Explanatory Memorandum to COM(2021)582 - Framework for the recovery and resolution of insurance and reinsurance undertakings - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2021)582 - Framework for the recovery and resolution of insurance and reinsurance undertakings. |
|---|---|
| source | COM(2021)582  |
| date | 22-09-2021 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
Insurance policies form an integral part of the daily life of European citizens. For many social and economic activities, holding an insurance policy is necessary to protect against potential risks. An insurance policy can also be a savings product, which will determine the long-term welfare of the holders while insurers channel these savings via financial markets into the real economy. The disorderly failure of insurers can therefore have a significant impact on policy holders, beneficiaries, injured parties or affected businesses, especially where critical insurance services cannot be substituted in a reasonable amount of time and at a reasonable cost. The management of a near-failure or the failure of certain insurers, particularly large cross-border groups, or the simultaneous failure of multiple insurers can also lead to or amplify financial instability.
The Solvency II Directive reduced the likelihood of failures and improved the resilience of the EU insurance industry, and will be reinforced by the review adopted together with this proposal 1 . Nevertheless, despite a sound and robust prudential framework, situations of financial distress cannot be completely excluded.
Yet, there are currently no harmonised procedures at European level for resolving insurers. This results in considerable substantive and procedural differences between the laws, regulations and administrative provisions that govern the failure of insurers in the Member States. In addition, corporate insolvency procedures may not be appropriate for insurance, as they may not always ensure an adequate continuation of critical functions. A regime is therefore needed to provide authorities with a credible set of resolution tools to intervene sufficiently early and quickly if insurers are failing or likely to fail to ensure a better outcome for policy holders, while minimising the impact on the economy, the financial system and any recourse to taxpayers’ money.
At international level, in October 2014 the Financial Stability Board (FSB) developed Key Attributes (KA) on effective resolution regimes for the insurance sector targeting any insurer that could be systemically significant or critical if it fails. The FSB released complementary guidance on developing effective resolution strategies and plans in June 2016 and in its KA Assessment Methodology in August 2020. In parallel, in November 2019 the International Association of Insurance Supervisors (IAIS) adopted Insurance Core Principles for all insurance and reinsurance undertakings as well as a Common Framework for Internationally Active Insurance Groups (IAIG) detailing standards for pre-emptive recovery planning for IAIG and powers that authorities are expected to have available to manage an orderly exit from the market. Resolution planning for individual insurance groups is expected as necessary.
This proposal reflects these developments and implements these international standards into European legislation. It is based on the preparatory work developed by EIOPA, in particular its July 2017 Opinion 2 , and on EIOPA’s technical advice on the review of the Solvency II Directive 3 . It also follows reports prepared by the ESRB in 2017 and 2018 4 which argue in favour of a harmonised recovery and resolution framework in insurance.
• Consistency with existing policy provisions in the policy area
This proposal has been developed in full consistency with the Solvency II framework, particularly, its intervention ladder for undertakings in the event of deteriorating financial conditions and the recovery measures already available for breaches of capital requirements. While it adds certain elements of crisis preparedness, the new preventive powers are consistent with the intervention ladder and the supervisory powers already provided for in the Solvency II framework; they do not lead to a new pre-defined intervention trigger other than the level of the Solvency Capital Requirement. The proposal is also consistent with the corresponding policies in the field of recovery and resolution for credit institutions and investment firms 5 and central counterparties 6 .
• Consistency with other Union policies
By stabilising the critical functions of distressed insurers, this proposal helps to ensure a better protection of savers and investors, maintain insurers’ essential functions for the real economy and reinforce financial stability. It supports the essential conditions for facilitating efficient and sustainable flows of capital to where they are needed.
Overall, this proposal helps to reinforce the role of insurers as long-term investors and actors in the economic recovery following the COVID-19 crisis, in line with the political objectives of the Capital Markets Union and the European Green Deal.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The legal basis for the proposal is Article 114 of the TFEU. This allows the adoption of measures for the approximation of national provisions which have as their object the establishment and functioning of the internal market.
The proposal harmonises national laws on recovery and resolution of insurers, or introduces such a framework if there is none yet, to the extent necessary to ensure that Member States have the same tools and procedures to address failures. By establishing minimum harmonised requirements in the internal market, the proposal would establish a level playing field across the Member States. The harmonised framework would also safeguard the interests of policy holders and preserve the real economy. It would contribute to financial stability and trust in the internal market for insurance and reinsurance by ensuring a minimum capacity for resolution of insurers in all Member States and by facilitating cooperation between national authorities when dealing with the failure of cross-border groups. Therefore, the proposal has as its object the establishment and functioning of the internal market and Article 114 of the TFEU is the appropriate legal base.
