European directive giving insurance a resolution regime comparable to the banking one, with preventive plans, national resolution authorities, and powers to intervene before failure.
Until this directive, the failure of a European insurer was handled under general insolvency law, poorly suited to liabilities running over decades and to a portfolio whose transfer has to be organized so that policyholders stay covered. The directive fills the gap on the banking model, adapted. It requires significant undertakings to hold a preventive recovery plan setting out the measures they would take in the face of severe deterioration, and requires authorities to prepare a resolution plan in advance. It creates a resolution authority in each member state, separate or not from the supervisor but functionally distinct. And it equips that authority with tools: portfolio transfer to another insurer, creation of a bridge undertaking, asset separation, and write-down of claims. The stated aim is not to save the undertaking but to preserve continuity of critical functions and protect policyholders, avoiding the use of public money as a backstop. Its application is tied to that of the Solvency II review, adopted in the same package.
Directive (EU) 2025/1, published in the Official Journal of the European Union in January 2025 alongside the Solvency II review, with transposition expected in early 2027. The precedent that drove the text is the liquidation of several insurers operating under freedom of services from a small member state into foreign markets, a situation where the supervisor granting authorization and the harmed policyholders were not in the same country.
IRRD, directive résolution et redressement en assurance, résolution des assureurs, plan préventif de redressement