Insurance Guarantee Schemes in the Insurance Sector: EIOPA Proposes EU-Wide Minimum Standards

Background

The initiative is based on a request for advice from the Commission pursuant to Article 98 of the Insurance Recovery and Resolution Directive (IRRD). The Commission is required to report to the European Parliament and the Council on whether EU-wide minimum standards for insurance guarantee schemes are appropriate; EIOPA is providing the technical basis for that assessment. This is therefore not yet a legislative proposal, but preparatory work, with the political decision still pending.

The issue has been known for years: some Member States have a protection scheme, while others do not. Where such schemes exist, they differ considerably in terms of scope of coverage, trigger mechanisms, deadlines and funding arrangements. Insurers are permitted to offer services throughout Europe on the basis of a single licence, yet the protection of their policyholders often ends at the national border when an insurer fails. Cases such as Gefion and FWU have demonstrated how differently policyholders who purchased the same product from the same provider can be affected. Of particular relevance for Austria is the fact that the existing protection regime does not automatically meet the IRRD definition of a guarantee scheme and may therefore require adjustment.

Key Recommendations

• Covered contracts: No comprehensive protection, but a targeted selection. In the life insurance sector, this would include almost all classes of business. In the non-life sector, it would cover, in particular, fire and property damage insurance, liability insurance, accident insurance, surety insurance and health insurance. Member States may extend protection beyond these categories.
• Trigger point: No later than the point at which an undertaking has failed or is likely to fail and there is no reasonable prospect of preventing that outcome, that is, the point at which the IRRD would also apply.
• Deadlines: A harmonised deadline for the submission of claims and an EU-wide maximum deadline for payments. Member States wishing to provide faster payments may introduce shorter deadlines at national level.
• Continuation of contracts: The guiding principle remains that the interests of policyholders, beneficiaries and claimants should be protected. The specific design of the arrangements remains a matter for Member States.
• Insolvency ranking: Guarantee schemes should rank at the same level as insurance claims, in accordance with the version of Article 275 of Solvency II adopted by the respective Member State.
• Funding: Arrangements ensuring the availability of short-term liquidity are mandatory, while the form and extent of such arrangements remain open. Ex-post levies should only be permitted where a market analysis demonstrates that the sector is capable of bearing the burden. Adequate ex-ante funding or an operational buffer is required; however, no specific EU-wide target levels are proposed.

What Remains Open

With regard to the extent to which guarantee schemes should contribute to the financing of resolution proceedings, EIOPA deliberately refrains from expressing a preference. The IRRD is still in the process of implementation, and sufficient practical experience is not yet available. The authority takes a clear position, however, on institutional cooperation. At a minimum, national resolution authorities and guarantee schemes should enter into formal cooperation arrangements setting out roles, responsibilities and information flows.

Outlook

The IRRD will apply from 30 January 2027. By then, the Commission's report is also expected to have been published. Insurance undertakings should assess their starting position at an early stage, particularly in markets where a protection scheme that meets the relevant requirements does not currently exist.

Source: EIOPA, Recommendation on Minimum Standards for Insurance Guarantee Schemes in the EU, dated 31 August 2026 (published on 1 September 2026).