Technical advice on the implementation of the new proportionality framework under Solvency II

The review of the Solvency II Directive will introduce a new framework for proportionality in Solvency II Directive which represents a shift towards a more robust and transparent application of the proportionality principle within the insurance industry. The new framework introduces a set of objective criteria to identify undertakings (and groups) as small and non-complex (SNCUs) in relation to the nature, scale and complexity of their risks, allowing them to use specific proportionality measures. In addition, supervisory authorities are also empowered to grant or withdraw formal approval to undertakings that, while not complying with the criteria to classify as small and non-complex, have a risk profile that justifies the use of some of the proportionality measures applicable to small and non-complex undertakings.

This document is a response to the European Commission's Call for Advice of 30 April 2024, with the objective of specifying the methodology for classifying undertakings and groups as small and non-complex and detailing the conditions for granting or withdrawing supervisory approval for proportionality measures for undertakings not classified as small and non-complex.