Solvency and Financial Condition Report Template (Solvency II SFCR)

Solvency and Financial Condition Report: [Undertaking name], [Year]

Public annual Solvency and Financial Condition Report (SFCR) for an insurance or reinsurance undertaking under Solvency II: a short part for policyholders and beneficiaries, and a detailed part for market professionals covering business and performance, system of governance, risk profile, valuation for solvency purposes, capital management and sustainability, with the public quantitative templates. Based on Directive 2009/138/EC (Solvency II) Articles 51 to 56 as amended by Directive (EU) 2025/2 (applies from 2027-01-30) and Commission Delegated Regulation (EU) 2015/35 Articles 290 to 303 and Annex XX as amended for the same date. UK Solvency UK and other regimes are noted as comparisons. Replace every [bracketed] value and every row marked Example. This is a documentation format, not legal, actuarial or financial advice; check the current official text, your supervisor's instructions and a qualified professional.

Document control

Approvals

Revision history

Contents

1. Regime, scope and timeline
2. Part 1: Information for policyholders and beneficiaries
3. Part 2, A: Business and performance
4. Part 2, B: System of governance
5. Part 2, C: Risk profile
6. Part 2, D: Valuation for solvency purposes
7. Part 2, E: Capital management
8. Part 2, F: Sustainability-related information
9. Public quantitative templates
10. Non-disclosure, updates and means of disclosure
11. Production process and controls
12. Glossary and references
13. Standard and licence note

1. Regime, scope and timeline

Confirm the legal basis for this reporting year. Directive (EU) 2025/2 amends Solvency II: Article 51 is replaced (the SFCR becomes two parts, one for policyholders and beneficiaries and one for market professionals), Article 51a is inserted (audit of the solvency balance sheet for undertakings other than small and non-complex undertakings and captives, with national options to extend it), and Article 256c applies the audit to groups. Member States transpose by 2027-01-29 and apply the rules from 2027-01-30. The Commission's amending Delegated Regulation, C(2025) 7206, replaces Articles 290 to 294, 296 and 297 of Delegated Regulation (EU) 2015/35, inserts Articles 297a and 298a, replaces Annex XX and applies from the same date.

The annual deadline is set by Article 51(7) of the Directive as amended. Under the pre-2027 rules the solo SFCR was due 14 weeks after year end and the group SFCR 6 weeks later. Confirm the amended deadlines in the consolidated text and any supervisory transitional statement before you build the timeline.

2. Part 1: Information for policyholders and beneficiaries

Open with the statement on language versions required by Article 292(1) and links to versions in other languages (Article 298a: on request, the undertaking sends a translation within 10 working days unless one is online). Then cover the items below in plain language, with no abbreviations left unexplained.

2.1 Who we are and how we performed

2.2 Our capital and our risks

Insert the prescribed SCR and MCR description from Article 292(3) of the amended Delegated Regulation here, without changes.

Describe the main risks in a few sentences each, including sustainability risks, any material change in the year and how the undertaking reduces them (reinsurance, diversification, limits).

Example: Our largest risk is that claims from storms and floods are higher than expected. We buy reinsurance so that a 1-in-200-year storm costs us no more than EUR 35m after recoveries. Our second risk is a fall in the value of the bonds we hold. Climate change is increasing weather losses over time; we review prices every year and test our capital against severe climate scenarios.

2.3 Other material information for policyholders

State whether the undertaking publishes transition plans under Article 19a or 29a of Directive 2013/34/EU and give the link (Article 292(4)).

3. Part 2, A: Business and performance

3.1 Business

Give the legal entity identifier, supervisor and group supervisor, external auditor and audit scope, qualifying holders by name, the position in the group with an organisation chart, material lines of business and geographies, and significant events (Article 293(1)).

3.2 Underwriting performance

3.3 Investment performance

Show income and expenses by asset class, gains and losses recognised in equity, and investments in securitisations (Article 293(3)).

Total investment return in the income statement: Example: 17.7 plus 0.9 equals EUR 18.6m, as stated in Part 1.

3.4 Other income, expenses and other information

Describe other material income and expenses (Article 293(4)) and any other material information (Article 293(5)).

