Resumen
AbstractSolvency II is the new European Union (EU) legislation that will review the capital adequacy regime for the insurance industry. Considerable progress has been made in the banking sector with the implementation of the Basel Accords (Basel). The implementation of Solvency II, therefore, brings with it an opportunity for the insurance industry to assess the successes, weaknesses and shortcomings experienced by the banking sector's implementation of Basel so as to learn from them and ensure that Solvency II's implementation duplicates the successes and avoids the failures of Basel's. This article critically explores weaknesses and failures of Basel which were exacerbated and/or exploited by the financial crisis of 2007-2010 and provides advice on how these might be mitigated or avoided in the implementation of Solvency II.