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Solvency II becomes a more comprehensive risk and capital framework for insurers as it is known from the past. Its entry into force, scheduled for January 1st 2014, is a revolution by moving to an economic vision on the capital requirement. Its innovative character is also expressed by its three-pillar structure with quantitative and qualitative as well as enhanced disclosure requirements. Solvency is no more a simple matter of own funds, but a genuine process of empowerment in which the insurer must control its activity thru an appropriate management and monitoring system.
Unfortunately, most of the attention has been to focus on the first pillar, especially thru the various Quantitative Impact Surveys (QIS). However, it becomes crucial not to forget the second...
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