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.
Factsheet
Read aloud
The Solvency II Basic supervisory framework (Basic framework) applies to limited-risk insurers (Basic insurers) that are not exempted from prudential supervision. The framework is set up in line with the risk-based supervision of the Solvency II directive (SII Directive), but is designed proportionally and therefore more suited to Basic insurers. This page provides an explanation of the Basic framework and the similarities and differences with the SII Directive, including references to the laws and regulations in which the relevant requirements are laid down.
Published: 02 June 2016
In principle, the Basic framework is quite similar to the SII Directive framework, and the same conceptual framework and calculation methods for actual and required capital and technical provisions apply to Basic insurers and SII insurers. However, the Basic framework contains a number of simplifications.
The composition of both the own funds (Section 70 of the Decree on Prudential Rules for Financial Undertakings (Besluit prudentiële regels Wft – Bpr)) and the minimum capital requirement (Section 52 of the Bpr) is in line with the SII Directive.
The size of the solvency capital requirement (SCR) is also in line with the SII Directive, but involves some simplifications (Section 66 of the Bpr).
The size of the minimum capital requirement is in line with the SII Directive, but the Basic framework applies a lower absolute lower limit for Basic insurers (Section 49b of the Bpr).
Technical provisions are in line with the SII Directive, with some simplifications.
The chapters on recovery plans and short-term financial plans from the Solvency II Directive also apply to Basic insurers.
Investment policy is in line with the Directive, including a localisation requirement.
Because Basic insurers tend to be less complex and smaller in size, and also to keep administrative burdens limited, the Basic framework differs from the Solvency II directive in the following respects:
For operations, risk management, reporting dates and group supervision, the rules that generally applied before 1 January 2016 (under Solvency I) still apply to Basic insurers. Basic insurers are not required to prepare an Own Risk and Solvency Assessment (ORSA) as part of risk management, and with regard to group supervision this also applies to in-kind insurers
Regarding disclosure obligations, the national regime (Section 134d of the Bpr) applies in which no additional reporting is required, but additional information must be included in the financial statements. Accounting standards regulations are in accordance with Book 2 of the Dutch Civil Code (on a current value basis in accordance with Section 3:69a(1) of the Wft) and can be found in Section 4 of the Bpr.
The EIOPA Guidelines do not apply to Basic insurers. Finally, unlike Solvency II insurers, Basic insurers are not subject to the single licence and home-country principle. This means that Basic insurers wishing to expand their operations abroad must apply to the supervisory authority in the relevant country.
Discover related articles
Factsheet
Market access
Insurers
Share:
Share on LinkedIn
Share on X
Share on Facebook
Share via Email
Interesting articles
Dutch insurers and pension funds have been investing more in private assets in recent years
15 July 2026
News item supervision
Dutch insurers and pension funds are investing more and more in private assets, such as private equity and private credit. By 2025, they had a combined total of €276 billion worth of these investments on their books.
Read more Dutch insurers and pension funds have been investing more in private assets in recent years
News item supervision
15 July 2026
De Nederlandsche Bank publishes ‘Integrity Supervision in Focus 2026’
25 June 2026
News item supervision
In the third edition of ‘Integrity Supervision in Focus’ (ISF), we share the key insights from our integrity supervision.
Read more De Nederlandsche Bank publishes ‘Integrity Supervision in Focus 2026’
News item supervision
25 June 2026
DNB email on technical adjustments
25 June 2026
News item supervision
This week, you may receive an email from De Nederlandsche Bank (DNB). This email concerns technical adjustments required to continue corresponding with DNB by email.
Read more DNB email on technical adjustments
News item supervision
25 June 2026
Update FATF-warning lists June 2026
23 June 2026
News item supervision
FATF released an update of its ‘grey’ and ‘black’ lists.
Read more Update FATF-warning lists June 2026
News item supervision
23 June 2026
Necessary cookies
To ensure the proper operation of the website, De Nederlandsche Bank (DNB) uses functional cookies and analytics cookies, and has taken measures to ensure that these cookies have little or no impact on the privacy of website users.
Optional cookies
Some pages include embedded content from external websites. These websites may use proprietary (tracking) cookies. This allows third parties to track visitor statistics, show personalised content and display targeted ads, for example.
You can make your choice about allowing these optional cookies both when you first visit the website and when you navigate to a page with embedded content.