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ARTICLE · 12 MAY 2015

Solvency II - Aligning Risk And Capital Management

Dillon Eustace
Dillon Eustace
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The new rules will introduce a two tier capital requirement for (re)insurance undertakings which seek to ensure the financial soundness of undertakings and to protect policyholders.

IrelandInsurance
Dillon Eustace
Dillon Eustace
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Solvency II will introduce economic risk-based solvency requirements for (re)insurance undertakings which will ensure that risk is measured on consistent principles and that capital requirements are aligned with the underlying risks of the undertaking concerned.

The new rules will introduce a two tier capital requirement for (re)insurance undertakings which seek to ensure the financial soundness of undertakings and to protect policyholders.

The rationale behind the introduction of this two tier capital requirement is to provide supervisory authorities with a so called "supervisory ladder of intervention" which will enable regulators to act in a timely, pre-emptive and effective manner to ensure the continued financial soundness of a (re)insurance undertaking.

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