Council signs off new rules for the insurance sector

The Council adopted two pieces of legislation that amend the Solvency II directive, the EU's main piece of legislation in the insurance area, and introduce new rules on insurance recovery and resolution (IRRD).

The new rules on Solvency II will boost the role of the insurance and reinsurance sector in providing long-term private sources of investments to European businesses. At the same time they will make the sector more resilient and prepared for future challenges in order to better protect insurance policyholders.

With this dual role, the insurance sector will contribute to deepening the capital markets union, financing the green and digital transitions and boosting Europe’s economic growth.

The aim of the new insurance recovery and resolution directive (IRRD) is to make insurers and relevant authorities in the EU better prepared for situations of significant financial distress, so that authorities can intervene early and quickly, including across borders.

The new rules will protect insurance policyholders, while minimising the impact on the economy, the financial system and avoid recourse to taxpayers’ money.

Next steps

The directives will be published shortly in the EU’s Official Journal and enter into force 20 days later. The new rules will start applying two years after their entry into force.

Background

On 22 September 2021, the Commission transmitted to the Council a comprehensive review package of Solvency II rules, composed of a proposal to amend the Solvency II directive and a proposal for an insurance recovery and resolution directive (IRRD).

Adoption by the Council follows an agreement reached with the European Parliament at first reading under the co-decision procedure.