On Tuesday 20 December, the Member States’ ambassadors to the EU (Coreper) adopted their negotiating position (general approach) on the ‘IRRD’ directive on the recovery and resolution of insurance undertakings. This proposal will strengthen the Solvency II Directive with the aim of making the insurance and reinsurance sector more resilient and enhancing the protection of policyholders, taxpayers, the economy and financial stability in the EU.
“The Insurance Recovery and Resolution Directive (IRRD) will provide harmonised resolution procedures, which will facilitate the handling of insurance company failures, especially in a cross-border context”, said Zbyněk Stanjura, the Czech Republic’s finance minister, in a statement, noting that “about ten European insurers fail every year”.
The IRRD should provide national authorities with similar tools and resolution procedures to deal with defaults. Member States should therefore set up insurance resolution authorities.
The text provides for better cross-border cooperation and gives the European Insurance and Occupational Pensions Authority (EIOPA) a coordinating role. It also aims to ensure a level playing field between Member States and to safeguard the interests of policyholders.
In its position, the EU Council welcomes the value of introducing a harmonised minimum European framework for the recovery and resolution of insurance undertakings, provided that such a framework is proportionate, tailored to the insurance sector and contributes adequately to the protection of policyholders and the maintenance of financial stability in the EU single market.
The European Parliament has yet to define its negotiating position (see EUROPE 13011/17). (Original version in French by Anne Damiani)