The LMA Solvency II website is intended to complement the Lloyd’s Solvency II website by providing LMA members with easy access to key Solvency II information, identification of potential implementation issues and provision of related guidance for managing agents. Information which is already provided on the Lloyd’s Solvency II website is not repeated here.
Our principal aims are:
- to provide members with details of the work on Solvency II that is currently being carried out by the LMA; and
- to summarise the potential issues and related guidance for LMA members arising from the introduction of Solvency II
What is Solvency II?
Solvency II is a fundamental and wide-ranging review of the current EU insurance directives. Its aim is to establish a single risk-based framework for prudential supervision of insurers operating in the EU, thereby enhancing policyholder protection and increasing competition in the EU insurance market. Given the developments over recent years in risk management techniques, accounting standards, financial markets and the approach to prudential regulation, insurance regulators now want to develop a framework that brings regulatory capital requirements more closely into line with insurers’ actual risks and their own assessment of the capital they need given the nature of their business. Solvency II also aims to enhance the supervisory review process.
The Solvency II Framework (Level 1) Directive was adopted by the European Parliament on 22 April 2009 and endorsed by the Council of Ministers on 5 May 2009.
The final Directive text was adopted on 25 November 2009 after examination by the linguist jurist and published in the Official Journal of the European Union on 17 December 2009 (L335). The deadline for the implementation is 31 October 2012 and EU Member States are expected to amend their national law to comply with the Directive with effect from 1 November 2012.