The Solvency II is an EU legislative programme that codifies and harmonizes the EU insurance regulation. Primarily this concerns the amount of capital that EU insurance companies must hold to reduce the risk of insolvency.
The key objectives of Solvency II are as follows:
Figure 1: The three pillars of Solvency II.
Solvency II is more than just about capital. The framework has three main pillars. The first pillar is mainly about the amount of capital an insurer should hold. The second pillar sets out requirements for the governance and risk management of insurers, as well as for the effective supervision of insurers. The third pillar focuses on disclosure and transparency requirements.
RISKID forms the total risk management solution to fulfill the requirements depicted in pillar 2:
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