This is a comprehensive amendment to the Solvency II Directive (2009/138/EC) that introduces significant changes to the insurance regulatory framework in the EU. Here are the key aspects:1. The Directive aims to improve risk-based and harmonized prudential rules for the insurance and reinsurance sector, addressing weaknesses identified in the previous framework while maintaining its core principles.2. Key structural changes include:- New proportionality measures for small and non-complex insurers- Enhanced supervisory cooperation and information exchange requirements- New macroprudential tools and powers for supervisors- Strengthened group supervision requirements- Updated reporting and disclosure requirements- New requirements related to sustainability risks- Changes to technical provisions calculation and capital requirements3. The most important provisions include:- Introduction of specific criteria to identify small and non-complex insurers/groups- New powers for supervisors to address liquidity risks and preserve financial stability- Enhanced cross-border supervision and cooperation between authorities- Strengthened fit and proper requirements for management- New requirements for climate change scenario analysis- Changes to the volatility adjustment and matching adjustment frameworks- Updated group solvency calculation methods- New disclosure requirements including audit of the Solvency II balance sheetThe Directive has particular implications for Ukraine and Ukrainian insurers as it sets standards that would need to be met for Ukrainian insurance companies operating in or seeking to enter the EU market, especially in the context of Ukraine’s EU accession process and alignment with EU financial services legislation.
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