On 26th October 2018, Finance Watch responded to a consultation held by the European Insurance and Occupational Pensions Authority (EIOPA) on insurance resolution funding and national insurance guarantee schemes (IGS).
In its response Finance Watch highlighted the need of having in a place an appropriate insurance recovery and resolution framework to help ensure financial stability in the EU. Safeguards should be in place to ensure that taxpayers do not end up footing the bill for insurance company failures. This should include ensuring that insurance company failures are properly managed and that management of the companies is held sufficiently to account in these cases to avoid moral hazard issues.
Under the Capital Markets Union agenda the European Commission aims to incentivise EU citizens to consume products provided by the financial services industry to supplement, or replace, services that may have been guaranteed by governments, such as pensions. This is likely to further increase the criticality of services provided by private-sector financial services companies and puts a greater importance on having a proper framework in place to ensure that they are properly dealt with if they fail.