The European Commission has submitted a proposal for a complete revision of the Solvency II [4] rules governing insurance in the EU. The changes aim to improve capital requirements. Simplified and more proportionate laws are also proposed for small Insurance Companies.
The draft is divided into three parts:
- a legislative proposal to amend the Solvency II Directive
- a communication on the revision of the Solvency II Directive
- a legislative proposal for a new directive on the recovery and resolution of insurance and reinsurance companies
The aim of the reform is to:
- better protect the insured and the customers.
- strengthen the resilience of the sector in the face of possible crises
- strengthen the contribution of European insurers to the financing of the post-Covid-19 economic recovery
- direct funds towards the green economy
Through this initiative, Brussels is encouraging the market stakeholders to release up to 120 billion EUR (140.648 billion USD) of capital, 90 billion EUR (105.486 billion USD) of which is short-term and 30 billion EUR (35.162 billion USD) long-term. This sum helps insurers and reinsurers, the main private investors in Europe, to better support the recovery of the European economy.
The draft will be examined by the European Parliament and the EU Member States.