Background and purpose

Directive (EU) 2009/138/EG (Solvency II) has formed the prudential framework for insurers across the European Union since 2016 and is built on three pillars (as set out further below). Following the mandatory 2020 review, the European Commission identified a number of areas in which the framework should be strengthened or updated, resulting in the Amending Directive. The Amending Directive aims to strengthen cooperation and resilience in the European insurance market, improving policyholder protection and transparency while ensuring insurers remain robust during stress. It also promotes long‑term investment and better integration of climate and macroprudential risks, supporting the EU’s green, digital, and economic goals. The Implementation Act transposes these amendments into the Dutch Financial Supervision Act and relevant lower‑level regulations.

Key items

In summary, notable changes are as follows:

  • Introduction of a proportionality regime for insurers and a new category of small and non-complex insurers;
  • Changes to the calculation of technical provisions and the solvency capital requirement;
  • Macroprudential supervision to intervene in the event of systemic risks and sector-wide shocks and changes in the group supervision; and
  • Strengthening of the governance, amongst which inclusion of ESG risks in the internal governance and risk management of insurers.

Scope and proportionality

First, the Implementation Act raises the thresholds that determine whether insurers fall under Solvency II, from EUR 5,4 million to EUR 15 million in annual gross written premiums and from EUR 26,6 million to EUR 50 million in technical provisions. Insurers below these thresholds may instead fall under the existing national Solvency II Basic regime.

A major change is the introduction of a new proportionality regime for small and non‑complex insurers. This regime is proposed to be incorporated into new Section 3.5.1b Wft, which consists of three new articles:

  • Article 3:131ba Wft (new) sets out the criteria and procedure for obtaining a classification as a small and non‑complex insurer.
  • Article 3:131bb Wft (new) describes the proportionality measures available to insurers that fall within this category, including simplified governance, reporting and valuation requirements.
  • Article 3:131bc Wft (new) enables insurers that do not meet the criteria to apply to the Dutch Central Bank (De Nederlandsche Bank, DNB) for approval to use specific proportionality measures.

These provisions include the possibility to combine key functions under strict conditions and to perform the Own Risk and Solvency Assessment (ORSA) less frequently.

Quantitative requirements (Pillar 1)

The Amending Directive revises several quantitative components of the Solvency II framework. Although the numerical calibrations follow directly from EU law, the Implementation Act ensures supervisory enforceability under the Wft. The proposed revised elements include:

  • A new method for extrapolating the risk‑free interest rate curve, with a transitional period until 2032;
  • A recalibrated volatility adjustment that may only be applied with prior DNB approval;
  • A reduction of the cost‑of‑capital rate from 6% to 4.75% and a change in the calculation of the risk margin; and
  • Amendments to the Solvency Capital Requirement calculation, including adjustments for negative interest rates, widening of the symmetric equity adjustment from 10% to 13%, and facilitation of long‑term equity investments.

Supervision of these measures is anchored in existing Wft provisions such as Articles 3:57 and 3:63 Wft, with further technical detail to follow in amendments to the Decree on Prudential Rules under the Financial Supervision Act (Besluit prudentiële regels Wft, Bpr).

Qualitative requirements and supervision (Pillar 2)

Furthermore, changes are proposed to the governance and risk‑management framework under the Wft. The Implementation Act amends Articles 3:8 and 3:9 Wft to remove the Dutch‑specific “second echelon” fit‑and‑proper requirement for insurers. At the same time, Article 3:9c Wft (new) introduces explicit fit‑and‑proper requirements for individuals performing the key functions of risk management, actuarial services, compliance and internal audit.

The Implementation Act also introduces Article 3:18ac Wft (new), which requires DNB to periodically assess insurers’ liquidity positions. Where DNB identifies material liquidity risks, insurers must explain how they intend to mitigate these. Moreover, insurers must integrate cyber risks, sustainability risks and, where relevant, long‑term climate scenarios into their risk‑management frameworks. The ORSA must address macroprudential considerations unless proportionality measures apply. These requirements will be supplemented by amendments to the Bpr.

Reporting and transparency (Pillar 3)

The Solvency and Financial Condition Report (SFCR) will be divided into a public section and a more detailed professional section. Only the balance sheet will require an audit. The Dutch legislator explicitly chooses not to apply either of the audit‑related Member State options, meaning there will be no extension of the audit obligation to other parts of the SFCR or to small and non‑complex insurers.

Macroprudential and group supervision

The Implementation Act also introduces a new macroprudential supervision framework through a series of new Wft articles. Articles 3:111a.2 to 3:111a.6 Wft (new) grant DNB powers to restrict dividend distributions or variable remuneration, require liquidity‑enhancing measures, or oblige insurers to update preparatory crisis plans. Furthermore, several Wft provisions on group supervision will be amended or introduced:

  • Article 3:270 Wft (amended) updates the criteria for excluding undertakings from group supervision.
  • Articles 3:285.0 and 3:285.1 Wft (new) strengthen DNB’s powers to address governance and structural impediments within insurance groups.
  • Articles 3:288h through 3:288hc Wft (amended/new) expand group‑level governance, risk‑management and reporting obligations.
  • Article 3:288.0 Wft (amended) updates the rules for identifying groups under centralised coordination, reflecting changes in the directive.

These amendments reinforce oversight of cross‑border groups, including those with non‑EU parent undertakings.

Dutch implementation choices

The explanatory memorandum emphasises a burden‑light implementation strategy. The key choices include not using the optional SFCR audit extensions, maintaining the Dutch practice that allows internal models to reflect credit‑spread effects on the volatility adjustment, aligning the Solvency II Basic regime so that it is not more burdensome than the proportionality regime introduced for small and non‑complex insurers and introducing transitional rules that allow insurers that already apply proportionality measures to continue doing so for up to four financial years.

Entry into force

The amended Solvency II Directive must be implemented by 29 January 2027, with the new rules applying from 30 January 2027. The draft Implementation Act was open for public consultation until 9 February 2026. A delegated regulation in which the rules are further detailed will follow at a later stage.

Contact

We would be happy to assist you in identifying any relevant changes for your organisation. Do you have any questions regarding Solvency II or other topics related to financial regulation? Please contact our Financial Regulatory Team.