An EIOPA survey of 30 national supervisory authorities shows that – in the absence of EU legislation governing recovery and resolution planning (RRP) for insurers – the landscape of national RRP frameworks has remained fragmented:
EIOPA recognises that current resolution powers, such as to transfer the portfolio of an insurer and to put an insurer into (solvent) run-off, have proven to be adequate in dealing with many insurers in financial distress. However, this has not been tested for the failure of large cross-border insurance groups, some of which (in particular where part of a banking and insurance conglomerate) were rescued through government intervention.
The tentative conclusion reached by EIOPA is that a minimum harmonisation of RRP powers should be implemented, not least to deal effectively with cross-border cases. EIOPA therefore asks for comments on the implementation of each of the FSB’s Key Attributes, including recovery and resolvability planning and assessments (with interventions where these assessments identify impediments to recovery or resolution); and granting insurance resolution authorities (once they are established!) the full set of FSB-recommended resolution powers.