The European Parliament has adopted the proposed Solvency Directive II.

The purpose of the Directive is to improve the financial stability of insurers and reinsurers by introducing solvency requirements that take risk management into account. Supervisory bodies will be required to be proactive and Colleges of supervisors comprised of various national supervisory bodies will be assembled to improve the exchange of information and consultation.

The Council of the European Union has reached agreement on the proposal and member states have until 31 October 2012 to implement the directive into their national legislation.