Solvency II – the progress so far
The 14 directives that make up the package that is Solvency I are comprehensively out of date in terms of capital adequacy and risk. Regulators began work on the new Solvency II framework in 2002, structured around a risk-based system that applies capital requirements to measurements of assets and liabilities.
Solvency II aims to correct Solvency I’s inability to cope with complex insurance portfolios, offer policy holders greater protection and elevate the standard of risk management in the industry.
Regulators are currently awaiting results from Quantitative Impact Study II (QIS2), the results of which will be published in October of this year. Regulators hope that the study will highlight potential problems, as well as provide evidence that the end goals of transparency and convergence can be met
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