Insurance Europe has published a position paper detailing industry recommendations for the implementation of the Insurance Recovery and Resolution Directive (IRRD), which is set to take effect on January 30, 2027.
The European Insurance and Occupational Pensions Authority (EIOPA) is currently developing technical standards and guidelines for the directive. Insurance Europe has highlighted its commitment to contributing to the discussions to ensure that the IRRD remains practical, efficient, and proportionate, while avoiding unnecessary complexity or administrative burden.
The position paper identifies several areas where further clarification and consideration are needed. One key issue is the timing of implementation, with the industry recommending that the first pre-emptive recovery plans should not be required before mid-2028.
The paper also highlights concerns about unclear definitions, noting that terms such as "compulsory minimum coverage," "material change," and "remedial actions" need to be clearly defined to ensure consistent application across EU member states.
It is worth noting that in 2022, back when it was still under proposal, Insurance Europe responded to the European Commission’s proposal for an IRRD by saying that there is no real need to develop such a framework.
The insurance federation also said that the Commission’s proposal for an IRRD needs “significant changes” to prevent subjecting European insurers and their policyholders to unnecessary, greater and more costly regulatory burden.
Regarding minimum market coverage requirements, Insurance Europe calls for a structured approach, first recognising insurance group plans before imposing additional requirements on smaller entities.
Similarly, the industry argues that subsidiary-level recovery plans should only be required where risks cannot be effectively managed within the group plan.
The paper also calls for greater clarity on financing arrangements, particularly for companies operating across borders under freedom of services (FoS) and freedom of establishment (FoE) rules.
EIOPA’s guidelines on critical functions should allow for national discretion and take into account the differences between insurance markets across Europe, the paper states.
Other areas highlighted include confidentiality of recovery and resolution plans, the responsibilities of resolution authorities, and the need to recognise the unique characteristics of insurance businesses and market variations.
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