Today, on 23.04.2024, the European Parliament will likely adopt the insurance recovery and resolution directive (IRRD). Henrike Hahn, Member of the European Parliament (The Greens/EFA), substitute member of the ECON committee and lead negotiator of the Greens shadow rapporteur for IRRD comments:

“With today’s vote on the insurance recovery and resolution directive (IRRD), we are paving the way for a more stable insurance sector and a more secure European financial system.

Today’s adoption establishes uniform EU-wide rules for the winding up of insurers to offer legal certainty to policyholders and protect taxpayers in the event of insurance failures.

Today's decision on IRRD has a bitter aftertaste because the rules still remain a too large patchwork. Too many insurers are still excluded from the crucial planning requirements for recovery and resolution. This means that these companies but also their customers are not adequately prepared in case of the emergency of an insurance company failure.

At the instigation of the member states, the possibility of using tax money remains when resolving companies - that is highly problematic.

IRRD is intended to contribute to financial stability in Europe. Insurance companies must not be resolved of their own responsibility for their competitiveness in order to be able to rely on taxpayers' wallets in an emergency.

As the Green group, we were able to successfully ensure that national financing mechanisms provided by insurance companies are now available for resolution - this was missing from the Commission's proposal. Insurers must now provide funds at the national level in the event of a resolution of an insurance company.

We Greens were able to get the Commission to submit a report on the introduction of insurance guarantee systems at member state level in two years. Such guarantee systems have already existed in the banking sector for deposits since the financial crisis and now urgently need to be introduced for insurance customers as well. This protects citizens and insurance companies alike.”

 

I would be happy to answer any further questions.