On the international regulatory front, the main development is the introduction of Solvency II in Europe for insurance companies, requiring that: •  assets should be marked to market, and liabilities be discounted at risk-free rates, possibly augmented by a liquidity premium, or a countercyclical premium in case of stressed financial market situations  •  insurers must hold loss-absorbing capital against the full range of risks on both their asset and liability side to withstand unexpected losses with a probability of 99.5% over a one-year horizon.
The fifth Quantitative Impact Study QIS5 by the European Insurance and Occupational Pensions Authority (EIOPA) on the impact of Solvency II shows that most insurers face no imminent need to raise new equity.