The article explores how insurance companies in the EU can adjust their investments to meet new regulations called Solvency II. By studying a Swedish life insurer, the researchers found that it's possible to optimize asset allocation to balance risk and return while meeting capital requirements. They discovered that some investments, like hedge funds, may be seen as risky under Solvency II even if they have low volatility. This study provides a framework for life insurers to make better investment decisions that consider both risk and regulatory capital charges.