Proposal for a Directive establishing a framework for the recovery and resolution of insurance and reinsurance undertakings and amending Directives 2002/47/EC, 2004/25/EC, 2009/138/EC, (EU) 2017/1132 and Regulations (EU) No 1094/2010 and (EU) No 648/2012

Author (Corporate)
Series Details COM (2021) 582
Publication Date 22/09/2021
Content Type

Summary:

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.

Further information:

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.

Source Link https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2021:582:FIN
Related Links
Commentary and Analysis
Moody's Analytics: Regulatory News, 21/09/2021: EC Adopts Solvency II and Resolution Rules Package for Insurers https://www.moodysanalytics.com/regulatory-news/sep-22-21-ec-adopts-solvency-ii-and-resolution-rules-package-for-insurers
Insurance Europe: News, 19/01/2022: EC’s Insurance Recovery and Resolution Directive must not be a “copy paste” from banking regulation https://insuranceeurope.eu/news/2516/ec-s-insurance-recovery-and-resolution-directive-must-not-be-a-copy-paste-from-banking-regulation
Finance Finland: News, 13/10/2022: Nordic insurers: Insurance Recovery and Resolution Directive is not needed – policymaker focus should be on improving solvency regulation https://www.finanssiala.fi/en/news/nordic-insurers-insurance-recovery-and-resolution-directive-is-not-needed/
EPRS: Briefing, December 2022: Insurance recovery and resolution directive https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2022)739273

News
Politico, 28/07/2022: EU watchdog warns politicians against pushing insurance reforms too far https://www.politico.eu/article/eu-watchdog-warns-politicians-against-pushing-insurance-reforms-too-far/

Official
EUR-LEX: SWD(2021)260: Staff Working Document accompanying the Proposal - Impact Assessment Report https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2021:260:FIN
EUR-LEX: SWD(2021)261: Staff Working Document accompanying the Proposal - Executive Summary of the Impact Assessment Report https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2021:261:FIN
European Parliament: Legislative Observatory: Procedure File for Proposal on Framework for the recovery and resolution of insurance and reinsurance undertakings (2021/0296(COD)) https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2021/0296(COD)
European Parliament: Legislative Train Schedule: Proposal for a directive establishing a framework for the recovery and resolution of insurance and reinsurance undertakings and amending Directives 2002/47/EC, 2004/25/EC, 2009/138/EC, (EU) 2017/1132 and Regulations (EU) No 1094/2010 and (EU) No 648/2012 https://www.europarl.europa.eu/legislative-train/theme-an-economy-that-works-for-people/file-solvency-ii-revision-3
European Commission: DG Financial Stability Financial Services and Capital Markets Union: Insurance recovery and resolution https://finance.ec.europa.eu/insurance-and-pension-funds/insurance/insurance-recovery-and-resolution_en
Council of the European Union: Press Release, 20/12/2022: Council agrees position on establishing a framework for the recovery and resolution of insurance and reinsurance undertakings (IRRD) https://www.consilium.europa.eu/en/press/press-releases/2022/12/20/council-agrees-position-on-establishing-a-framework-for-the-recovery-and-resolution-of-insurance-and-reinsurance-undertakings-irrd/

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Record URL https://www.europeansources.info/record/?p=527103