• Subsidiarity (for non-exclusive competence)
Currently, insurance recovery and resolution systems are national and only in place in a handful of Member States. Many national legal systems therefore do not confer the powers necessary for authorities to deal adequately with failing insurers. These divergent national legislations are also insufficient in cases of cross-border failure, particularly for cross-border groups where uncoordinated actions could quickly lead to suboptimal outcomes. Establishing adequate resolution arrangements at Union level requires significant harmonisation of national practices and procedures, which justifies the Union proposing the necessary legislation.
The objective of this proposal, namely the harmonisation of the rules and processes for the recovery and resolution of insurers, cannot be sufficiently achieved by the Member States; instead, due to the effects of a failure of any undertaking in the Union, it can be better achieved at Union level. Therefore, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union.
• Proportionality
This proposal implements international standards and follows the advice of EIOPA. To ensure the suitability and effectiveness of the recovery and resolution framework, and to limit excessive administrative burdens and costs on insurers and authorities, the proposal contains proportionate requirements that take into consideration the nature, scale and complexity of the organisation, activities and services of an insurer. This applies to the scope of undertakings that would be subject to pre-emptive recovery planning and resolution planning; authorities can also allow insurers to be subject to a simplified set of obligations when developing and maintaining their plans. National insolvency procedures would remain a possible exit from the market for a failed insurer and supervisory intervention would remain judgement-based.
The provisions of the proposal are, therefore, proportionate to what is necessary to achieve its objectives.
• Choice of the instrument
Prudential supervision is based on the Solvency II Directive, and resolution is closely linked to non harmonised areas of national law, such as insolvency and property law. Therefore, a directive is the appropriate legal instrument since transposition is necessary to ensure the framework is implemented in a way that achieves the intended effect, within the specificities of relevant national law.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
This proposal shares its Impact Assessment (IA) with the proposal on the review of the Solvency II framework 7 . Annex 10 of the IA evaluates the current Solvency II framework and concludes that it has been broadly effective in achieving progress towards its overarching objectives of facilitating the development of the single market in insurance services while adequately protecting policy holders. However, since its entry into application in 2016, the Solvency II prudential framework has been implemented in a variety of ways by the national supervisory authorities (NSAs). This has been the case, for instance, for the intervention ladder which aims to restore the financial situation of insurers after a deterioration has been observed, or, more broadly, for measures related to recovery and resolution. In addition, in light of the growing cross-border activities and the new challenges posed by the prevailing economic and financial conditions, the Solvency II framework has not yet provided a regime that could ensure the coordinated resolution of insurers.
A majority of Member States do not have an effective recovery and resolution framework in place, and when they do, there are substantial differences between them 8 . These differences include the powers and tools available to authorities, the conditions under which these powers can be exercised and the objectives pursued when addressing the failure of insurers. In addition, as evidenced by the few cases of failure and near-failure recorded by EIOPA, the lack of sufficient preparedness of both insurers and public authorities, the lack of adequate tools and powers or the lack of cross-border coordination may have impeded a prompt and successful recovery or resolution of failing insurers in the EU. Consequently, the level of protection for policy holders and beneficiaries may have been suboptimal.
• Stakeholder consultations
In July 2017, EIOPA published an Opinion on the harmonisation of recovery and resolution frameworks for insurers across the Member States; EIOPA published a second Opinion in December 2020 following the Commission’s “Call for Advice” of February 2019. In both cases, EIOPA conducted a public consultation. In addition, the Commission organised a conference in January 2020, including one session focused on recovery and resolution.
On 19 February 2020, the Commission consulted Member States through the Expert Group on Banking, Payments and Insurance. Member States were invited to comment on the Commission’s consultation strategy and on EIOPA’s impact assessment of its proposals. A specific exchange of views took place on a possible approach to recovery and resolution, notably through a targeted survey.
In July 2020, an Inception Impact Assessment (IIA) provided a detailed analysis of different policy options; feedback from stakeholders on the IIA was collected until August 2020. From July to October 2020, a public consultation on the review of the Solvency II framework gathered 73 responses from a variety of stakeholders, mostly from the European Economic Area. A “summary report” on the feedback to this consultation was published on 1 February 2021 9 .
