This book hopes to provide an overview of the European Union insurance legislative background. In the first place, it shows the reasons why Solvency II is going to be introduced, following with an overall view of Solvency II legislative implementing process, composition and capital requirements. Lastly it shows the requirements for undertakings' corporate governance and focusing on the assessment of the market risk module of regulation's standard formula. Data for this research were obtained mainly from regulators internet address, as the main resource for all insurance undertakings regulated by EIOPA. On the basis of what has been elaborated in this research, it can be concluded that the risk-based approach introduced by the Solvency II Directive is a good measure for improving the insurer's market performance and control together with increasing the safety of the policyholder.