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Benedicte Gravrand, Opalesque Geneva:

Solvency II is a fundamental review of the capital adequacy regime for the European insurance industry, notes the UK FSA on its website. It aims to establish a revised set of European Union-wide capital requirements and risk management standards that will replace the current solvency requirements.

According to some researchers, this might also affect the alternative funds industry as insurers may chose to redeem from or to forego this investment category as an indirect result.

Solvency II: new capital and risk management requirements for EU insurers The Solvency II regime, a new regulatory solvency margin requirement aimed at the EU insurance industry, will take effect in January 2013.

The solvency margin is the amount of regulatory capital an insurance activity must hold against unforeseen events. A limited reform of the EU Solvency regime known as the Solvency I Directive was agreed by the European Parliament and the Council in 2002. Then the European Commission called for further and wider updates and adopted the Solvency II Proposal in July 2007. This revision of EU insurance law was designed to improve consumer protection, modernise supervision, deepen market integra......................

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