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SOLVENCY II DELEGATED ACT OFFICIALLY PUBLISHED

On 17 January 2015 Solvency II Delegated Act (officially Commission Delegated Regulation (EU) 2015/35) entered into force as it was officially published in the Official Journal of the EU. Level 2 document (797 pages in total: 226 pages of main text, 571 pages belong to annexes) further develops some issues from the Solvency II Framework Directive.

Commission Delegated Regulation (main text) is divided into three basic parts (titles) as follows:


Title I – Valuation and risk-based capital requirements (Pillar I), enhanced governance (Pillar II) and increased transparency (Pillar III)
It consists of the following chapters:

  1. General provisions
  2. Valuation of assets and liabilities
  3. Rules relating to technical provisions
  4. Own funds
  5. Solvency capital requirement standard formula
  6. Solvency capital requirement — full and partial internal models
  7. Minimum capital requirement
  8. Investments in securitisation positions
  9. System of governance
  10. Capital add-on
  11. Extension of the recovery period
  12. Public disclosure
  13. Regular supervisory reporting
  14. Transparency and accountability of supervisory authorities
  15. Special purpose vehicles

Title II – Insurance groups
It consists of the following chapters:

  1. Solvency calculation at group level
  2. Internal models for the calculation of the consolidated group solvency capital requirement
  3. Supervision of group solvency for groups with centralised risk management
  4. Coordination of group supervision
  5. Public disclosure
  6. Group supervisory reporting

Title III – Third country equivalence and final provisions
It consists of the following chapters:

  1. Undertakings carrying out reinsurance activities with their head office in a third country
  2. Related third country insurance and reinsurance undertakings
  3. Insurance and reinsurance undertakings with the parent undertakings outside the union
  4. Final provisions

Main text of this regulation is followed by the annexes that include (not-exhaustive list):

  • List of lines of businesses
  • Segmentation and parameters (including correlation coefficients) for the purposes of the calculation of the capital requirement for the non-life premium and reserve risk
  • Calculation of the factor for geographical diversification
  • Parameters (including correlation coefficients) and geographical division of regions into risk zones for the purposes of the calculation of the capital requirement for the natural catastrophe risk
  • Method-specific data requirements and method specifications for USPs of the standard formula
  • Integration techniques for partial internal models
  • Structure of the Solvency and Financial Condition Report and Regular Supervisory Report

For additional information about Level 2 document refer to the official website of the Commission where you can find full text of the regulation, impact assessment (which concentrates on capital requirements and other measures relating to long term investments, requirements on the composition of insurers' own funds, remuneration issues, requirements for valuation of assets and liabilities, and reporting) and Frequently Asked Questions.

   
 
   
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