Solvency II came into force on 1 January 2016 (please see Practice Note: Solvency II—essentials for further information).Directive 2009/138/ECDirective 2014/51/EURegulation (EU) 2015/35
European Insurance and Occupational Pensions Authority (EIOPA) uses the concept of pillars to group the strands of measures within Solvency II. Please note that this is not a concept used in the Solvency II Directive itself (see Practice Note: Solvency II—essentials for further information):
Pillar 1—harmonised valuation and risk-based capital requirements: firms should have adequate risk-based capital. Asset and liability valuations should be prudent and market consistent. For more information about Pillar 1 requirements, see Practice Notes: Solvency II—Pillar 1 capital requirements: valuation, classification and eligibility and Solvency II—Pillar 1 capital requirements: required amounts.
Pillar 2—harmonised governance and risk management requirements: higher standards of risk management and
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234