The EU Council and the Parliament have reached a provisional agreement on amendments to the Solvency II directive and new rules on insurance recovery and resolution (IRRD). The directive is the EU's main piece of legislation in the insurance area. The aim of the IRRD is to ensure that insurers and relevant authorities in the EU are better prepared in cases of financial distress. This will enable them to intervene sufficiently early and quickly in a crisis situation, including across borders. 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, the Council says, making the sector “more resilient and prepared” for future challenges to better protect insurance policyholders. The sector will also contribute to the financing of the green and digital transitions and Europe’s economic recovery from the COVID-19 pandemic.
