“Insurance Europe does not consider there to be a need to develop an extensive recovery and resolution framework for insurers,” the insurance federation said in its statement. “Should such a framework nevertheless be adopted, it should be properly tailored to the insurance sector and take into consideration the specific characteristics of the EU’s different national markets.”
The insurance federation also stated that the Commission’s proposal for an IRRD needs “significant changes” to prevent subjecting European insurers and their policyholders to unnecessary, greater and more costly regulatory burden.
What is the IRRD?
The IRRD was initially proposed by the European Commission on September 22, 2021. The planned directive would allow insurance authorities to maintain financial stability, protect policyholders, ensure the continuity of re/insurer’s critical functions, and protect public funds. It does this by giving authorities comprehensive and effective arrangements to prepare for and deal with (near) failures of re/insurers at national level; as well as cooperation arrangements to address cross-border re/insurance failures.
What are Insurance Europe’s key positions on the IRRD?
Insurance Europe wants the following changes to be reflected in the IRRD, should the European Commission move forward with its launch:
- Ensure the scope reflects national features, current legislation and legal forms, such as conglomerates.
- Have a targeted scope for recovery and resolution planning requirements, set using risk-based criteria.
- Ensure seamless interaction with the Solvency II supervisory ladder of intervention.
Insurance Europe has also advised the Commission to avoid the following:
- Introduce unnecessary, new supervisory intervention points.
- Require the creation of dedicated resolution authorities.
- Leave the development of important aspects of the IRRD to EIOPA guidelines or regulatory technical standards.
- Introduce a requirement for national resolution funding arrangements.
Source: Insurance Business UK
