Solvency II reviews the prudential regime for insurance and reinsurance undertakings in the European Union.
The Solvency II Directive (Directive 2009/138/EC [recast]) was adopted in November 2009, and amended by Directive 2014/51/EU of the European Parliament and of the Council of 16 April 2014 (the so-called “Omnibus II Directive").
On 10 October 2014, the European Commission (EC) adopted the Delegated Regulation (Delegated Regulation (EU) 2015/35) containing implementing rules for Solvency II. The Delegated Regulation was published in the Official Journal on 17 January 2015.
On 20 September 2015, the EC adopted the Delegated Regulation 2016/467 amending Commission Delegated Regulation (EU) 2015/35 concerning the calculation of regulatory capital requirements for several categories of assets held by insurance and reinsurance undertakings.
The first set of Solvency II Implementing Regulations laying down implementing technical standards with regard to the supervisory approval procedures for undertaking-specific parameters, ancillary own funds, matching adjustment, special purpose vehicles, internal models, and joint decision on group internal models was adopted in March 2015. The second set of Implementing Regulations is expected to be adopted before the end of 2015.
The accompanying Guidelines have been published in all the EU official languages on EIOPA's website.
In July 2015, EIOPA published a Note "Need
for high quality public disclosure: Solvency II Report on solvency and
financial condition and the potential role of external audit".
1 April 2015 onwards – Phasing-in of Solvency II for supervisory approval processes and decisions related to group supervision (article 308a of the Solvency II Directive);
3rd quarter of 2015 – Release of the XBRL taxonomy based on Set 2 of the Implementing Technical Standards (ITS);
3rd quarter of 2015 - Update of the XBRL Tool for Undertakings for the application of the "full" Solvency II taxonomy;
3rd quarter of 2015 – Publication of Set 2 of the Solvency II Guidelines in all EU languages followed by the comply-or-explain exercise by Member States;
31 December 2015 – termination of the
1 January 2016 – Application of the Solvency II regime;
Mid-April 2016 – First prudential reporting by undertakings under Solvency II with reference to the first day of application (for undertakings with financial year end on 31 December).
Preparatory Phase: submission of information
1st week of June 2015 – Annual reporting by undertakings under the Solvency II Preparatory Phase with reference to 31 December 2014 (mid-July for groups);
Last week of November 2015 – Quarterly reporting by undertakings under Solvency II Preparatory Phase with reference to 30 September 2015 (first week of January 2016 - for groups).
EIOPA’s additional regulatory work on Solvency II
EIOPA is currently preparing technical advice to the European Commission on the identification and calibration of infrastructure investment risk categories under Solvency II.
Future work will involve the review of the solvency capital requirement standard formula, and the reporting on the application of long-term guarantee measures and measures on equity risk.
EIOPA publishes on a regular basis key technical information supporting the undertakings in performing calculations under Solvency II, such as the relevant risk-free rate and the value of the symmetric adjustment to be applied to the equity risk capital charge.
Earlier regulatory work and advice on Solvency II
In October 2013, EIOPA issued Guidelines on the Preparatory Phase to promote the active preparation by National Competent Authorities, insurance companies and groups in key areas of Solvency II: the System of Governance, the Forward-Looking Assessment of Undertakings' Own Risk (based on ORSA principles), the Submission of Information to NCAs and the Pre-application for Internal Models. These Guidelines followed EIOPA’s Opinion on interim measures regarding Solvency II issued in December 2012 and the respective public consultation in March 2013.
EIOPA and its predecessor, CEIOPS, have been advising the European Commission on the Solvency II project in its various stages of development since 2004. This has included:
Advice on the Directive (“Level 1”)
Advice on the Delegated Regulation (“Level 2”)
Advice on equivalence assessments
EIOPA has carried out five quantitative impact studies accompanying its advice on the regulation
In 2013, EIOPA also provided the European Commission with two technical reports analysing the options for long term guarantees and investments under Solvency II.