Proportionality under the Solvency II offers insurers a vast spectrum of new possibilities. The proportionality regime aims to reduce the regulatory burden on less complex insurers—known as small and non-complex undertakings (SNCUs)—by aligning requirements more closely with their risk profile. It also offers flexibility for larger insurers under certain conditions. Recently, the European Insurance and Occupational Pensions Authority has also published additional technical specifications as part of further supervisory guidance. These documents set out concrete details to support the calculation and interpretation of the amended Directive and Delegated Regulation, providing a clear incentive to start exploring opportunities to apply proportionality measures. The revised rules are set to apply from 30 January 2027.

The recently issued technical specifications, which provide updated guidance on calculation methods, create a strong incentive to begin detailed analysis to determine whether insurers may apply for proportionality measures. This briefing note provides insight into the requirements and processes that must be followed to apply proportionality measures, and what initial actions and steps can be taken.

Key discussion points:

• Proportionality measures: An overview of the wide range of measures focused on reporting, governance, computational issues and risk management.
• Process: The two separate regulatory pathways to obtain proportionality measures, the SNCU classification process, and negative classification for SNCU status.
• Initial actions: Using quantitative reporting templates to see if the SNCU classification is met, and steps to take if an undertaking does not meet all the criteria.
• Dutch law: Details on incorporation into the law, and the divergence with the Solvency II Directive.
• Captive insurers: Captive-specific classification process and potential reliefs.
• Groups: The two methods for calculating group solvency, and reliefs independent of SNCU status.