FINANCIAL STABILITY OF THE EU’s INSURANCE COMPANIES
Keywords:financial stability of an insurance company, solvency, Solvency II, Solvency I vs. Solvency II, method ELECTRE
AbstractThe purpose of this research is to evaluate the system “Solvency II” as a tool to achieve financial stability in the insurance industry. The analysis and synthesis of scientific literature, logical and comparative analysis as well as monitoring and grouping methods have been studied in the research. The dialectical or economic phenomena and cognitive process method is used to research the subject. This paper examines the role of solvency in order to provide financial stability improvements into insurance companies, considering the factors for financial stability of the insurance mechanism. It also assesses the system “Solvency II” and the need for its implementation. The analysis of the new solvency system shows that the system “Solvency II”, in case of its implementation, will reveal the true financial position of insurers as well as improve transparency and confidence in the whole sector. The introduction of risk-based regulatory requirements will ensure that fair balance is struck between strong policyholder protection and reasonable costs for insurers.