On Monday 27 October, the European insurance and reinsurance federation, Insurance Europe, called for an immediate pause in the implementation of the Insurance Recovery and Resolution Directive (IRRD), adopted by EU co-legislators in late 2024 (see EUROPE 13518/23). The Directive is to be transposed by EU Member States into national law by January 2027 and is intended to replace the existing framework for managing insurer failures in the EU.
However, Insurance Europe believes that the new Directive risks imposing disproportionate and costly obligations on European insurers, going well beyond international standards and threatening the sector’s competitiveness at a time when the EU is seeking to simplify its regulations.
“The insurance industry recognises the benefits of being well prepared for situations of severe financial distress. Nevertheless, we remain sceptical of the IRRD’s added value, because the Solvency II prudential regime already provides extensive safeguards against the risk of a failing insurer, which mitigate the need for far-reaching recovery and resolution tools”, Angus Scorgie, Head of Prudential Regulation at Insurance Europe, told Agence Europe on Friday 24 October.
The federation is calling on the European Commission to “stop the clock” so that the scheme can be reassessed in consultation with the authorities and market players. According to Insurance Europe, a pause in the implementation of the text would provide an opportunity to rethink the Directive in order to create a more proportionate, simplified and better adapted regulatory framework.
Further information: https://aeur.eu/f/j5u (Original version in French by Bernard Denuit)