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August 9, 2026

Newsletter

The European Post

Policy • Diplomacy • Strategic Insight

LATEST
New EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two DecadesErasmus Opens a 5 Billion Euro Round for Skills and MobilityCeuta Crisis Pushes the EU Toward Faster Migrant ReturnsBulky Parcels Face a Packaging Crackdown From August 12Can Europe Build Its Drone Wall Before 2030 Arrives?Indonesia’s Trade Deal With Europe Nears Its Final SignatureEurope Leans on Beijing to Keep Climate Talks Alive Before AntalyaNew EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two DecadesErasmus Opens a 5 Billion Euro Round for Skills and MobilityCeuta Crisis Pushes the EU Toward Faster Migrant ReturnsBulky Parcels Face a Packaging Crackdown From August 12Can Europe Build Its Drone Wall Before 2030 Arrives?Indonesia’s Trade Deal With Europe Nears Its Final SignatureEurope Leans on Beijing to Keep Climate Talks Alive Before Antalya

Insurers Brace for Europe’s First Rulebook on Orderly Failure

Tómas Garðarsson
Policy Monitor, Maritime Affairs and Fisheries

Trieste: In the Adriatic port that houses one of Europe’s largest insurers, the industry is preparing for a regime it has never faced before. The Union is building its first common framework for winding down failing insurers, and the machinery moved a step closer to reality this summer.

The Insurance Recovery and Resolution Directive, agreed last year, borrows a logic long applied to banks. When a large insurer slides toward collapse, national authorities will gain powers to intervene early, transfer policies to a healthier rival or wind the company down in an orderly way, rather than let a disorderly failure ripple through markets and strand policyholders.

Europe’s insurance supervisor spent this summer drafting the technical detail that makes the rules workable. The authority faced a late-July deadline to submit key standards to the Commission, covering how resolution authorities value an insurer’s assets and liabilities when they step in, and how cross-border resolution colleges coordinate when a group spans several countries.

Those standards decide how the new powers bite. Valuation rules matter because they determine who bears losses when a firm fails, and coordination rules matter because Europe’s largest insurers operate across many borders at once. A rulebook that looks tidy on paper can still falter if supervisors in different capitals read it differently.

The supervisor has released its work in batches through the year, giving insurers time to study what each stage demands. Firms above a certain size must now draw up recovery plans that map how they would rebuild capital under stress, and resolution authorities will prepare their own plans for the largest groups.

The directive answers a gap regulators long acknowledged. After the financial crisis, Europe rebuilt its bank rulebook around orderly failure, yet left insurers governed mainly by solvency rules meant to prevent trouble rather than manage it once it arrives. Insurance resolution closes that gap, extending crisis tools to a sector that holds the long-term savings of millions.

Industry response has been wary but cooperative. Insurers accept the case for orderly resolution, while pressing supervisors to keep the paperwork proportionate, so that mid-sized firms are not buried under demands designed for continental giants. Guarantee schemes that protect policyholders form a parallel strand, with further advice due later in the year.

The timetable stretches ahead. Member states must write the directive into national law by early 2027, and the rules apply to insurers shortly after. Between now and then, the technical standards will be finalised, debated and, in places, contested.

For a firm rooted in Trieste, the message is plain. The era of insurers being deemed too complex to wind down is ending, and the industry is learning to plan for its own worst day.

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