The European Commission has welcomed the European Parliament’s approval of the proposed Directive on the taking-up and pursuit of the business of Insurance and Reinsurance, also known as the Solvency II Directive. Solvency II is a ground-breaking revision of EU insurance and reinsurance law designed to improve consumer protection, modernise supervision, deepen market integration and increase the competitiveness of European insurers. Under the new system, insurers and reinsurers would be required to take account of all types of risk to which they are exposed and to manage those risks more effectively and with increased transparency. In addition, insurance groups would have a dedicated 'group supervisor' that would enable better monitoring of the group as a whole. Intensive negotiations between the Parliament, the Council and the Commission over the recent months have prepared the ground for swift adoption by the EU’s Council of Ministers, to which the text as approved by the Parliament will now return.