Solvency II 2026 - European Commission review

The European Commission’s Solvency II review introduces a series of regulatory, reporting and capital‑related changes that will come into effect over the coming months. As insurers move past year‑end reporting, now is the ideal time to assess the operational, actuarial and governance impacts of these updates.

Drawing on our actuarial, risk and regulatory specialists, KPMG Ireland outlines the key areas insurers should monitor, and how we can support your implementation planning.

Jean Rea

Partner

KPMG in Ireland

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What’s changing?

Capital & technical provisions (Pillar I)
(Re)Insurers will see updates across assumptions, risk margin and a variety of SCR components. Some of the more material changes include:
- Amendments to yield curve extrapolation and the volatility adjustment
- Reduction of risk margin cost of capital factor and introduction of lamda decay factor
- Changes to market risk SCR correlation matrix
- Revised treatment of long term equity investments
- Interest rate SCR methodology adjustments
- Changes to equity risk sub-module and phase out of duration-based equity risk sub-module
- Changes to equity symmetric adjustment corridor
- Adjustments to spread risk SCR
- Updates to the natural catastrophe SCR and premium and reserve risk SCR
Governance & ORSA enhancements (Pillar II)
Boards and risk functions will need to consider:
- Macro prudential elements within ORSA
- Increased focus on sustainabilty risks and climate scenario analysis Requirements around diversity, independence and key function holders
- Liquidity risk management plans and prudent person principles
- Governance requirements scaled based on proportionality
Reporting & disclosure (Pillar III)
Insurers should prepare for changes to:
- Extension of reporting deadlines
- SFCR audit requirements
- Updated RSR/SFCR structure and disclosures
Groups
Groups should expect enhanced regulatory focus including:
- Improved co-ordination between supervisors
- Updates to treatment of Group structures including intra-group reinsurance

How KPMG Ireland can help

Our cross‑functional Solvency II team can support you across readiness assessment and implementation planning, including:

Gap analysis and prioritisation of required updates
Actuarial modelling support across SCR components
Enhancement of ORSA methodologies and climate scenarios
Review and uplift of governance frameworks
Updated reporting templates and disclosure guidance
Training sessions for Boards and senior management

Get in touch

If you would like to discuss how these changes may affect your organisation, please contact our Insurance and Actuarial specialists. We look forward to hearing from you.