|Author (Corporate)||European Commission: DG Financial Stability Financial Services and Capital Markets Union|
|Series Details||COM (2021) 582|
Legislative initiative - adopted by the European Commission on 22 September 2021 - aiming to set a framework for the recovery and resolution of insurance and reinsurance undertakings. It seeks to amend Directive 2002/47/EC, Directive 2004/25/EC, Directive 2009/138/EC, Directive (EU) 2017/1132, Regulation (EU) No 1094/2010 and Regulation (EU) No 648/2012. This is a proposal for a new Insurance Recovery and Resolution Directive (IDDR) This is a text with EEA relevance.
Insurance policy is part of the daily life of citizens, and holding an insurance policy is necessary to protect against potential risks in many social and economic activities. The disorderly failure of insurers can therefore have a significant impact on the lives of policy holders, beneficiaries, injured parties or affected businesses. Directive 2009/138/EC - also known as Solvency II Directive - was adopted to reduce the likelihood of failures and improve the resilience of the European Union's insurance industry. Nevertheless, situations of financial distress cannot be completely excluded.
The EU lacks harmonised procedures for resolving insurers. This results in substantive and procedural differences between the laws, regulations and administrative provisions that govern the failure of insurers in the Member States. In addition, corporate insolvency procedures may not be appropriate for insurance, as they may not always ensure an adequate continuation of critical functions. In October 2014, the Financial Stability Board (FSB) developed Key Attributes on effective resolution regimes for the insurance sector. Complementary guidance was released in June 2016 and August 2020. In November 2019, the International Association of Insurance Supervisors (IAIS) adopted Insurance Core Principles as well as a Common Framework for Internationally Active Insurance Groups (IAIG).
This draft law reflects these developments at an international level and seeks to implement these standards into EU legislation. It was tabled by the European Commission on 22 September 2021, as part of a legislative package reviewing the Solvency II framework. It was based on preparatory work developed by EIOPA, and reports prepared by the ESRB in 2017 and 2018. The Council of the European Union adopted a general approach on 20 December 2022.
|Subject Categories||Business and Industry, Internal Markets|
|Subject Tags||Financial Services, Risk | Crisis Management|
|International Organisations||European Union [EU]|