Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • Sections
  • News

Solvency II rules amended to slash insurers’ capital requirements

Open-access content CHRIS SEEKINGS — Wednesday 13th March 2019 — updated 3.23pm, Tuesday 5th May 2020

The European Commission has slashed capital requirements for insurers investing in equity and private debt after amending key Solvency II rules.

web_EU_iStock.jpeg

It is hoped that the changes will help mobilise private sector investment – a key objective of the Capital Markets Union, which aims to further integrate EU markets.

“Insurers were highlighting that Solvency II rules were preventing them from investing more in equity and private debt,” Commission vice-president, Valdis Dombrovskis, said.

“We have listened to their concerns. The amendments will make it easier and more attractive for them to invest in SMEs and provide long-term funding to the economy".

The changes, introduced through a Delegated Act, will simplify calculations for capital requirements and improve alignment between the insurance and banking prudential legislations.

They also update principles and standard parameters to better reflect developments in risk management and data, including treatment of financial hedging strategies.

The amendments are based on advice from the European Insurance and Occupation Pensions Authority, and will now be subject to a three-month scrutiny period.

However, Insurance Europe described the changes as a “missed opportunity”, highlighting how Solvency II’s risk margin still adds an unnecessary €200bn (£172bn) to capital requirements.

The federation also pointed to evidence that the volatility adjustment – designed to reduce artificial volatility for long-term business – does not work as intended.

Deputy director general, Olav Jones, acknowledged that some important improvements had been made, but said these are outweighed by a lack of progress on other issues.

“The next review, to be completed by the end of 2020, needs to be much more ambitious in terms of identifying and prioritising improvements to Solvency II,” he continued. 

“It will have a direct impact on what the insurance industry can provide for customers, as well as its ability to support the Commission’s long-term goals of growth and investment for Europe.” 

Image credit | iStock
 

You may also be interested in...

web_hiring_iStock-862718314.png

‘Fundamentally flawed’ hiring process for actuarial consultants uncovered

Life insurers are failing to find value for money in actuarial consultants due to “intrinsic weaknesses” in the hiring process, a survey by Barnett Waddingham has uncovered.
Wednesday 27th March 2019
Open-access content
web_clockhead_iStock-647004812.png

‘Lost decade’ of life expectancy improvements uncovered

Life expectancy assumptions in the UK will be back to the same levels last seen in 2009 by the end of this year, research by professional services firm KPMG has uncovered.
Wednesday 15th May 2019
Open-access content
Web_istock .jpg

IFRS 17 amendments a ‘wake-up call’ for insurers

Recent amendments to IFRS 17 have given a complete picture of what the final accounting standard will look like and should be a “wake-up call” for insurers.
Monday 8th July 2019
Open-access content
web_transaction_iStock-615726896.png

UK's bulk annuity market to return to ‘normal’ levels in 2020

The UK’s bulk annuity market will return to ‘normal’ levels this year, with £30bn of deals likely over the next 12 months, Willis Towers Watson (WTW) has predicted.
Thursday 2nd January 2020
Open-access content
2

China opens up to foreign life insurers

The China Banking and Insurance Regulatory Commission (CBIRC) has this year increased the country’s foreign ownership limit for life insurers from 51% to 100%.
Wednesday 8th January 2020
Open-access content
2

WEF publishes top global risks for 2020

The top five long-term risks facing countries over the next decade are all linked to the environment, the World Economic Forum (WEF) has warned today.
Wednesday 15th January 2020
Open-access content
Filed in
News
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Reserving Analyst

London (City of)
Negotiable
Reference
149485

Senior GI Modeler - Capital and Planning

London (Central)
£ excellent
Reference
149436

Risk Oversight Manager

Flexible / hybrid with a minimum of 2 days per week office-based
£ excellent
Reference
149435
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