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Welcome to the monthly newsletter of the Solvency II Association. Today we will try to understand better the Solvenbcy ii directive. Solvency II is a regulatory project that provides a risk-based, economic-based, and principle-based framework for the supervision of insurance and reinsurance undertakings.  In Solvency II, capital requirements will be determined on the basis of the risk profile of undertakings, as well as on the way in which such risks are managed, therefore providing the right incentives for sound risk management practices and enhanced transparency.  Solvency II is a long-term project that started more than ten years ago, building a reference regulatory framework that will apply both in normal and crisis circumstances.  The design of the framework relies on technical provisions which allow undertakings to meet their commitments towards policyholders, arising from the insurance and reinsurance activity (the expected obligations), and capital requirements which should cover unexpe