Commission services publish Solvency study

  • Full text of the study
    PDF - 1900 KBEnglish
  • Annexes
    PDF - 395 KBEnglish

The Commission Services have published on 2 May 2002 a study into the methodologies to assess the overall financial position of an insurance undertaking from the perspective of prudential supervision. The study has been prepared by KPMG.

The current solvency requirements for insurance undertakings in the EU have worked well over the years and they have significantly increased the protection of policyholders in the European Union. Significant developments have, however, taken place in the insurance market as well as in supervisory practice since the rules were created and there is consequently a need to analyse whether the rules still serve their purpose.

In the beginning of 2000, the Commission Services together with Member States initiated a fundamental and wide-ranging review of the overall financial position of an insurance undertaking (the "Solvency 2" project). One of the objectives for the project is to establish a solvency system that is better matched to the true risks of an insurance company. A future solvency system in the EU should also not be overly prescriptive, avoid undue complexity, reflect market developments (such as derivatives and ART) and, where possible, be based on common accounting principles.

A wide-ranging and complex project as "Solvency 2" necessitates a very significant amount of background knowledge and updates on market developments. In order to facilitate the work, Internal Market DG commissioned a study on the subjects involved in the Solvency 2 project. The Commission Services believe that this study is of clear interest to supervisors, insurance industry, consultants and other parties. We are therefore pleased to make the study available for download at this website.

If you have comments on the study or the "Solvency 2" project, please contact us at:

Last update: 17.04.2012