European regulations for solvency requirements for (re)insurers. Solvency II aims to promote an internal European market for insurance services and provide sufficient consumer protection. The starting point is an economic-risk-based approach, in which all assets and liabilities are valued at market value. In addition, the starting point is the link between the solvency requirements and the risk profile of insurers. Solvency II is the name for the statutory regulations that are imposed on insurers by the supervising body. These regulations involve:
- quantitative requirements for capital buffers and the valuation principles.
- requirements for the setup of risk management and governance
- the performance of an ORSA (Own Risk Solvency Assessment).
- the establishment of a report (SFCR) and publication of this report in the framework of transparency.