Solvency II: step-by-step

If 370 pages of the Solvency II framework directive look like a daunting read, Elizabeth Abraham of PricewaterhouseCoopers offers a headstart with a detailed introduction to the proposals which are expected to transform insurance regulation in Europe.

Elizabeth Abraham is a senior manager in the financial services regulatory practice at PricewaterhouseCoopers LLP. Elizabeth has been focusing on regulatory aspects of prudential regulation in the UK, providing advice to clients on the product and structural impact of prudential regulatory requirements and developments.

The 10 July 2007 marked a watershed date in the European insurance regulatory arena, with the publication by the European Commission of the long awaited Solvency II framework Directive (“Directive”). Not only does Solvency II introduce an entirely new, harmonised EU-wide solvency regime, it also updates and recasts some 13 EU insurance Directives, setting out the regulation of life insurance, non-life insurance, reinsurance, insurance groups and the winding-up of insurance entities. Expected to be adopted by the European Parliament in 2009/2010, entities would have to implement it no later than 31 October 2012.