EIOPA has published an Opinion, which proposes a minimum harmonised and comprehensive recovery and resolution framework in the area of recovery and resolution for Solvency 2 (re)insurers.
EIOPA’s view is that although Solvency 2 has reduced the likelihood of insurers failing in the future, it is not designed to completely eliminate this risk. Given the current low interest rate environment which poses a risk to insurers, it considers that a harmonised and effective recovery and resolution framework is particularly relevant. For example, to enable national authorities to be able to manage crisis situation effectively.
EIOPA proposes the following four building blocks of the desired framework:
- Preparation and planning
- Early intervention
- Cross-border cooperation and coordination