Solvency II Reform: Key Changes

The Solvency II Directive 2009/138/EC (Solvency II) established a harmonised risk-based prudential framework for (re)insurers in the European Union.

More than a decade after its implementation, this framework has been subject to a comprehensive review by the European Parliament and Council, culminating in Directive EU 2025/2 (Amending Directive).

The reforms represent an important evolution of the Solvency II framework. While preserving policyholder protection and financial stability as core objectives, the changes in the Amending Directive move the regime away from a broadly uniform, capital-centric approach towards a more proportionate and risk-sensitive framework. In particular, the changes seek to better reflect the differing nature, scale and complexity of insurers’ business models and reduce any unnecessary regulatory burden for smaller and less complex undertakings. They also better recognise the long-term nature of many insurance liabilities and investment strategies.