The key points of the Act are: regulation of the valuation of assets and liabilities, in particular of the technical provisions, new own funds rules, new provisions on the calculation of the Solvency Capital Requirement (SCR), governance requirements for insurers, and measures that insurers offering long-term guarantees can take on request. Furthermore, the new VAG includes special rules for insurance groups and transitional provisions intended to make the changeover to the new supervisory regime easier for undertakings.

The new VAG thus will reflect two systems: one for undertakings that fall within the scope of Solvency II and one for companies that are not subject to the European supervisory regime. The Act to Modernise Financial Supervision of Insurance Undertakings enters into force on 1 January 2016, with the exception of a provision which comes into effect immediately and allows BaFin, among other things, to issue certain supervisory authorisations in anticipation of Solvency II.

Implementation by means of Omnibus II discontinued

Solvency II was initially due to be transposed into German law by the Tenth amendment to the Insurance Supervision Act. However, national implementation procedures were discontinued because of the negotiations on the Omnibus II Directive, which amended certain aspects of the Solvency II Directive.

The Act to Modernise Financial Supervision of Insurance Undertakings is based on the draft for the Tenth Amendment to the VAG, but it also includes the new provisions of the Life Insurance Reform Act (Lebensversicherungsreformgesetz - LVRG) of 1 August 2014.