Recovery & resolution

Solvency II provides strong consumer protection and financial stability safeguards

Insurers have remained strong despite the effects of the COVID-19 pandemic and they generally weathered the earlier financial crisis well. Indeed, insurance failures are rare and — unlike bank failures — do not happen suddenly, which allows for a managed wind-down that avoids systemic risk or losses for taxpayers.

“The [insurance] sector is well capitalised and able to withstand severe but plausible shocks to the system.”
EIOPA, March 2020

The EU’s prudential framework for insurers, Solvency II, is also strong. It includes a ladder of supervisory intervention, so supervisors can already intervene should an insurer breach its solvency capital requirement (SCR), which is significantly higher than its actual minimum capital requirement (MCR).

The sector’s healthy capitalisation and the strong safeguards in its regulation are why Insurance Europe believes the EU does not need to go beyond the global holistic framework for insurers.
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Olav Jones

Deputy director general/Director, economics & finance
+32 2 894 30 13

Angus Scorgie

Head of prudential regulation & international affairs/reinsurance
+32 2 896 48 36

Nicolas Jeanmart

Head of personal & general insurance
+32 2 894 30 40