These consultations showed that while public authorities and civil society broadly supported better alignment of recovery and resolution elements, the insurance industry found such a harmonisation largely unnecessary and pointed to the likely high compliance costs. Some participants stressed the need to have a proportionate application of the rules. All stakeholders, however, stressed the need for better coordination and information exchange between supervisors in a cross-border context.
On 10 November 2020, the Commission consulted Member States through the Expert Group on Banking, Payments and Insurance on additional elements related to insurance recovery and resolution. Overall, Member State experts agreed with the policy orientations suggested in EIOPA’s 2020 Opinion.
• Collection and use of expertise
To support its work on the review of the Solvency II framework, the Commission sent a comprehensive “Call for Advice” to the EIOPA, including on recovery and resolution. The final report from EIOPA was published on 17 December 2020.
In addition to consulting stakeholders, the Commission participated in the discussions and exchange of views informing the work of EIOPA, the IAIS and the FSB on the recovery and resolution of insurers. In this regard, the legislative proposal is fully in line with the latest FSB and IAIS policy orientations.
• Impact assessment
The IA for this proposal was developed as part of the broader Solvency II review and received a positive opinion from the Regulatory Scrutiny Board (RSB) on 23 April 2021. Costs and benefits associated with this proposal were thoroughly assessed and consulted upon on two occasions by EIOPA 10 ; the main insights from EIOPA’s analysis are reflected in the IA and summarised below.
The RSB made a number of recommendations for improvements, which led to the IA being further refined. In particular, the assessment of options and the overall costs and benefits of the Solvency II review, together with the recovery and resolution proposal were further substantiated.
The IA found that the implementation of a pre-emptive recovery and resolution framework would effectively address the observed lack of preparedness, possibly delayed interventions, the incomplete toolbox and uncoordinated management of cross-border cases of (near-) failure.
However, the IA concluded that, in line with international guidance and standards, it is necessary to introduce specific conditions for entry into resolution to address situations where an insurer would have a systemic impact if it fails. In particular, the policy options developed in the proposal would provide a credible framework to address the distress of insurers whose failure could negatively affect policy holders. A harmonised set of powers to prevent and address failures with consistent design, implementation and enforcement features would foster cross-border cooperation and coordination during crises and help to avoid any unnecessary economic costs stemming from uncoordinated decision-making between different public authorities and courts. It would also contribute to the level playing-field and avoid regulatory arbitrage.
In terms of costs, the IA demonstrated that they would stem mostly from the planning and resolvability assessment requirements. EIOPA’s impact assessment provides an overview of the range of costs estimated by the NSAs for drafting and maintaining resolution plans and resolvability assessments, and for the supervision of pre-emptive recovery plans. Insurers would face costs from drafting pre-emptive recovery plans, from making information available for resolution planning or from possible changes to address impediments to resolvability. No assessment of these costs was available for the IA; however, as pre-emptive recovery plans would be integrated in the ongoing risk management of insurers, ORSA reports and contingency planning could serve as a source of input.
The IA also confirmed EIOPA’s assessment that it would not be proportionate to require the financing of a resolution fund by the insurance industry or the building-up of liabilities by individual insurers that could be bailed-in to absorb losses and recapitalise failing insurers. The IA assessed that these measures would inflate the balance sheet of insurers to create a loss-absorbing capacity in proportion to their technical provisions; this would entail higher costs for the industry and impose additional servicing risks on the companies that would not be justified by materially increased benefits 11 .
• Regulatory fitness and simplification
As explained under section 2, no additional intervention ladder is created in Solvency II and the new planning requirements are subject to adequate proportionality. The introduction of these proportionality elements should help to reduce regulatory and administrative burdens associated with implementing the proposal and to achieve an appropriate balance with its expected benefits.
By fostering awareness and preparedness, the proposal contributes to better-informed and timely remedial actions when needed by insurers. It would also enhance the level playing-field in the measures taken by authorities to restore their financial conditions or resolve them, and thereby contribute to fairer competitive conditions.
• Fundamental rights
This proposal complies with fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union (the Charter), notably the rights to property, the freedom to conduct a business, the right to an effective remedy and to a fair trial and the right of defence, and has to be applied in accordance with those rights and principles.
