The European Council adopted the Directive amending Solvency II on 5 November 2024. It is expected to enter into force by the end of 2024 and Member States will have two years to transpose it.

Our Solvency II report offers an in-depth analysis of the review’s key changes and their potential impact on (re)insurance companies.

The Solvency II review’s main objectives are to:

• Improve the framework's efficiency by promoting long-term investments;
• Enhance the supervision of (re)insurers with cross-border activities;
• Simplify regulations for smaller (re)insurers through proportionality;
• Address new risks, such as climate-related financial risks; and
• Integrate macroprudential tools to prevent systemic risk.

The Solvency II review also includes several mandates for the European Insurance and Occupational Pensions Authority (EIOPA), which will support bringing changes to the Commission Delegated Regulation and other second and third-level texts. As a result, EIOPA has already launched two batches of consultations on regulatory technical standards (RTS), implementing technical standards (ITS) and guidelines.

Our report delves into the Solvency II review’s changes and how they affect each of the framework's three pillars:

• Pillar I: solvency capital requirements (SCR), long-term guarantee measures, risk margin and the relevant risk-free rate;
• Pillar II: governance, climate change and macroprudential considerations; and
• Pillar III: reporting and transparency requirements.

The report also covers the new proportionality measures to lighten the regulatory burden of smaller (re)insurers and captives, which impact all three pillars.

Download the report to stay informed of the Solvency II review’s key amendments and grasp the potential impacts on the insurance industry.