EIOPA Completes Its Solvency II Review Mandate Ahead of 2027

EIOPA has completed its Solvency II review mandate by publishing eight sets of final Guidelines and draft Technical Standards. Together with the revised Solvency II legislation, these measures will apply from 30 January 2027.

The package addresses several important areas of the prudential framework for European insurers.

Key changes include:

• Liquidity risk management: New Guidelines explain how supervisory authorities may use their powers to address liquidity vulnerabilities. In exceptional circumstances, these powers may include temporarily suspending policyholders’ redemption rights.

• Risk margin calculation: New Regulatory Technical Standards support a simplified calculation of the risk margin. The revised approach introduces a time-dependent “lambda factor” designed to better reflect how risks develop over time and reduce the sensitivity of long-term liabilities to interest-rate movements.

• Matching adjustment: The revised framework allows insurers, under specified conditions, to recognise full diversification between a matching-adjustment portfolio and the rest of the undertaking when calculating the Solvency Capital Requirement. The accompanying measures also clarify when matching-adjustment portfolios should be treated as ring-fenced funds.

• Reporting and group supervision: EIOPA has revised and simplified provisions concerning supervisory reporting, public disclosure, group solvency and the information disclosed by supervisory authorities.

The draft Technical Standards have been submitted to the European Commission, which will decide whether to adopt them. The completed package gives insurers and supervisors greater clarity as they prepare for the revised Solvency II framework taking effect on 30 January 2027.