Solvency II — three pillars, twenty-seven member states.
Directive 2009/138/EC, in force since 1 January 2016. The 2024 review (Directive (EU) 2025/2) brings in proportionality refinements, expanded macroprudential tools, and tighter group supervision. Insurers operating cross-border are running 27 different NCA expectations on top of one common rule book.
The three pillars
- Pillar I — quantitative requirements. Solvency Capital Requirement (SCR) and Minimum Capital Requirement (MCR). Standard formula or internal model. Technical provisions (best estimate plus risk margin). Own funds tiering.
- Pillar II — governance, risk management, ORSA. Article 41 system of governance; Article 44 risk management function; Article 45 own risk and solvency assessment. Forward-looking, board-owned, integrated into capital management.
- Pillar III — supervisory reporting and disclosure. Quantitative Reporting Templates (QRTs), Solvency and Financial Condition Report (SFCR), Regular Supervisory Report (RSR), Article 35 information.
ORSA in practice
The Article 45 ORSA is where the regulation meets day-to-day strategy. Three core questions every ORSA must answer:
- Overall solvency needs — over the planning horizon, considering specific risk profile, approved risk tolerance limits, business strategy.
- Continuous compliance with capital requirements and technical-provisions requirements.
- Significance of any deviation between the standard formula and the undertaking's actual risk profile.
The ORSA is one of the most-failed-audit Pillar II artefacts, usually because the link between strategic planning and capital sensitivities is thin or back-fitted.
Country-specific NCA expectations
Each NCA — BaFin, ACPR, IVASS, MFSA, FMA, and so on — publishes guidance, opinions, and supervisory expectations on top of the Directive and Delegated Regulations. The variance is real:
- BaFin — historically prescriptive on internal-model documentation; specific expectations on key-function reporting lines.
- ACPR — strong emphasis on risk-appetite cascading; specific guidance on Article 45 stress scenarios.
- IVASS — Italian-language reporting; specific national QRT add-ons.
- EIOPA — annual supervisory statements set the priorities all NCAs eventually operationalise (climate, cyber, IFRS 17 interaction, AI).
Solvency II ↔ IFRS 17
Two frameworks, one CFO. The technical-provisions calculation overlaps but doesn't equal the IFRS 17 measurement model. Map both to a shared product taxonomy and the implementation effort drops 30–40% versus running two parallel projects.
Where Sia RegAI fits
Sia RegAI ingests the Directive, the Delegated Regulation, the EIOPA Guidelines, and the NCA-specific guidance you point it at. The obligation tree is normalised across jurisdictions so a multi-country group sees one map of where requirements diverge. ORSA scenarios are drafted in your tone of voice; QRT mapping is automated against your risk-data warehouse.
Related guides
- ORSA in practice — automating Solvency II Pillar II
- Solvency II + IFRS 17 — two frameworks, one compliance workflow
- NAIC Model Laws — US insurance compliance for multi-state carriers