Solvency II began applying to European Union insurers on 1 January 2016.
The framework is a major EU regulatory regime for insurance and reinsurance companies. It is designed around risk-based supervision, meaning capital requirements should reflect the risks an insurer actually takes rather than relying only on fixed formulas.
Solvency II is commonly described through three pillars. The first concerns quantitative capital requirements and technical provisions. The second covers governance, risk management, and supervisory review. The third focuses on reporting and public disclosure.
The framework replaced the earlier Solvency I regime and was intended to create a more consistent supervisory system across the European Economic Area. Brexit later affected how the rules applied in the United Kingdom, where an adapted domestic regime developed after the country left the EU.