Rising to the challenge of Solvency II

Few new regulations are expected for financial services over the next few years, but the European Commission has some unfinished business, namely Solvency II for insurance. The detail of Solvency II has yet to be decided but its importance is far too significant to ignore. Speaking at an industry event organised by the CEA, Elemér Terták, director of financial institutions at the European Commission, gave an insight into the EC’s thinking on Solvency II, including how it will fit with IFRS for insurance, and urged companies to take part in its development.

What are the main challenges which need to be addressed within the Solvency II project? For the Commission the challenge is to deliver high quality regulation which suits markets needs. For this reason the Lamfalussy-approach has been developed in order to take account of the need for flexible legislation. As the core of the financial services directives and especially the Solvency II directive will be based on that structure the Commission’s task is to ensure that this system and its outcome achieve the best results possible.