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Solvency II

26 March 2009, 22:46 CET
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The solvency margin is the amount of regulatory capital an insurance undertaking is obliged to hold against unforeseen events. Solvency margin requirements have been in place since the 1970s and it was acknowledged in the EU's third generation Insurance Directives adopted in the 1990s that the EU solvency rules should be reviewed. The Directives required the European Commission to conduct a review of the solvency requirements and following this review, a limited reform was agreed by the European Parliament and the Council in 2002. This reform is known as Solvency I. Solvency II: it became clear during the Solvency I process that a more fundamental and wider ranging review of the overall financial position of an insurance undertaking was required. Looking at the overall financial position of an insurance undertaking and taking into account current developments in insurance, risk management, finance techniques, international financial reporting and prudential standards, etc.

The link address is: http://ec.europa.eu/internal_market/insurance/solvency/index_en.htm

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