According to Solvency 2, an insurer’s surplus equals the market value of its assets less reserves calculated under minimum regulatory requirements.

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The statement asserts that under Solvency II, an insurer’s surplus equals the market value of its assets less reserves calculated under minimum regulatory requirements.
To unpack this, remember that Solvency II centers on own funds, which represent the insurer’s financial buffers and are defined as the difference between the market value of assets and the value of liabilities, both measured on a market-consistent basis. In other words, surplus is essentially own funds = assets (at market value) minus liabilities, rather than assets minus “reserves calculated under minimum regulatory requirements.”
The phrase about subtracting reserves under minimum regulatory requirements would imply subtracting a regulatoryly dictated reserve rather than the market-consistent liability valuation, which is not how surplus/own funds are defined in Solvency II. Liabilities under Solvency II reflect technical provisions and other liabilities valued consistently at market prices, not a separate minimum-regulatory reserve to be deducted from assets.
In short, the core idea of the statement misstates the calculation: surplus/own funds are assets minus liabilities (both measured market-value-based), not assets minus a regulatory reserve. Hence, the claim is false.
If you’re unsure, compare it to the standard formulation: own funds = market value of assets – market value of liabilities, with adjustments for specified own funds items; it does not involve subtracting a separate minimum regulatory reserve from assets.

ERMCPS5250_006_2025_1 - EXTERNAL STAKEHOLDER REQUIREMENTS Quiz 4- Solvency 2/ORSA/SEC ERM Requirements

According to Solvency 2, an insurer’s surplus equals the market value of its assets less reserves calculated under minimum regulatory requirements.

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