Three-pillar structure to be applied to EU insurance regulation

Solvency II has been drawn up by the European Commission after a consultation with Member States, regulating the life, non-life and reinsurance business. The Commission has proposed that a Basel II-type three-pillar structure should be adapted for regulating insurance firms:• Pillar 1 Minimum Capital Requirements Harmonised standards for the valuation of assets and liabilities, and the calculation of capital requirements.• Pillar 2 Supervisory Review Process To help ensure insure