Resolution planning for insurance undertaking

In relation to resolution, the package includes one draft Regulatory Technical Standard (RTS) on resolution plans and three sets of guidelines covering critical functions, the assessment of resolvability and measures to remove impediments to resolvability.

These measures provide further clarity on how resolution authorities should prepare for the orderly resolution of insurance and reinsurance undertakings and groups that fall within the scope of the IRRD. They form a key step in the practical implementation of the framework ahead of its expected application from 2027.

Draft RTS on the content of resolution plans and group resolution plans

The draft RTS specify the minimum content of resolution plans and group resolution plans, including:

• The core information that resolution plans should contain.
• Operational preparedness for resolution.
• The analysis of potential resolution strategies under different scenarios.

EIOPA has sought to ensure consistency with the broader insurance supervisory and recovery and resolution framework, including the IRRD and existing Solvency II requirements where relevant, while allowing sufficient flexibility to apply the standards across different business models and group structures.

Guidelines on the identification of critical functions

EIOPA has published guidelines setting out criteria for identifying critical functions, defined as activities whose disruption could have a severe impact on policyholders, beneficiaries or financial stability. Resolution authorities are required to prepare resolution plans for undertakings identified as performing such functions. A simple example of a critical function could be the continued servicing of a large volume of insurance policies where disruption would materially affect policyholders.

In developing the guidelines, EIOPA has taken into account economic and legal realities, as well as national specificities, while also reflecting international recovery and resolution standards and related policy work developed by bodies such as the International Association of Insurance Supervisors (IAIS) and the Financial Stability Board (FSB).

Guidelines on the assessment of resolvability

Further guidelines specify the matters and criteria to be considered when assessing the resolvability of undertakings or groups. The assessment focuses on whether selected resolution strategies are feasible and credible, taking into account factors such as:

• Operational continuity
• Liquidity and funding
• Information systems and data
• Governance
• Communication

The guidelines aim to promote a consistent approach across Member States, while allowing resolution authorities discretion to reflect firm‑specific characteristics and business models.

Guidelines on measures to remove impediments to resolvability

EIOPA has also published guidelines on the steps resolution authorities may take if they identify barriers to resolvability. These steps are limited to those set out in the IRRD and should be applied in a proportionate way. They may include asking firms to improve governance, strengthen information and reporting arrangements, or amend organisational structures that make resolution more difficult.

For example, where a group structure or operational arrangement makes resolution harder to carry out, authorities may require changes to improve preparedness. The guidelines also require authorities to consider the potential impact of such measures on an undertaking’s business.

What firms should consider

These measures are likely to be most relevant for insurers and groups that fall within scope of the IRRD’s resolution planning requirements. Firms may wish to review their resolution planning, governance and operational arrangements against the emerging standards, particularly in areas such as critical functions, resolvability, organisational complexity and the information needed to support orderly resolution.

How Forvis Mazars can help

Our prudential risk experts recognise that the IRRD and related supervisory developments remain a key driver of strategic and governance priorities for institutions. We support clients in reviewing resolution planning frameworks, resolvability assessments and governance arrangements against emerging supervisory expectations. We work closely with our clients to identify their regulatory responsibilities and support firms in achieving full compliance.