A life assurance company established in Germany sells policies to residents of the Republic of Ireland. Who regulates the solvency of this life company?

• A. The Irish Central Bank.
• B. The German Regulatory Authority, BaFin.
• C. The European Insurance and Occupational Pensions Authority.
• D. The European Securities and Markets Authority.

Answer: (B)

Under Solvency II, the regulator that oversees an insurer’s solvency is the regulator in the country where the insurer is established. Since this life company is established in Germany and sells policies to residents of Ireland, the German regulator, BaFin, is responsible for its solvency oversight. The Irish Central Bank would regulate insurers domiciled in Ireland or operating there, not a German-established company. European-wide bodies like EIOPA and ESMA coordinate at the EU level, but they do not directly regulate the solvency of a specific foreign-established insurer.