Proportionality on Paper
Proportionality has always been part of the Solvency II
framework, at least on paper. When the Solvency II Directive
2009/138/EC was introduced in 2016, the principle was clearly
embedded both in the recitals and in the operative provisions of
the Directive.
Recital 19 makes this explicit: the framework should not be too
burdensome for small and medium-sized undertakings, and
proportionality should apply both to regulatory requirements and to
supervisory powers. Recital 21 further recognises the specific
nature of captives, calling for approaches that reflect the nature,
scale and complexity of their business. This is reinforced in the
core provisions, including Article 29, which requires Member States
to apply requirements in a proportionate manner, and Article 41(2),
which links governance systems directly to the nature, scale and
complexity of operations.
