Regulatory Alerts2014-07-25
Added · Updated
Solvency II: Pillar 1 – Own funds
The document defines own funds under Solvency II as comprising basic and ancillary components, with ancillary items requiring prior supervisory approval from De Nederlandsche Bank (DNB) based on counterparty status and recoverability. Eligible own funds are classified into three tiers, where Tier 1 and Tier 2 capital covers regulatory requirements while Tier 3 is excluded from the minimum capital requirement. A transitional scheme allows non-compliant items to be treated as Tier 1 or 2 basic own funds for a maximum of ten years to facilitate the switch to the new framework. Applications for ancillary own-fund approval may be submitted to DNB starting 1 April 2015.