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The Commission has adopted two measures to support the institutional investors’ essential role (such as banks and insurers) in financing the EU and the member states’ economies. These measures deliver on the roadmap set out in the Savings and Investments Union (SIU) strategy and contribute to the EU’s broader objectives of supporting private investment, improving capital market integration and strengthening Europe’s long-term competitiveness.
Background
In March 2025, the Commission adopted the Communication on the Savings and Investments Union (SIU), setting out a comprehensive agenda to deepen Europe’s capital markets and mobilise more private capital in support of EU priorities. The new measures concerning the Solvency II Delegated Act and the Communication on legislative programs under the Capital Requirements Regulation (CRR) are part of the deliverables under this initiative.
More in “Shortening settlement cycle: making the EU capital market more effective”, in: https://www.integrin.dk/2025/07/10/shortening-settlement-cycle-making-the-eu-capital-market-more-effective/
The Commission has set up a public register of legislative programs, available on the DG FISMA website.
More on FISMA in: https://finance.ec.europa.eu/banking/banking-regulation/prudential-requirements/public-register-legislative-programmes-under-capital-requirements-regulation_en
The Commission is also clarifying how banks and insurers can co-invest with the public sector into EU strategic priorities, such as cleantech, biotech, AI, defense and security, etc. Thus, the EU measures are aimed at enabling the risk-avoiding investments into sustainable economic growth and contributing to the EU-wide more resilient and competitive EU and the member states’ financial systems.
The Solvency II amending delegated act is subject to scrutiny by the European Parliament and the Council over a maximum period of three months: this period can be extended by another three months at the request of these two legislative institutions.
The amendments to the Solvency II Delegated Regulation will apply at the same time of the Directive (EU) 2025/2, namely from 30 January 2027.
Present Commission’s regulatory measures have marked an important step of the Savings and Investment Union (SIU) by recognising the essential role of institutional investors, such as banks and insurers, which can support productive investments and boost competitiveness.
The EU delegated Solvency II regulation will further help insurers providing the long-term financing to the real economy, including equity funding which is crucial to allow young and innovative businesses to grow and innovate.
They new measures aim at boosting equity investments by banks and insurers, including where these investments are made alongside public entities – such as the European Investment Bank or national promotional banks.
Insurance regulation in the EU
The EU-wide common rules to facilitate the activities of insurance companies are aimed at ensure that they can survive in difficult times and protect policyholders.
Solvency II is a harmonised prudential framework for insurance firms, applicable since 2016? It replaces a patchwork of rules in the areas of: life and non-life insurance, and reinsurance.
Solvency II rules introduce prudential requirements tailored to the specific risks which each insurer bears. They promote transparency, comparability and competitiveness in the insurance sector.
Solvency II Directive became fully applicable to European insurers and re-insurers in January 2016; it covers three main areas, related to capital requirements, risk management and supervisory rules. The directive consists of the following pillars: – Pillar 1: Risk-based capital rules aimed at requiring the insurance companies to hold capital in relation to their risk profiles to guarantee that they have enough financial resources to withstand financial difficulties. – Pillar 2: Governance and risk management requirements: hence, the insurance companies have to put in place an adequate and transparent governance system to conduct their own risk and solvency assessment on a regular basis. – Pillar 3: Supervisory reporting and public disclosure: it enables supervisors to review and evaluate whether insurance companies comply with the rules and requires these companies to report to supervisory authorities and disclose information publicly.
In September 2021 the Commission adopted a proposal for amendments to the Solvency II Directive and in December 2023 the European Parliament and the Council reached a political agreement on the new proposal. In October 2025, the Delegated act on Solvency II regarding technical provisions, long‑term guarantee measures, own funds, equity risk, spread risk on securitisation positions, other standard formula capital requirements, reporting and disclosure, proportionality and group solvency. It was a follow-up of the January 2025 legislation on IRRD – Insurance Recovery and Resolution Directive.
Source: https://finance.ec.europa.eu/banking/insurance/insurance-regulation_en
Amendments to Solvency II rules
The European insurance sector manages around €10 trillion of assets and is a key institutional investor. The amendments to the Solvency II delegated regulation encourage long-term investments by enhancing the investment capacity of insurers. This will allow them to allocate more capital to financing the real economy, while maintaining the robustness of the legal framework and the protection of policyholders. For instance, the delegated regulation includes a dedicated treatment for long-term equity investments by insurers to encourage the financing of European firms and facilitate their access to stable, long-term capital, including through private equity and venture capital.
To support EU strategic priorities such as the green and digital transitions or security and defense projects, a new preferential treatment is also introduced for insurers’ equity investments under legislative programs where public subsidies and guarantees are involved. Alignment with banking rules on legislative programs regarding the eligibility criteria ensures legal certainty and predictability for both public and private investors.
The review of the Solvency II Delegated regulation also removes unnecessary prudential costs for insurers when investing in securitisation. This is one of the four deliverables under the securitisation package adopted in June 2025 aimed at reviving the EU securitisation market.
The amendments to the Solvency II Delegated Regulation will preserve insurers’ ability to offer long-term life insurance and pension products, by making the prudential framework more conducive to long-term, guarantee-based insurance business. Certain types of life insurance policies have an investment objective, helping citizens to get better returns on their savings and improve their financial well-being.
The review also reduces administrative burdens by streamlining reporting and disclosure requirements, removing overlaps with other EU rules, and introducing more proportionality for insurers with simple business models.
Legislative programs under the Capital Requirements Regulation
Recently adopted Communication provides guidance on how banks can benefit from more favorable prudential treatment under the Capital Requirements Regulation (CRR) when investing in equity through legislative programs (structured public investment schemes) established under EU or national law. These programs, which combine public backing (such as guarantees or co-investment) with private funding and clear oversight mechanisms, support sectors that are critical to Europe’s competitiveness and security, including clean technologies, digital innovation and defense.
By clarifying how the CRR’s rules apply, the guidance promotes a consistent and transparent application across the Single Market. Banks investing under eligible legislative programs will be able to apply a lower capital charge to these exposures, reflecting their reduced risk, while maintaining strong supervisory safeguards and financial stability.
This initiative makes it easier for EU companies to access equity financing. It is also an important step toward a more integrated and diversified EU capital market in line with the objectives set out in the Competitiveness Compass and the Commission’s broader investment agenda under the SIU.
General reference to: https://ec.europa.eu/commission/presscorner/detail/en/ip_25_2540