The document discusses the challenges of preparing for Solvency II, the new regulatory framework for insurance companies in the European Union. It outlines the three pillars of Solvency II - quantitative capital requirements, supervisory review process, and disclosure requirements. It emphasizes that preparations should focus on more than just Pillar I capital requirements and should include embedding new governance and risk management procedures required by Pillars II and III. Undertakings need to ensure they fully understand Solvency II and its implications on their business.