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GLOSSARY

Solvency II definition

Published by a LexisNexis EU Law expert

What does Solvency II mean?

Solvency II is an EU legislation governing the capital adequacy regime for the European insurance industry. It establishes a set of EU-wide capital requirements and risk management standards.

The Solvency II regime was introduced by Directive 2009/138/EC. It codifies and harmonizes the EU-wide rules for insurances and reassurances and regulates the amount of capital EU insurance companies must hold to reduce the risk of insolvency. It also installs requirements on governance and risk management, the effective supervision of insurers and disclosure and transparency.

Pensions

EU Directive 2009/138/EC requiring insurance companies to have adequate reserves, whose provisions some EU member states wish to extend to pension schemes.

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