In October 2011, the European Insurance and Operational Pensions Authority (EIOPA) issued its final report on the equivalence of the Swiss supervisory system to Solvency II. Under Solvency II, equivalence has three strands affecting European Economic Area (EEA) insurers with reinsurance outside the EEA, EEA insurers with subsidiaries outside the EEA, and non-EEA companies with EEA subsidiaries. 

Essentially, the Swiss supervisory system was found to fully meet the criteria for equivalence quantitative requirements of the Swiss Solvency Test (SST) for life insurers to those of Solvency II. Solvency II and the SST are conceptually similar principle-based, risk-based solvency regimes based on market-consistent valuation of assets and liabilities. However, while the regulatory objectives are consistent, there are a number of areas where the two regimes approach this in very different ways. This Milliman Research Report addresses the key quantitative (Pillar 1, in Solvency II terms) issues for life insurance under both regimes and seeks to qualitatively compare them.