This morning, on 14 December 2023, a preliminary political agreement on the Insurance Recovery and Resolution Directive (IRRD) was reached at interinstitutional level. Henrike Hahn, Member of the European Parliament (The Greens/EFA), substitute member of the ECON committee and shadow rapporteur for IRRD comments:
“Today's agreement on a new Insurance Recovery and Resolution Directive (IRRD) is a step in the right direction to make the insurance sector and the European financial system significantly more stable.
With this decision, we are establishing uniform EU-wide rules for the winding up of insurers, which offers legal certainty to policyholders and protects taxpayers in the event of insurance failures.
The rules still remain a patchwork that is too inconsistent: Too many insurance companies are off the hook when it comes to the planning requirements for restructuring and winding up. Furthermore, because of the insistence of member states in the Council, the door remains open to the use of taxpayers' money in the case of resolution.
With the IRRD, we want to support financial stability in Europe, but insurers' responsibility for their competitiveness has to remain clear.
It is a green success that the final result does define national rules on resolution financing - an aspect that was missing from the Commission's proposal. According to these rules, insurance companies have to provide financing at national level to be available in the event of a resolution.
We as the European Parliament were also able to get our way with the Council to have the Commission submit a report on the introduction of insurance guarantee systems at member state level in just two years. This important aspect of protecting policyholders was missing from the Commission's proposal and will now be in place more quickly.”
I would be happy to answer any further questions.