New Capital Requirements for Insurance Undertakings

In 1997, a decision was made at a European level to come up with a design for a comprehensive system to create new capital requirements for insurance undertakings. In a first, quickly implemented step, the required changes to the existing directives were made (Solvency I). The plan was then to overhaul the entire system in a second step. All efforts in this direction are referred to under the title “Solvency II”.

Therefore, Solvency II is a new European system of supervision that is intended to provide supervisory authorities with the right qualitative and quantitative tools to assess the overall solvency of an insurance undertaking with sufficient accuracy.

Solvency II aims to create methods for the risk-based control of the overall solvency of insurance undertakings. The previous, static system for determining capital requirements is being replaced by a risk-based system that exceeds the previous capital requirements stipulated by insurance supervision legislation and, above all, takes account also of qualitative elements, such as management and internal risk management.

The pages in this section of the FMA website are intended to provide interested readers with general information on Solvency II, and to explain the latest developments and provide a single source from which all relevant documents can be downloaded.