Any interference with rights of shareholders and creditors which results from resolution action should be compatible with the Charter. In particular, where creditors within the same class are treated differently under resolution action, such distinctions should be justified in the public interest and proportionate to the risks being addressed. Affected creditors, including policy holders, should not incur greater losses than those which they would have incurred if the insurer had been wound up under normal insolvency proceedings at the time that the resolution decision is taken.
4. BUDGETARY IMPLICATIONS
The proposal has no implications for the Union budget.
The proposal would require EIOPA to: (i) develop ten technical standards and six guidelines; (ii) establish one annual report on the use of simplified obligations; (iii) maintain a database on administrative sanctions reported by national authorities; and (iv) take part in resolution colleges, make decisions in case of disagreement between supervisory and resolution authorities and exercise binding mediation. The newly established resolution committee would also prepare the tasks for EIOPA in the areas covered by the proposal. In this context, relevant competent authorities shall be invited to participate, as members, in to these developments, thereby maximising use of existing resources.
The delivery of the technical standards is due 18 months after the entry into force of the Directive. This deadline should provide sufficient time for EIOPA to develop them considering its current resources. The only recurrent deliverable relates to the report on the use of simplified obligations.
The workload associated with creating and maintaining the database on sanctions will likely depend on the flow of events reported by national authorities. Occurrences should be limited and would be spread over time, allowing EIOPA to manage its existing resources as necessary.
Considering past and current work on crisis management at EIOPA, it is considered that the proposed tasks for EIOPA will not require the establishment of additional positions and can be carried out with current resources.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The proposal requires Member States to transpose the recovery and resolution rules in their national laws within 18 months from the entry into force of this proposal. As mentioned in section 5, national authorities should report to EIOPA on the application of simplified obligations on an annual basis, which EIOPA should in turn disclose.
• Detailed explanation of the specific provisions of the proposal
Title I – Scope, definitions and authorities
Contents
- Subject matter and scope of application (Article 1)
- Set-up of resolution authorities (Article 3)
- Simplified obligations (Article 4)
- Pre-emptive recovery planning (Articles 5 to 8)
- Resolution planning and resolvability assessments (Articles 9 to 16)
- Joint decisions (Article 17)
- Resolution conditions (Article 19)
- Resolution tools and powers (Articles 26 to 52)
- Ancillary provisions concerning resolution, including valuation, safeguards, procedural obligations and rights of appeal and exclusion of other actions (Articles 23 to 25 and 53 to 66)
- Title IV - Cross-border group resolution (Articles 67 to 71)
- Title VII - Changes to the Solvency II Directive, Company Law Directives and the EIOPA Regulation
- Changes to the Company Law Directives and the EIOPA Regulation (Articles 83 to 88)
This proposal addresses crisis management (preventive powers, pre-emptive recovery planning and resolution) in relation to all insurance and reinsurance undertakings established in the EU that are subject to the Solvency II framework.
In addition, as the failure of an entity affiliated to a group can impact the solvency and the operations of the whole group, pre-emptive recovery and resolution planning needs to identify and encompass the all material entities of groups of which an insurer may form part and authorities should possess effective means of action with respect to those entities to impose remedial actions that takes into account the financial soundness of the group, address impediments to resolvability in a group context and produce a consistent resolution scheme for the group as a whole, in particular in a cross-border context.
This proposal requires Member States to set up insurance resolution authorities, equipped with a minimum harmonised set of powers to undertake all the relevant preparatory and resolution actions. The proposal does not specify the particular authority that should be appointed and can therefore be for example national central banks, competent ministries, public administrative authorities or other authorities entrusted with public administrative powers. In case the powers are assigned to an existing authority, adequate structural arrangements should be in place to avoid conflicts of interest between supervisory and resolution functions and operational independence, in particular with regard to supervisory authorities.
Title II – Preparation
In order to comply with the principle of proportionality and to avoid excessive administrative burden, authorities should, where appropriate, apply different or reduced pre-emptive recovery and resolution planning and information requirements on an undertaking-specific basis, and at a lower frequency of updates, taking into account a number of factors related to the undertaking. On an annual basis, authorities should report to EIOPA on the application of simplified obligations.
Groups should draw up and submit to the group supervisor group pre-emptive recovery plans. Also insurers, which are not part of a group subject to such planning requirements are required to prepare and regularly update pre-emptive recovery plans that set out actions to be taken by those undertakings for the restoration of their financial position where this has significantly deteriorated. Supervisors should identify the insurers that are obliged to draw up pre-emptive recovery plans based on a number of factors. Overall, at least 80% of a Member States’ market should be subject to such requirements and low risk undertaking would be excluded on an individual basis.
