Our glossary explains technical terms from the areas finance and reinsurance. We hope it facilitates the understanding of our texts, publications and annual reports. If you have comments or suggestions, please use our feedback form!
Solvency II is a Directive in European Union law that defines solvency requirements for insurers and reinsurers with a view to reducing the risk of an insurer being unable to meet claims. Risk-based capital is at the core of Solvency II. A three-pillar approach is adopted: Pillar 1 covers the risk-based capital requirements, the rules used to calculate technical provisions and the verification of calculation models. Pillar 2 of Solvency II sets out, on the one hand, the supervisory principles and methods and, on the other hand, the qualitative requirements for conduct of an insurer's operations in terms of governance and risk management. Pillar 3 deals with market discipline, transparency and disclosure requirements as well as supervisory reporting.