Insurance Europe is calling on the European Commission to "stop the clock" on the implementation of the Insurance Recovery and Restructuring Directive (IRRD).This call comes amid the EU's renewed focus on increasing competitiveness and simplifying regulatory requirements for European businesses — one of the EU's key strategic priorities.
A call for smarter and more proportionate regulation
The IRRD, in its current form, risks imposing a disproportionate and unnecessary burden on insurers across Europe.The proposed framework goes far beyond international standards and introduces requirements that are significantly more complex and expensive than those in third countries.This threatens to undermine the competitiveness of EU insurers and runs counter to recent European Council conclusions, which "urge the Commission and the co-legislators to speed up their work on all paragraphs with a simplification or competitiveness dimension".The proposed 'stopping the clock' is a practical example of the smarter and more proportionate regulation needed to strengthen the EU's competitiveness.
Main Issues: Complexity, Cost, and Limited Benefit
- Disproportionate requirements: IRRD's extensive reporting and planning obligations are not commensurate with the low systemic risk in the insurance sector;
- Limited impact on financial stability: Evidence shows that the insurance sector poses minimal systemic risk and existing frameworks such as Solvency II already provide robust safeguards;
- Administrative burden and costs: IRRD's broad scope, difficult deadlines and overlapping requirements with other initiatives risk overburdening insurers and ultimately increasing premiums for insureds;
- International shortcomings: Other non-EU countries have adopted more proportionate, risk-based approaches, avoiding arbitrary thresholds and over-reporting.
The pragmatic solution: pause and rethink
Insurance Europe calls for an immediate suspension of the IRRD legislative process.This initiative would allow policy-makers, the European insurance regulator EIOPA and industry stakeholders to carry out a thorough impact assessment of what is really needed to protect policyholders and financial stability in relation to failing ...
Insurance Europe is calling on the European Commission to "stop the clock" on the implementation of the Insurance Recovery and Restructuring Directive (IRRD).This call comes amid the EU's renewed focus on increasing competitiveness and simplifying regulatory requirements for European businesses — one of the EU's key strategic priorities.
A call for smarter and more proportionate regulation
The IRRD, in its current form, risks imposing a disproportionate and unnecessary burden on insurers across Europe.The proposed framework goes far beyond international standards and introduces requirements that are significantly more complex and expensive than those in third countries.This threatens to undermine the competitiveness of EU insurers and runs counter to recent European Council conclusions, which "urge the Commission and the co-legislators to speed up their work on all paragraphs with a simplification or competitiveness dimension".The proposed 'stopping the clock' is a practical example of the smarter and more proportionate regulation needed to strengthen the EU's competitiveness.
Main Issues: Complexity, Cost, and Limited Benefit
- Disproportionate requirements: IRRD's extensive reporting and planning obligations are not commensurate with the low systemic risk in the insurance sector;
- Limited impact on financial stability: Evidence shows that the insurance sector poses minimal systemic risk and existing frameworks such as Solvency II already provide robust safeguards;
- Administrative burden and costs: IRRD's broad scope, difficult deadlines and overlapping requirements with other initiatives risk overburdening insurers and ultimately increasing premiums for insureds;
- International shortcomings: Other non-EU countries have adopted more proportionate, risk-based approaches, avoiding arbitrary thresholds and over-reporting.
The pragmatic solution: pause and rethink
Insurance Europe calls for an immediate suspension of the IRRD legislative process.This initiative would allow policy-makers, the European insurance regulator EIOPA and industry stakeholders to carry out a thorough impact assessment of what is really needed to protect policyholders and financial stability in relation to failing insurance companies.
The Insurance Industry
The insurance industry recognizes the benefits of good preparation in times of serious financial distress.However, the sector remains skeptical about the added value of IRRD.The Solvency II prudential regime already provides extensive safeguards against the risk of insolvency of insurers.These mechanisms significantly reduce the need for extensive recovery and restructuring tools.Freezing the IRRD would create an opportunity for simplification and better regulatory streamlining.This will ensure the achievement of the objectives without a disproportionate burden on European insurers.
Frequently Asked Questions
What is IRRD?
Answer: The IRRD is a directive of the European Union which aims to create common rules for the management of serious financial difficulties or bankruptcy of insurance companies.Its main objective is to provide better protection to insured persons and to preserve the financial stability of the insurance sector.
Why is Insurance Europe calling for a pause?
Reply: Insurance Europe considers that the directive introduces excessive and disproportionate requirements to the real risk in the insurance sector.According to the organization, this could lead to an additional administrative burden and reduce the competitiveness of European insurers.
What is the benefit of 'stopping the clock' for IRRD?
Answer: A pause in the implementation of the directive would allow an in-depth analysis of the real need for IRRD.This will enable it to be simplified and better aligned with the existing Solvency II regulatory framework without creating duplication of requirements.
