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Insurance and reinsurance



Directive 2009/138/EC on the taking-up and pursuit of the business of insurance and reinsurance (solvency II)


  • Known as solvency II, it requires insurance and reinsurance companies in the European Union (EU) to hold sufficient financial resources.
  • It also sets out governance, risk management, transparency and supervisory rules.



The directive covers non-life insurance, life insurance and reinsurance companies.


An insurance company can conduct its activities after having obtained an authorisation from the supervisor of its EU Member State. This authorisation is valid throughout the EU.

Capital requirements

Insurance companies have to hold capital in relation to their risk profiles to guarantee that they have sufficient financial resources to withstand financial difficulties. They have to comply with the following capital requirements.

  • The minimum capital requirement. The minimum level of capital below which policyholders would be exposed to a high level of risk.
  • The solvency capital requirement. The capital that an insurance company needs in cases where significant losses have to be absorbed. The amount of capital is calculated by taking into account different risks such as:
    • the market risk: the risk of loss or change of the financial situation resulting from market fluctuations;
    • the insurance or underwriting risk: the risk that not enough money was put aside to pay for future insurance claims or benefits;
    • the operational risk: the risk of loss arising from inadequate or failed internal processes, personnel or systems, or from external events.

If an insurance company does not meet either of the two required capital amounts, the supervisor has to take action.

Conditions governing insurance business

  • An adequate governance system. Insurance companies have to put in place an adequate and transparent governance system with a clear allocation of responsibilities. They must have the administrative capacity to deal with various issues including risk management, compliance with the legislation and internal audit.
  • Own risk and solvency assessment. Insurance companies have to conduct their own risk and solvency assessment on a regular basis. This involves assessing the overall solvency needs in relation to their risk profiles, along with their continuous compliance with the financial resources required.


  • Review by supervisors. The legislation sets out a supervisory review process that enables supervisors to review and evaluate insurance companies’ compliance with the rules. For that purpose, insurance companies need to report detailed information on their business and risks to supervisors. The aim is to help supervisors to identify companies that may experience difficulties. Insurance companies also have to disclose information publicly.
  • Group supervisor. Each group of insurance companies must have a group supervisor that has specific responsibilities in close cooperation with the national supervisors involved.

Amendments to Directive 2009/138/EC

Directive 2009/138/EC has been amended on several occasions.

  • To ensure fair competition between institutions, amending Directive (EU) 2016/2341 on the activities and supervision of institutions for occupational retirement provision (see summary) extends the transitional period allowing insurance undertakings subject to Directive 2009/138/EC to operate their occupational-retirement-provision business until 31 December 2022.
  • Regulation (EU) 2017/2402 on securitisation (see summary) amends Directive 2009/138/EC to ensure consistency with this regulation of rules related to securitisation, the main object of which is the establishment and functioning of the internal market, in particular by ensuring a level playing field in the internal market for all institutional investors.
  • Amending Directive (EU) 2018/843 requires insurance companies to report suspicions of money laundering or terrorist financing to the public authorities with a view to preventing the use of the financial system for these purposes under Directive (EU) 2015/849 (see summary).
  • Amending Directive (EU) 2019/2177 gives the European Insurance and Occupational Pensions Authority (EIOPA) a greater role in contributing to supervisory convergence in the area of internal models. It lays down stricter notification requirements in the case of significant cross-border insurance activity or in crisis situations, along with the conditions for establishing cooperation platforms* where the envisaged cross-border insurance activity is significant.
  • Amending Directive (EU) 2022/2556 aligns the provisions of the directive, and several other related directives, with the requirements on ICT risk for financial entities set out in the digital operational resilience of the financial sector (DORA) regulation, Regulation (EU) 2022/2254 (see summary).

Delegated and implementing acts

  • The solvency II directive confers on the European Commission the right to adopt delegated and implementing acts. These deal with matters such as technical standards and information for the calculation of technical provisions and basic own funds.
  • Delegated Regulation (EU) 2015/35 (which is known as the solvency II delegated regulation and has been amended on several occasions) sets out detailed requirements for applying the solvency II framework and serves as the single prudential rule book for insurance and reinsurance firms. The solvency II delegated regulation covers:
    • assets and liabilities valuation, including long-term guarantee measures;
    • how to set the level of required capital for asset classes an insurer may invest in;
    • the eligibility of insurers’ own fund items to cover capital requirements;
    • how insurance companies should be managed and governed;
    • assessing the equivalence of non-EU countries’ solvency regimes with EU rules;
    • rules on the use of internal models to calculate the solvency capital requirement;
    • specific rules related to insurance groups; and
    • simplified methods and exemptions to make solvency II easier to apply for smaller and less complex insurers.


Directive 2009/138/EC had to be transposed into national law by 31 March 2015. These rules have applied since 1 January 2016.


For further information, see:


Cooperation platform. Such a platform is set up when EIOPA and the relevant national supervisory authorities see the merit in strengthening cooperation in the event of material cross-border business to enable a sound internal market in the EU. The platforms allow home supervisors to make use of host supervisors’ expertise and knowledge about local market specificities.


Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (recast) (OJ L 335, 17.12.2009, pp. 1–155).

Successive amendments and corrections to Directive 2009/138/EC have been incorporated into the basic text. This consolidated version is for reference purposes only.


Regulation (EU) 2022/2554 of the European Parliament and of the Council of 14 December 2022 on digital operational resilience for the financial sector and amending Regulations (EC) No 1060/2009, (EU) No 648/2012, (EU) No 600/2014, (EU) No 909/2014 and (EU) 2016/1011 (OJ L 333, 27.12.2022, pp. 1–79).

Directive (EU) 2022/2556 of the European Parliament and of the Council of 14 December 2022 amending Directives 2009/65/EC, 2009/138/EC, 2011/61/EU, 2013/36/EU, 2014/59/EU, 2014/65/EU, (EU) 2015/2366 and (EU) 2016/2341 as regards digital operational resilience for the financial sector (OJ L 333, 27.12.2022, pp. 153–163).

Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (OJ L 141, 5.6.2015, pp. 73–117).

See consolidated version.

Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 12, 17.1.2015, pp. 1–797).

See consolidated version.

last update 20.06.2023