History
Premises
The solvency requirements were intoduced in the seventies, then they were subsequently revised and updated as part of the "Solvency I". Solvency II project is its continuation.
The existing solvency margin requirements were introduced in 1973 and identified by the First Wealth Directive (73/239/EEC) and in 1979 by the First Life Directive (79/267/EEC). The third generation of Insurance Directives concerning life (92/96/EEC) and property (92/49/EEC) established one insurance market in the mid-nineties. Thanks to this, within the European Union territory was established one of the most competitive insurance markets in the world. Insurers, acting under the regulations obtained in any member country, are currently entitled to conduct business throughout the European Union, without any price control, or notice of the conditions (except for compulsory insurance). This system is based on mutual recognition of supervision completed by different national authorities to the necessary extent at EU level according to standardized rules. Requiring the insurers to agree on an appropriate margin of solvency is one of the most important principles, so called the prudential rule.
Insurers are facing many challenges associated with the introduction of Solvency II. However, these efforts will make huge improvements to the insurance industry.
Since 2007, insurance companies have been obliged to introduce gradually some new solvency requirements, and as of 2012, Solvency II will be in its full force and effect.
The Solvency Programme
"Ever since the foundation of Solvency I, through its development until the Solvency II...”
Preparation for Solvency II started in 2002. In July 2007, Framework Directive on Solvency II became to be available for discussion in the European Parliament and the European Council.
In accordance with the following diagrams the scope of work was divided into blocks:
Level 1 - relates to work on the text of the directive.
Level 2 - relates to work on the process of implementing measures of the SCR, MCR, and the process of calibration
Level 3 - relates to work on the standards of Insurance Supervision.
The attached document below will enable you to read the project carefully. This text discusses, among others:
- objectives of Solvency II,
- plans for its implementation,
- comparison to the previously existing Solvency I.
Reading the document requests to move using links provided in the titles on the first page and the links located in the lower right corner of each slide.