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Insurance Europe is calling on the European Commission to "stop the clock" on the implementation of the Insurance Recovery and Restructuring Directive (IRRD).This call comes amid the EU's renewed focus on increasing competitiveness and simplifying regulatory requirements for European businesses — one of the EU's key strategic priorities.
A call for smarter and more proportionate regulation
The IRRD, in its current form, risks imposing a disproportionate and unnecessary burden on insurers across Europe.The proposed framework goes far beyond international standards and introduces requirements that are significantly more complex and expensive than those in third countries.This threatens to undermine the competitiveness of EU insurers and runs counter to recent European Council conclusions, which "urge the Commission and the co-legislators to speed up their work on all paragraphs with a simplification or competitiveness dimension".The proposed 'stopping the clock' is a practical example of the smarter and more proportionate regulation needed to strengthen the EU's competitiveness.
Main Issues: Complexity, Cost, and Limited Benefit
- Disproportionate requirements: IRRD's extensive reporting and planning obligations are not commensurate with the low systemic risk in the insurance sector;
- Limited impact on financial stability: Evidence shows that the insurance sector poses minimal systemic risk and existing frameworks such as Solvency II already provide robust safeguards;
- Administrative burden and costs: IRRD's broad scope, difficult deadlines and overlapping requirements with other initiatives risk overburdening insurers and ultimately increasing premiums for insureds;
- International shortcomings: Other non-EU countries have adopted more proportionate, risk-based approaches, avoiding arbitrary thresholds and over-reporting.
The pragmatic solution: pause and rethink
Insurance Europe calls for an immediate suspension of the IRRD legislative process.This initiative would allow policy-makers, the European insurance regulator EIOPA and industry stakeholders to carry out a thorough impact assessment of what is really needed to protect policyholders and financial stability in relation to failing ...
Insurance Europe is calling on the European Commission to "stop the clock" on the implementation of the Insurance Recovery and Restructuring Directive (IRRD).This call comes amid the EU's renewed focus on increasing competitiveness and simplifying regulatory requirements for European businesses — one of the EU's key strategic priorities.
A call for smarter and more proportionate regulation
The IRRD, in its current form, risks imposing a disproportionate and unnecessary burden on insurers across Europe.The proposed framework goes far beyond international standards and introduces requirements that are significantly more complex and expensive than those in third countries.This threatens to undermine the competitiveness of EU insurers and runs counter to recent European Council conclusions, which "urge the Commission and the co-legislators to speed up their work on all paragraphs with a simplification or competitiveness dimension".The proposed 'stopping the clock' is a practical example of the smarter and more proportionate regulation needed to strengthen the EU's competitiveness.
Main Issues: Complexity, Cost, and Limited Benefit
- Disproportionate requirements: IRRD's extensive reporting and planning obligations are not commensurate with the low systemic risk in the insurance sector;
- Limited impact on financial stability: Evidence shows that the insurance sector poses minimal systemic risk and existing frameworks such as Solvency II already provide robust safeguards;
- Administrative burden and costs: IRRD's broad scope, difficult deadlines and overlapping requirements with other initiatives risk overburdening insurers and ultimately increasing premiums for insureds;
- International shortcomings: Other non-EU countries have adopted more proportionate, risk-based approaches, avoiding arbitrary thresholds and over-reporting.
The pragmatic solution: pause and rethink
Insurance Europe calls for an immediate suspension of the IRRD legislative process.This initiative would allow policy-makers, the European insurance regulator EIOPA and industry stakeholders to carry out a thorough impact assessment of what is really needed to protect policyholders and financial stability in relation to failing insurance companies.
The Insurance Industry
The insurance industry recognizes the benefits of good preparation in times of serious financial distress.However, the sector remains skeptical about the added value of IRRD.The Solvency II prudential regime already provides extensive safeguards against the risk of insolvency of insurers.These mechanisms significantly reduce the need for extensive recovery and restructuring tools.Freezing the IRRD would create an opportunity for simplification and better regulatory streamlining.This will ensure the achievement of the objectives without a disproportionate burden on European insurers.
Frequently Asked Questions
What is IRRD?
Answer: The IRRD is a directive of the European Union which aims to create common rules for the management of serious financial difficulties or bankruptcy of insurance companies.Its main objective is to provide better protection to insured persons and to preserve the financial stability of the insurance sector.
Why is Insurance Europe calling for a pause?
Reply: Insurance Europe considers that the directive introduces excessive and disproportionate requirements to the real risk in the insurance sector.According to the organization, this could lead to an additional administrative burden and reduce the competitiveness of European insurers.
What is the benefit of 'stopping the clock' for IRRD?
Answer: A pause in the implementation of the directive would allow an in-depth analysis of the real need for IRRD.This will enable it to be simplified and better aligned with the existing Solvency II regulatory framework without creating duplication of requirements.