# Solvency II

*Regulation & Compliance — Finicade finance glossary*

Solvency II is the EU capital regime for insurers, requiring capital sized to survive a one-in-200-year loss over one year.

Solvency II is the EU capital regime for insurers, requiring capital sized to survive a one-in-200-year loss over a year, with market-consistent valuation of assets and liabilities. It's the insurance analogue of Basel for banks. Its practical effect on markets is large: capital charges shape what insurers can hold, which influences demand for long-dated bonds and infrastructure debt.

**Also known as:** Solvency 2, insurance capital regime

**Related terms:** [Capital Adequacy Ratio](https://finicade.com/glossary/capital-adequacy-ratio), [Insurance](https://finicade.com/glossary/insurance), [Actuary](https://finicade.com/glossary/actuary), [Basel Rules](https://finicade.com/glossary/basel-rules), [Economic Capital](https://finicade.com/glossary/economic-capital)

Source: https://finicade.com/glossary/solvency-ii