Solvency II review

The IA covers two Commission proposals representing the biggest amendment to date of the Solvency II framework, which came into force in the EU in 2016. Important parts of the framework laid down in delegated and implementing acts will be updated by the Commission at a later stage. This IA builds on a broad consultation of stakeholders, and on extensive advice from the European Insurance and Occupational Pensions Authority (EIOPA). In addition to various reports from EIOPA including a holistic IA, the IA draws on a technical report from the JRC and an external study, which are adequately referenced and publicly accessible. The objectives are directly linked to the problems identified in the IA and their consequences. The Solvency II review aims to increase policyholders' protection as well as the insurers' contribution to the long-term green financing of the economy, to contribute to financial stability, and to preserve the international competitiveness of the EU insurance industry. The preferred options are in line with EIOPA's advice, except for the policy dimension related to proportionality, where the IA explains why the preferred option deviates from EIOPA's recommendation. The IA shows how the combination of preferred options is expected to contribute to the achievement of the objectives identified. The IA assesses and compares the potential impacts of the options presented to achieve these objectives in a systematic way. In addition, the IA describes the potential positive impact of the preferred options on SMEs. The IA also explains how the proposed Solvency II review is expected to improve proportionality and to simplify the regulatory framework. The IA mainly focuses on the economic impacts of the initiative. The main social impact assessed by the IA concerns the expected improvement of policyholder protection. Potential environmental impacts relating to enhanced green financing, could have been more clearly addressed in the IA.