The Irish Government has now transposed into Irish law the Solvency II Directive (Directive 2009/138/EC) as amended by the Omnibus II Directive (Directive 2014/51/EC) which will become effective across all EU Member States from 1 January 2016.
In Ireland, the Solvency II regime has been given legal effect by secondary legislation in the form of Statutory Instrument namely, the European Communities (Insurance and Reinsurance) Regulations 2015 (the "2015 Regulations").
The 2015 Regulations introduce a new prudential regulatory framework which reforms European insurance legislation affecting life, non-life and reinsurance undertakings.
The 2015 Regulations will also be supplemented by more detailed technical Commission Level 2 measures and they in turn will be supplemented by Level 3 guidance for national supervisors developed and adopted by the European Insurance and Occupational Pensions Authority (EIOPA).
A New Prudential Supervisory Approach
As the implementation date of 1 January 2016 for Solvency II draws closer, reinsurance and insurance undertakings in Ireland are well under way with their Solvency II implementation programmes.
Solvency II is built on a three pillar structure which seeks to ensure that insurance and reinsurance undertakings:
hold adequate financial resources (Pillar 1); maintain effective governance (Pillar 2); and increase market discipline through disclosure requirements (Pillar 3). Significantly, Solvency II will introduce...