The move from the formulaic Solvency I system to the realistic and risk-based Solvency II system is one of the most fundamental changes to take place in European insurance in the past 20 years. It will bring significant new requirements for insurers, and we expect it to lead both to important changes in the way insurance business is done and in the landscape of the European insurance market. Definition of the new system is now in an advanced state. In this paper we give an overview of the current expected form of Solvency II and discuss some of the key implications and issues arising.