Insurers consider there is no need to develop an extensive recovery and resolution framework

Insurers consider there is no need to develop an extensive recovery and resolution framework for insurers, Insurance Europe said in a statement. Yet, as such a framework is likely to be adopted, insurers have drawn a set of key messages summing up their view on the topic.

In the message addressed to the European Commission’s proposal for an Insurance Recovery and Resolution Directive (IRRD), Insurance Europe emphasized that the framework should be properly tailored to the insurance sector and take into consideration the specific characteristics of the EU’s different national markets.

As such, the Commission’s proposal for an IRRD needs a number of significant changes to make it fit for purpose and to avoid subjecting European insurers and their policyholders to a greater and more costly unnecessary regulatory burden.

The key messages outline how the Commission’s IRRD proposal could be streamlined to deliver a pragmatic yet effective approach to resolution for Europe’s insurance industry.

The Commission should:

  • 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.

The Commission should not:

  • 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.