EIOPA published an opinion on the harmonization of the recovery and resolution framework for insurers and reinsurers across the EU. This opinion is addressed to the European Parliament, the Council of the EU, and the EC.
EIOPA calls for a minimum degree of harmonization in the field of recovery and resolution for insurers and reinsurers. Harmonization of the existing frameworks and the definition of a common approach to the fundamental elements of recovery and resolution will avoid the current fragmented landscape and facilitate cross-border cooperation. To achieve the objective to increase policyholder protection and financial stability in the EU, EIOPA proposed the following four building blocks where the definition of a common approach is key:
Preparation and planning
Cross-border cooperation and coordination
The harmonized recovery and resolution framework should cover all insurers and reinsurers subject to the Solvency II framework and should be applied proportionately. The proportionality principle should guide and allow member states to waive certain requirements of the framework such as developing and maintaining pre-emptive recovery and resolution plans for specific insurers. In the coming years, EIOPA will monitor the progress made in the field of recovery and resolution in Member States.
Related Link: EIOPA Opinion (PDF)
Keywords: Europe, EIOPA, Insurance, Solvency II, Recovery and Resolution Framework, Opinion
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