Solvency II in a nutshell

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By Tim Vandenabeele | 05 January 2014
This article provides an introduction to the new regulatory Framework Solvency II. After the introduction, the main drawbacks of the current Solvency I Framework are addressed in the second part. Third, the basic principles of the Solvency II Framework are explained. Next, the Lamfalussy process which was used for the setting up of the Solvency II Framework is discussed. Finally, the three main pillars of the Solvency II framework are broadly reviewed in the last part of the paper. The paper concludes that Solvency II is a useful new regulation for insurance undertakings as well as for National Supervisors, however requiring multiple implementation efforts from both sides. This article has been published in the November 2014 edition of “Bank- en Financiewezen” / “Revue bancaire et financière”.