Solvency II

The impact of Solvency II for the insurance sector is huge "Solvency II is not just about capital, it is a change of behaviour". AT Global is here to guide you in this process.

Solvency II, the new solvency regime that will become applicable to EU insurance companies as from the end of 2012, lies at the forefront of the international legislative developments concerning the solvency of insurance companies.

Its impact will be huge and as stated by the management of CEIOPS (the Committee of European Insurance and Occupational Pensions Supervisors, now EIOPA - the European Insurance and Occupational Pensions Authority), one of the key player for the development of the new regime: "Solvency II is not just about capital, it is a change of behaviour".

Through the regime applicable to insurance groups, the consequences of Solvency II will also be felt outside of the borders of the European Economic Area.

The three pillars of Solvency II

The new regime introduced by Solvency II is organised around 3 pillars:

• Pillar 1 "quantitative requirements"
  defines the capital requirements, the own funds eligible for coverage and investments requirements based on the prudent person principle, rather than on quantitative limits
• Pillar 2 "qualitative requirements"
  promotes internal control, risk management and corporate governance
• Pillar 3 "information and reporting"
  defines the supervisory reporting, the public disclosures and aims at improving the strength of the insurance companies through market discipline.