Bearing in mind complexity of the requirements of the Solvency II Directive and the need for a significant adjustment of the insurance sector, the Insurance Supervision Agency has started a series of activities so that the Montenegrin insurance sector is fully prepared for the full application of all requirements of Solvency II.

After the first stress test conducted in 2020, the Agency conducted a second stress test of the Montenegrin insurance sector in 2024, based on the methodological standards of the European Insurance and Occupational Pensions Authority (EIOPA).

The Agency noted in the report that aggregate capital requirement before and after stress of both life and non-life insurers remained relatively unchanged. After the stress, the capital adequacy of the sector remained at satisfactory level, but at the individual level certain insurance companies had SCR ratio below the regulatory minimum of 100%.

Montenegro, as a candidate country for membership in the European Union, is obliged to start applying the Solvency II Directive, which represents a comprehensive and risk-based regulatory framework for the insurance sector. The Insurance Supervision Agency plans to conduct the next stress test of the insurance sector in 2027.

The full test report can be found here.