Regulatory Alerts2016-06-02
Added · Updated
The Basic framework
The Basic framework applies to limited-risk insurers not exempted from prudential supervision, aligning with the Solvency II Directive while incorporating proportional simplifications. It maintains the same conceptual framework and calculation methods for capital and technical provisions but applies a lower absolute lower limit for the minimum capital requirement. Basic insurers are exempt from preparing an Own Risk and Solvency Assessment, must follow pre-2016 rules for risk management and group supervision, and are subject to national disclosure obligations rather than EIOPA Guidelines. Unlike Solvency II insurers, they do not benefit from the single licence and home-country principle, requiring separate applications for foreign expansion.