The Solvency II project has the wide and ambitious scope to build a new comprehensive framework for the insurance supervision. Following Basel II, it proposes a similar structure. It is essentially a European initiative and will be the first Lamfalussy Directive in Insurance. Solvency II is an opportunity not to be missed for an improvement of European leadership in insurance regulation. Altogether, it is a timely initiative to improve and streamline European insurance regulation.

Solvency II has five objectives:

1. to review the current insurance directives.
2. to review the overall financial position of insurance not just limited to the Solvency margin requirement.
3. to protect policyholders in all EU members States.
4. to take account of recent developments in insurance activities, risk management, financial methods and reporting, etc.
5. to increase the supervisory process and to review the level of harmonization including supervisory powers and methods.