Solvency II
This comment piece highlights the Regulation to Supervision approach for the Solvency II project.
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Background
Solvency II is a fundamental and wide-ranging review of the capital adequacy regime for the European insurance industry. It represents both a challenge and an opportunity for European insurers.
On January 1, 2013, Solvency II will introduce a modern, economic and risk-based regulation of insurance and reinsurance in all Member States.
Implementation of Solvency II is not just a regulatory changeover but also a complete business reassessment for European insurers and reinsurers.
EIOPA and Solvency II
The European Union launched a new insurance supervisory authority, European
Insurance and Occupational Pensions Authority (EIOPA) in January 2011.
The EIOPA is one of three European supervisory bodies overseeing the financial industry. The other two are responsible for banking, EBA (European Banking Authority) and for securities ESMA (European Securities and Market Authority).With amendments in the directive and formation of the EIOPA, the Solvency II project has moved from the development phase to the implementation phase. The EIOPA with its new powers and responsibilities will support the implementation and corresponding regulatory changes.
With the implementation of Solvency II, firms will be able to understand risk exposure, perform risk assessment of their business and maintain a considerable amount of capital to meet capital adequacy requirements.........
