Response to EIOPA’s consultations on the IRRD: More proportionate approach needed

The EU is introducing new rules to help insurance companies better prepare for financial difficulties, and to ensure policyholders across Europe are protected if something goes wrong. The Insurance Recovery and Resolution Directive (IRRD) sets out how insurers should plan for potential crises and gives national authorities, like BaFin in Germany, the tools to step in early if a company is in financial distress.

As part of the implementation, the European Insurance and Occupational Pensions Authority (EIOPA) launched six public consultations in April 2025. These focus on the technical details of how the IRRD will be applied in practice, including what pre-emptive recovery and resolution plans should contain, which companies need to prepare them, and how authorities should handle insurers that carry out critical functions. The draft proposals also weigh in on how to assess whether a company can be safely resolved and how to remove impediments that could stand in the way of a resolution.

Need for a balanced and realistic implementation

GDV welcomes the opportunity to comment on EIOPA’s draft proposals, using this opportunity to highlight the need for a balanced and realistic implementation that keeps the sector’s specificities in mind.

Failures in the insurance sector are very rare, and unlike banks, insurers do not face sudden “runs” of customers that require urgent resolution measures. In addition, the Solvency II framework has just been substantially enhanced in order to counteract crisis situations at an early stage, for example through strict capital requirements. Against this background, there is a risk that excessive requirements for pre-emptive resolution planning are copied from the rulebook for banks despite serving no comparable benefit in the insurance sector. Similarly, EIOPA’s current draft proposals regarding the identification of critical functions are much too broad and should be limited to activities of systemic relevance.

Keep additional requirements to a minimum

More generally, GDV warns against introducing new financial or administrative burdens that are not justified by the risks and would put EU (re)insurers at a competitive disadvantage internationally. EIOPA and national authorities should instead aim to keep additional requirements to a minimum, focusing closely on what the Directive itself sets out. With the European Commission focused on boosting competitiveness and encouraging long-term investment, GDV stresses that adding more red tape would risk holding the industry back.