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Impact assessment (SWD(2021) 260, SWD(2021) 261(summary) accompanying two Commission proposals: a directive amending Directive 2009/138/EC as regards proportionality, quality of supervision, reporting, long-term guarantee measures, macro-prudential tools, sustainability risks, group and cross-border supervision (COM(2021) 581) and a directive establishing a framework for the recovery and resolution of insurance and reinsurance undertakings (COM(2021) 582) and amending Directives 2002/47/EC, 2004/25/EC, 2009/138/EC, (EU) 2017/1132 and Regulations (EU) No 1094/2010 and (EU) No 648/2012
The revision of prudential rules for insurance and reinsurance (i.e.
insurance for insurance companies)1 companies, known as 'Solvency II', is included in the 2021
Commission work programme as well as in the Joint Declaration on EU legislative priorities for 2021.
The Solvency II Directive has applied since 2016 and replaced 14 directives commonly referred to as
'Solvency I'. With the supplementing delegated and implementing acts, it forms a harmonised
prudential framework for insurance firms in the EU, known as the 'Solvency II' regime. Solvency II
constitutes a three-pillar framework2 for insurance and reinsurance undertakings to conduct
insurance business throughout the internal market.
The Commission proposes to amend the existing Solvency II framework and to introduce new
elements, especially on environmental risks, resolution and macro-prudential tools3. The Solvency II
review was presented with a communication, as a package of two legislative proposals:
a proposal to amend the Solvency II Directive (Solvency II), aiming at strengthening
insurance companies' contribution to the financing of EU's post pandemic recovery;
a proposal for a new insurance recovery and resolution directive (IRRD), to ensure
insurers and EU authorities are better prepared to address severe financial distress.
The amendments to the Solvency II Directive and IRRD will be supplemented by d elegated and
implementing acts at a later stage.
The key role of the insurers' contribution to the 're-equitisation'4 and the greening of the European
economy, had already been underlined in the new capital markets union (CMU) action plan and the
communication on the European Green Deal. The European Parliament and the European Council
also identified the Solvency II review as a pivotal initiative supporting the objectives of the CMU, by
strengthening the role of insurers as long-term investors and encouraging long-term investmen