The purpose of the publication is to investigate the main factors that affect insurance and cause risks and to develop measures in order to contribute for the establishment of effective risk management function due to Solvency II directive requirements that are planned to become valid since 31st of December, 2014. Solvency II directive requirements should establish common risk management principles for every insurance company’s solvency in European Union. The authors of the publication according to regulatory documents (procedures) and scientific literature results identify the Solvency II framework’s main principles thus exploring the components of the risk management function and its establishment possibilities.