On the 10th October 2014, the Commission has adopted an act containing the implementing rules for Solvency II, which will enter into force once they are approved by both the European Parliament and the Council.
Solvency II takes into account the current developments in insurance, risk management, finance techniques and changes in IFRS rules. It also aims to streamline the way that insurance groups are supervised and recognises the economic reality of how groups operate.
The implementing rules cover several important aspects, including the valuation of assets and liabilities, the eligibility of insurers' own fund items to cover capital requirements, management and governance of insurance companies and rules relating to insurance groups.
Of particular interest are the provisions including simplified methods and exemptions, which have the effect of making Solvency II more approachable for smaller insurers in particular.