Implementation of Solvency II and its potential impact on market of insurance companies

The ambition of this article is to demonstrate positives, but also the fall back of the Solvency II and of the delayed and uncoordinated implementation among the national regulators. This article summarizes the trends in insurance market regulation following the introduction and consequent implementation of the Solvency II as a new regulatory framework for the insurance companies. Solvency II represents a critical step in terms of tightening of the regulatory framework for the insurance providers, especially by setting stricter rules for reporting and capital adequacy. On the other hand, Solvency II represent a major risk of increased costs related to implementation of the Solvency II principles in day to day business reporting of the insurance companies potentially harming status quo of the insurance market as the costs related to implementation of Solvency II and their reporting to national regulators.