Source: European Parliament
Effective supervision is essential for protecting EU consumers and fostering trust in the single market.
Under the Solvency II Directive[1], the authority of the Member State where an insurer has established its head office has primary responsibility for its supervision and the competence to take necessary measures if its financial condition is not sufficiently sound.
The Insurance Recovery and Resolution Directive (IRRD)[2] and the Solvency II Amending Directive[3] reinforce the regulatory framework, aiming to better protect policyholders and enhance coordination among national authorities.
The IRRD introduces harmonised recovery and resolution measures to protect policyholders, beneficiaries and claimants, and ensure effective crisis management[4].
It also mandates the Commission to issue by January 2027 a report on the potential for minimum common standards for Insurance Guarantee Schemes and, if appropriate, a legislative proposal.
The Solvency II review introduces stronger cooperation and wider information exchange between the home and host Member State supervisors in case of significant cross-border activities[5]. It also enhances the European Insurance and Occupational Pensions Authority’s powers to intervene in complex cross-border cases[6].
Effective and harmonised supervision is also a key objective of the Savings and Investments Union[7]. In this context, the Commission calls on the European Supervisory Authorities and National Competent Authorities to make full use of existing supervisory convergence tools.
Furthermore, it announced its intention to propose measures to strengthen these tools and enhance their effectiveness[8], thereby supporting greater consistency in supervisory practices across the EU.
- [1] Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance, OJ L 335, 17.12.2009, p. 1-155.
- [2] Directive (EU) 2025/1 of the European Parliament and of the Council of 27 November 2024 establishing a framework for the recovery and resolution of insurance and reinsurance undertakings and amending Directives 2002/47/EC, 2004/25/EC, 2007/36/EC, 2014/59/EU and (EU) 2017/1132 and Regulations (EU) No 1094/2010, (EU) No 648/2012, (EU) No 806/2014 and (EU) 2017/1129, OJ L, 2025/1, 8.1.2025.
- [3] Directive (EU) 2025/2 of the European Parliament and of the Council of 27 November 2024 amending Directive 2009/138/EC as regards proportionality, quality of supervision, reporting, long-term guarantee measures, macro-prudential tools, sustainability risks and group and cross-border supervision, and amending Directives 2002/87/EC and 2013/34/EU, OJ L, 2025/2, 8.1.2025.
- [4] In particular, it equips national supervisory authorities and national resolution authority with harmonised mandates and tools to intervene when insurers face financial distress.
- [5] In particular, the home supervisory authority must promptly inform the host authority if it detects deteriorating financial conditions in an insurance undertaking under its jurisdiction. Under certain conditions, the host authority may also request a joint on-site inspection with the home authority and, if the latter accepts the request, EIOPA is invited to participate. See new Articles 152aa, 152ab, 152b of the Solvency II Directive.
- [6] Including by means of binding mediation and, under specific conditions, the disclosure of the names of concerned undertakings
- [7] https://finance.ec.europa.eu/publications/commission-unveils-savings-and-investments-union-strategy-enhance-financial-opportunities-eu_en
- [8] The proposal is scheduled for the fourth quarter of 2025.