4. Part 2, B: System of governance

Describe the AMSB, its committees, segregation of responsibilities and the key functions (risk management, compliance, internal audit, actuarial), or the material changes since the previous SFCR. Explain the remuneration policy, including fixed and variable components, deferral, performance criteria and how the policy integrates sustainability risks. Report material transactions with shareholders, persons with significant influence and AMSB members.

5. Part 2, C: Risk profile

For each category (underwriting, market, credit, liquidity, operational, other material risks including sustainability), describe exposure, measurement, concentration, mitigation and the sensitivity or stress tests performed. Cross-refer to the ORSA (finance/orsa-report) for the forward-looking assessment without disclosing ORSA content the supervisor has not asked to be public.

6. Part 2, D: Valuation for solvency purposes

6.1 Balance sheet summary

6.2 Technical provisions

Describe for each material line of business the best estimate, the risk margin, the methods and assumptions, the level of uncertainty, the use of the matching adjustment, volatility adjustment or transitional measures and the quantified effect of not applying them, and the main differences from the financial statements.

6.3 Reconciliation to the financial statements

7. Part 2, E: Capital management

7.1 Own funds

Explain the objectives and time horizon for managing own funds and the material changes by tier over the year.

Example: For the MCR, Tier 2 is limited to 20% of the MCR (0.20 x 45.6 = 9.1) and Tier 3 is not eligible, under the tiering limits in Article 82 of Delegated Regulation (EU) 2015/35; check the amended text.

7.2 Solvency Capital Requirement

State whether undertaking-specific parameters, simplifications or an internal model are used. The MCR of EUR 45.6m equals 25% of the SCR, the floor of the corridor in Article 129(3) of the Directive.

7.3 Non-compliance

If the MCR or SCR was breached during the period or at disclosure, state the period, cause, consequences, remedial measures and their effect. Example: No breach occurred.

8. Part 2, F: Sustainability-related information

Disclose the elements of the sustainability risk plans required by Article 44 of the Directive as amended, including quantifiable targets; whether the undertaking publishes transition plans under Directive 2013/34/EU and where; whether it has material exposure to climate change-related risks after the materiality assessment in Article 45a(1) and what actions it has taken. If the SFCR is used to meet disclosure duties under Regulation (EU) 2019/2088 or Regulation (EU) 2020/852, include that information here.

9. Public quantitative templates

Attach the public templates for the reporting year as an annex, in the form required by the implementing technical standards applicable to that year (Commission Implementing Regulation (EU) 2023/895 under the pre-2027 rules, or its successor). Reconcile each template to the narrative.

10. Non-disclosure, updates and means of disclosure

Information may be withheld only where the Directive allows (Article 53) and with supervisory permission; record it here internally and give it in the regular supervisory report instead. Publish an updated SFCR after a major development (Article 54, Article 302 of the Delegated Regulation), labelled as updated and dated. Keep both parts on the website for at least five years (Article 301); if there is no website, send an electronic copy within 10 working days of a request.

11. Production process and controls

UK comparison: UK insurers report under Solvency UK; the PRA moved the retained reporting and disclosure rules into the Reporting Part of the PRA Rulebook (policy statement PS3/24, February 2024). The UK SFCR does not follow the EU two-part structure; check the current Rulebook. US comparison: there is no SFCR; insurers file public statutory annual statements under NAIC rules and a confidential ORSA summary report.

12. Glossary and references

12.1 Glossary

12.2 References

Standard and licence note

Based on Directive 2009/138/EC (Solvency II) as amended by Directive (EU) 2025/2, and Commission Delegated Regulation (EU) 2015/35 as amended by the Commission Delegated Regulation adopted on 29 October 2025 as C(2025) 7206, which applies from 30 January 2027. EU legislation is cited by article number and summarised in original words; the prescribed SCR and MCR description must be taken from the Official Journal. Check the current consolidated texts, implementing technical standards, EIOPA guidance and your supervisor's instructions before use. Quillmere Assurance SE, its group and every figure are fictional. This template is original text and is not legal, actuarial or financial advice; check the current official text and a qualified professional. Template licence: MIT.