Our Guide to Solvency II features an in-depth look at the EU’s prudential regime for insurance and reinsurance undertakings.
Chapter 1: Own Funds
Our first chapter covers own funds, which constitute an insurer's regulatory capital.
Chapter 2: Reinsurance and Risk Transfer
Chapter 2 details the various components involved in the transfer of risk from an insurer to a reinsurer.
Chapter 3: Cross-Border Services and Overseas Branches
Chapter 3 discusses the provision of insurance and reinsurance from one jurisdiction into another, and the applicable regimes in place in the EEA and UK.
Chapter 4: Groups
Chapter 4 delivers a detailed analysis of the rules on insurance group supervision under the UK’s Solvency II. Topics include group types, applicable rules and considerations, solvency calculations and internal models.
Chapter 5: The Matching Adjustment
Chapter 5 of our guide delivers a detailed analysis of the rules on the matching adjustment under the UK’s Solvency II, which allow discounting of certain long-term liabilities at a higher rate in prescribed circumstances.
Chapter 6: Investment Rules
Chapter 6 of our guide delivers a detailed look at the investment rules that apply to Solvency II insurers and reinsurers in the United Kingdom.
Chapter 7: Technical Provisions
Chapter 7 of our guide answers questions that insurers may have and describes how technical provisions are determined, including what we can expect from the U.K.’s recent reforms.
Chapter 8: Capital Requirements
In this chapter, we examine the Solvency Capital Requirement under Solvency II, which is designed to ensure policyholders are properly covered by insurers during times of hardship, with a detailed focus on the standard formula method for the calculation.
Chapter 9: Internal Models
UK (re)insurers may apply to use a customised “internal model” to calculate their solvency capital requirement rather than the “standard formula” method, but PRA approval is required and internal models are costly to develop.
Chapter 10: Governance Models
In this chapter, we focus on governance requirements for (re)insurers under Solvency II and the UK’s SMCR, including the necessary components that each framework must integrate in order to be comprehensive and effective.
Chapter 11: The Valuation of Assets and Liabilities
This chapter discusses the valuation of assets and liabilities under Solvency II and examines the general principles applicable to valuation, the so called “valuation hierarchy,” the specific rules for certain balance sheet items and the interaction with international accounting standards.
Chapter 12: Undertakings in Difficulty
This chapter focuses on insurers that are either failing or likely to fail to meet their capital requirements under Solvency II. It also covers the regulatory framework that applies to such insurers and the consequences of noncompliance.
Chapter 13: Supervision
This chapter focuses on the Solvency II supervision framework and explains how it affects insurers and their policyholders.
Chapter 14: The SFCR and Other Public Reporting
This chapter examines the technical details of (re)insurers’ public reporting duties, including the Solvency and Financial Condition Report, and recent developments affecting those duties.
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The law in this publication is as stated as of 8 November 2024.
William Adams, Mary Bonsu, Tyron Kerns, Matheus Mora Machado, Verena Mengis, Imad Mohammed Nazar, Meher Pahuja and Ibrahim Raza contributed to this publication.