A big question mark arises with the implementation of Solvency II. Quite a lot have been written and said about changing the insolvency law for insurance companies that will take effect from 1 January 2016.

The Solvency II, is a renewed framework for all insurance companies operating within the European Union. In this context, the whole market in the EU should be consistent with EU regulations concerning risk management and capital requirements.

Changing this law is a huge challenge for insurance companies, mainly because of the reduction in coverage for certain types of insurance, the modification of high-risk products and the increase in prices in certain market segments.
It is expected that some of the insurance companies may not be able to meet the new requirements of the law, resulting in some merging or even reduction of the number of "players" in the insurance market.
According to Solvency II, a solvent company will now be considered an insurance company which will:
- Can pay its short-term and long-term liabilities
- Has the ability to ensure that it continues its work in the future
- There are prospects for sustainable growth.

Insurance companies need to distinct in how they will change the calculation of insurance premiums and divide them into Life Insurance and General Insurance. The method of calculating the minimum insolvency margin and the method of calculating the guarantee fund must also be changed.
The objectives of this law are:
- Protection of policyholders who have been given particular attention in the last years
- Contributing to the achievement of financial stability
-Creating equal rights in the operating requirements of businesses and
- Enhancing the competitiveness of European Insurance Companies.

Trust Insurance Cyprus will pursue an action plan, in collaboration with the Group and the Risk Department, in preparation for Solvency II. The Company aims to maintain a strong solvency ratio under the new regime, both under normal circumstances and in stress scenarios.

In addition, the Company has agreed a number of actions with the Board of Directors and its subsidiary to enhance its capital adequacy under the new regulatory regime. In this way, the Company will attract business quality, supportive policyholders and strengthen its leading position in the Cyprus insurance market for the coming years.

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