Regulation
Solvency II — Prudential framework for insurers
The EU's comprehensive capital and risk management framework for insurance and reinsurance undertakings. The Solvency II review is reshaping requirements — with significant implications for Dutch insurers.
What is Solvency II?
Solvency II (Directive 2009/138/EC) is the EU's risk-based prudential framework for insurance and reinsurance undertakings. It replaced the previous Solvency I regime and introduced a three-pillar structure: quantitative requirements (Pillar 1), governance and risk management (Pillar 2) and reporting and disclosure (Pillar 3).
The Solvency II review — adopted in 2023 — introduces material changes to long-term guarantee measures, proportionality provisions, sustainability risk integration and macro-prudential tools. Implementation is ongoing.
Who is affected?
| Entity type | Applies |
|---|---|
| Insurance undertakings (life and non-life) | Yes — full Solvency II |
| Reinsurance undertakings | Yes — full Solvency II |
| Captive insurers/reinsurers | Yes — proportionality provisions may apply |
| Small insurers (below thresholds) | IRRD applies (simpler regime) |
| Pension funds (IORPs) | No — IORP II applies |
Key pillars
Pillar 1 — Quantitative requirements
Solvency Capital Requirement (SCR), Minimum Capital Requirement (MCR), technical provisions and eligible own funds. The review adjusts the long-term guarantee package and introduces changes to the extrapolation methodology for interest rates.
Pillar 2 — Governance and risk management
ORSA (Own Risk and Solvency Assessment), system of governance, fit and proper requirements, risk management function and internal controls. The review strengthens sustainability risk integration into the ORSA and governance frameworks.
Pillar 3 — Reporting and disclosure
SFCR (Solvency and Financial Condition Report), RSR (Regular Supervisory Report) and quantitative reporting templates. The review simplifies and streamlines some reporting requirements under proportionality.
How Arcens helps
Horizon scanning: We monitor EIOPA guidance, DNB circulars and Solvency II review implementation measures — translating regulatory change into impact assessments for your organisation.
NFR management: We help design and review ORSA frameworks, governance structures and risk management functions aligned to Pillar 2 requirements.
Remediation: DNB findings on Solvency II governance and ORSA quality are increasingly common. We manage remediation from root cause to closed file.
Quick facts
Full name: Directive 2009/138/EC
In force: January 2016
Supervisor (NL): DNB
Review: Adopted 2023, ongoing implementation
Ask our advisor about Solvency II
Get answers on ORSA requirements, Solvency II review implications or how the sustainability risk requirements affect your governance framework.