{"id":32290653,"date":"2026-03-02T11:11:26","date_gmt":"2026-03-02T10:11:26","guid":{"rendered":"https:\/\/www.fma.gv.at\/?page_id=32290653"},"modified":"2026-03-25T16:10:00","modified_gmt":"2026-03-25T15:10:00","slug":"the-development-of-solvency-ii","status":"publish","type":"page","link":"https:\/\/www.fma.gv.at\/en\/insurance\/solvency-ii\/the-development-of-solvency-ii\/","title":{"rendered":"The development of Solvency II"},"content":{"rendered":"
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The development of Solvency II<\/p>\n<\/div><\/div>

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Solvency I<\/h2>

Since the 1990s, the Conference of European Supervisory Authorities that was active at the time worked on improving (Solvency I) and restructuring (Solvency II) the EU regulations on solvency introduced in 1973 for non-life insurance undertakings and in 1979 for life insurance undertakings. The Conference of European Supervisory Authorities’ Solvency I Working Group was established in 1994, and published its concluding report in 1997, in which it stated that the European solvency regulations had on the whole proven themselves. The report, however, also stated that own funds regulations in place at the time did not adequately take all risks into account. It was therefore decided in 1997 to design a comprehensive system to create new own funds regulations.<\/p>

In a first step the most necessary changes were made to the existing Directives (Solvency I). These rules entered into force on 1 January 2004 in Austria.<\/p>

An amendment in 1986 of Austria’s Insurance Supervision Act of 1978 (VAG) contained provisions for the first time that by and large conformed with the own funds provisions prescribed in the EU Directives. The legal rules have been frequently amended since then, with the last significant amendment being in the 2003 amendment of the VAG, in which the Directives for Determining the Solvency Margin were transposed into Austrian law (Solvency I). This amendment entered into force on 1 January 2004. In comparison with the amendments made under the Solvency II regime there were only minor adaptations made.<\/p>

Solvency II<\/h2>

Risk-based insurance supervision (Solvency II) entered into force on 01.01.2016 following several years of preparations at European level.<\/p>

The European Commission conducted several calls for advice in which it asked the European Insurance and Occupational Pensions Authority (EIOPA<\/a>) to draw up proposals for the further development of existing Solvency II rules. In cooperation with the national supervisory authorities, EIOPA has established working groups to work through the topics listed in these calls for advice.<\/p>

The first wave of the Solvency II Review<\/h3>

Based on EIOPA’s initial technical recommendations in cooperation with the national supervisory authorities under the first wave of the Solvency II Review, on 18 June 2019 the European Commission published Delegated Regulation (EU) 2019\/981<\/a> amending Delegated Regulation (EU) 2015\/35<\/a>. The material changes focused on simplifying the standard formula that companies use to calculate their Solvency Capital Ratio (SCR). Inter alia, adaptations were made to non-life risk, the loss-mitigating effect of deferred taxes and in the capital requirements for low-risk bonds and loans, for which no rating is available.<\/p>

The second wave of the Solvency II Review<\/h3>

In February 2019, within the second wave of the Solvency II Review, the European Commission again requested EIOPA to provide further technical analysis about certain points of the Solvency II Directive (Directive 2009\/138\/EC<\/a>). EIOPA has been requested to also include an impact assessment of all relevant qualitative and quantitative impacts, both in relation to individual proposals as well as for a combination of all the proposals (holistic impact assessment). For this purpose, the national supervisory authorities are required to conduct numerous quantitative market analyses and also to involve the insurance industry in these.<\/p>

During the Solvency II Review, the FMA conducted several survey and market studies in the Austrian insurance sector.<\/p>

EIOPA presented the proposals for amending the regulations to the European Commission on 17 December 2020, that also contained additional background analyses and impact studies.<\/p>

The core of the analyses also addressed using measures in relation to long-term guarantees (LTG measures). Such measures are intended to “smoothen” the transition to the new capital regulations, or to absorb procyclical behaviour in crisis situations. This involves both the individually deployed LTG measures:<\/p>