Politics and opinions

Solvency II

The purpose of Solvency II is to provide safety for insurance and pension customers

Related to: Politics
Published 13.09.2023

Since the 1st of January 2016, European insurance companies have been regulated by a Solvency II. The regulation aim to ensure that insurance and pension customers throughout the EU have the same consumer protection, regardless of where they buy insurance or have their pension savings.

Danish companies are among the most well-heeled in the EU. In 2021, Danish companies had 2.5 times as much capital as is required.

The industry must be able to create growth in society

F&P - Insurance & Pension Denmark supports the Solvency II rules, as they ensure security for insurance and pension customers. However, it is also important that the rules do not become so tight that they limit the companies' ability to invest and contribute to growth in society and to Danes' pensions.

Since 2019, the EU Commission has been working on a planned '2020 review' of the solvency rules. A review that Insurance & Pension Denmark clearly supports, as it helps to ensure that the principles of Solvency II are maintained and that they continue to be appropriate and up-to-date.

Insurance & Pension Denmark has several position papers and contributed to consultation responses via Insurance Europe. And the industry's arguments have been heard by Danish and other European politicians, so the advice from the European supervisory authority, EIOPA, has been softened so it doesn’t limit the economic growth in Denmark.

Insurance & Pension Denmark's focus areas in the 2020 review of Solvency II

It is important that the EU countries maintain the principles in Solvency II that consumer protection must be in a risk-based approach. Meaning the rules should always focus on where the risk is greatest, so to avoid unnecessary regulation and ensure economic growth and development in Denmark.

Insurance & Pension Denmark has a particular focus on the following:

Volatility Adjustment (VA)

In Denmark, the supplement reflects i.a. investments in mortgage bonds. As mortgage bonds are a significant part of the overall Danish economy, it is important that Danish insurance and pension companies continue to have an incentive to invest in them.


In relation to proportionality, Insurance & Pension Denmark focus on the fact that insignificant risks can be calculated using less resource-intensive methods. And smaller companies should not be subject to the same reporting requirements as large multinational companies.

Interest rate risk

Interest rate risk in the review reflects how exposed the companies are to changes in interest rates. When Solvency II was adopted in 2016, no one imagined that interest rates could become negative. This is corrected in the review, and it is something that the industry clearly supports.


Sustainability has gone from having a marginal importance in the review to being a main topic. Insurance & Pension Denmark generally supports evidence- and risk-based measures.

Jenny Maria Thers Rée

Want to know more?

Jenny Maria Thers Rée

Senior Consultant, Actuary