EU Legislation Solvency II

The legal framework for the insurance sector is primarily based on EU legislation.

The tools used by the European Union have different features according to whether they are binding or non-binding and to how they are applied in the Member States: Regulations, Directives, Decisions, Recommendations and Opinions (pursuant to article 288 of the Treaty on the Functioning of the European Union).

The regulatory and implementing technical standards (RTS and ITS), drafted by EIOPA (European Insurance and Occupational Pensions Authority) and adopted by the European Commission with Regulation, are of growing relevance in the insurance framework. They are aimed to harmonize more complex and specific aspects of the market regulatory system so as to make it more comprehensive, homogeneous and unified.

Therefore the Solvency II European framework is made up in particular of:

• the framework directive and its modifications and integrations laying down the basic principles of the solvency regime (Solvency II);
• the Delegated Regulations or the Regulatory Technical Standards (RTS), laying down more specific rules, directly applicable in the EU Member States, of the new solvency regime;
• the Implementing Regulations (Implementing Technical Standards – ITS) also directly applicable in the EU Member States which specify the details and technical aspects of higher level provisions;
• the EU Commission delegated Decisions which set out the Commission's position on specific issues relating to Solvency II;
• the EIOPA guidelines laying down provisions with a higher level of detail aimed to convergence in the application of the Solvency II principles and provisions and in supervisory approaches.

Each of the above five categories identifies a specific subsection of the EU legislation.