FINANCIAL STABILITY OF INSURANCE COMPANIES UNDER SOLVENCY II REQUIREMENTS

Abstract

This study examines the financial stability of insurance companies within the framework of Solvency II requirements. The research focuses on the role of risk-based capital adequacy, technical provisions, asset-liability management, liquidity, and risk management in maintaining insurers’ financial resilience. Particular attention is paid to the three-pillar structure of Solvency II, which combines quantitative capital requirements, supervisory review, and market discipline. The study analyzes how the application of Solvency II principles can improve the assessment of insurers’ solvency positions and strengthen their ability to absorb unexpected losses. The findings indicate that effective capital management, adequate technical reserves, diversified investment portfolios, and continuous risk monitoring are key factors in ensuring the financial stability of insurance companies. The study also highlights the importance of adapting Solvency II principles to the specific characteristics of emerging insurance markets, including Uzbekistan. The results may serve as a basis for improving prudential regulation and developing more effective mechanisms for assessing and maintaining the financial stability of insurance companies.