Consultation on the implementation of the new proportionality framework under Solvency II

On 30 April 2024 the European Commission requested EIOPA’s technical advice on the implementation of the new proportionality framework under Solvency II.

In particular, in order to support the Commission to adopt Delegated Acts, EIOPA was requested to specify:

1. the methodology to be used when classifying undertakings/groups as small and non-complex, and
2. the conditions for granting or withdrawing supervisory approval for proportionality measures to be used by undertakings not classified as small and non-complex undertakings/groups

Following the recent review of the Solvency II Directive, the political agreement on the file has introduced amendments to the legislation to address concerns regarding the limited and inconsistent application of proportionality principles in the first years of Solvency II. The revised framework around proportionality sets clear criteria for identifying small and non-complex insurers in relation to the nature, scale and complexity of their risks and empowers supervisors to grant – and withdraw – similar concessions to other non-small insurers whose risk profile nevertheless justifies the use of some proportionality measures.