Solvency II - enabling transformation through regulation

Solvency II legislation was initiated in 2000 by the EC to implement a fundamental change to the current European insurance solvency framework and has evolved from the Basel II three pillar approach to banking regulation. Solvency II will produce a more consistent solvency standard for insurers across Europe, ensuring that capital requirements are more reflective of the risks being accepted. The date for the legislation to come into effect has been set at 31 October 2012. Whilst this may seem a distant horizon, interim progress milestones are fast approaching in 2010 and 2011. IBM advises that each insurer should decide now what Solvency II means for them. This paper outlines the key decisions that IBM recommends need to be made now to design the appropriate Solvency II programme.