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EU Solvency II Directive 2009/138/EC - Pillar 1: Solvency Capital Requirement (SCR) and Minimum Capital Requirement (MCR)

EU Solvency II Directive 2009/138/EC (as amended by Omnibus II Directive 2014/51/EU and the 2023 Solvency II Review Directive 2025/2) establishes a…

What EU Solvency II Directive 2009/138/EC - Pillar 1: Solvency Capital Requirement (SCR) and Minimum Capital Requirement (MCR) requires

EU Solvency II Directive 2009/138/EC (as amended by Omnibus II Directive 2014/51/EU and the 2023 Solvency II Review Directive 2025/2) establishes a risk-based Pillar 1 framework for insurance and reinsurance undertakings: the Solvency Capital Requirement (SCR) calibrated to a 99.5% Value-at-Risk over a one-year period, and the Minimum Capital Requirement (MCR) as the absolute floor (25-45% of SCR with hard EUR minimums). The Standard Formula SCR aggregates six risk modules: market risk, counterparty default risk, life underwriting risk, non-life underwriting risk, health underwriting risk, and operational risk. Insurers may apply for Supervisory Authority approval to use an Internal Model for SCR calculation. The 2023 Review introduces a new long-term equity asset class, a revised extrapolation methodology for risk-free rate curves, and proportionality measures for small and low-risk undertakings.

Pillar: Insurance & Risk · Authority: European Insurance and Occupational Pensions Authority (EIOPA) and European Commission (DG FISMA) · Version: 2.0.0 · Last updated:

Primary source: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32009L0138

SHA-256 integrity: c9f67fd3462d34beb6ce24d2419f172176952cff07cae4b046cd204e77f193d0

Primary Citations — 8 traced to source

  • {"source":"EU Solvency II Directive 2009/138/EC - Articles 100-127: Standard Formula and Internal Model SCR Calculation","url":"https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32009L0138","type":"primary_legislation"}
  • {"source":"EU Solvency II Directive 2009/138/EC - Articles 129-134: Minimum Capital Requirement (MCR)","url":"https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32009L0138","type":"primary_legislation"}

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