These plans will improve the insurer’s understanding of its vulnerabilities and its realistic options in stress scenarios should be an integral part of an undertaking’s system of governance and existing tools may serve as input when preparing pre-emptive recovery plans.
Pre-emptive recovery plans are to be assessed by the supervisory authorities to check whether the plans are comprehensive and could feasibly restore an undertaking’s viability in a timely manner.
Resolution authorities are required to prepare resolution plans setting out the resolution actions which the authority envisages in the event the conditions for resolution are met. Overall, 70% of undertakings per Member State should be subject to resolution planning and low risk undertaking would be excluded on an individual basis. The relevant insurers should be identified based on a number of proportionality criteria, including the expected impact of their failure.
Neither pre-emptive recovery nor resolution plans should rely on any extraordinary public financial assistance or expose taxpayers to the risk of loss.
As part of resolution planning, resolution authorities should also assess the overall resolvability of the insurer and address any impediments thereto. The authorities’ discretion should be limited to what is necessary in order to simplify the structure and operations of the insurance or reinsurance undertaking solely to improve its resolvability.
Group supervisors, supervisory authorities, group resolution authorities and resolution authorities, as applicable, should endeavour to reach joint decisions, following the procedure set out in this Article.
Title III – Resolution
The proposal establishes common parameter for triggering the application of resolution tools. An insurance or reinsurance undertaking should be placed in resolution when it is failing or likely to fail and there is no prospect that private sector alternatives or supervisory measures can avert failure.
At the same time, it is necessary to ensure that intrusive measures are triggered only when interference with the rights of stakeholders is justified and resolution action would be in the public interest.
When the conditions for resolution are satisfied, resolution authorities will have the power to apply the following resolution tools:
(a)write-down or conversion of capital instruments, debt instruments and other eligible liabilities in particular to facilitate the exercise of other resolution tools such as the solvent run-off or the transfer tools. A specific hierarchy is created that complements and were necessary supersedes the one established in each national insolvency law. In principle, shareholders claims should be exhausted before those of subordinated creditors. It is only when those claims are exhausted that the resolution authorities can impose losses on more senior claims. In certain circumstances, conversion will take place to dilute seriously the remaining shareholders’ claims;
(b)solvent run-off: the authorisation of an undertaking under resolution to conclude new insurance or reinsurance contracts is withdrawn in order to limit its activity to the exclusive administration of its existing portfolio, thereby maximising the coverage of insurance claims by existing assets;
(c)sale of business: all or part of an undertaking’s business can be sold on commercial terms, without complying with procedural requirements that would otherwise apply.
(d)bridge undertaking: all or part of an undertaking’s business can be transferred to a publicly controlled entity. The bridge undertaking must be authorised in accordance with the Solvency II Directive. Its operations are temporary in nature, the aim being to sell the business to a private purchaser when market conditions are appropriate.
(e)asset and liability separation: impaired or problem assets and/or liabilities can be transferred to a management vehicle to allow them to be managed and worked out over time. In order to minimise competitive distortions and risks of moral hazard, this tool should only be used in conjunction with another resolution tool.
Where available, insurance guarantee schemes could contribute to funding the resolution process by absorbing losses to the extent of the net losses that those schemes would have had to suffer after protecting policy holders in normal insolvency proceedings. In those cases, the application of the write-down or conversion tool would ensure that eligible policy holders are protected up to at least the coverage level which is the main reason why such insurance guarantee schemes have been established under national law.
In order to apply those tools, resolution authorities will have powers to take control of an institution that has failed or is about to fail, take over the role of shareholders and managers, transfer assets and liabilities and enforce contracts. Where applicable, resolution actions will need to be consistent with the Union State aid framework. National authorities will be able to provide for, in addition to the minimum harmonised toolkit, specific national tools and powers if they are compatible with the principles and objectives of the Union resolution framework. In particular, national authorities may consider the use of the write-down or conversion tool to recapitalise a failing insurer as long as insurance claims are not affected and that appropriate reorganisation and restructuring measures are taken.
Ancillary provisions concerning resolution, including valuation, safeguards, procedural obligations and rights of appeal and exclusion of other actions (Articles 23 to 25 and 53 to 66)
In order to ensure that resolution decisions are taken in accordance with key principles regarding property rights and compliance with relevant securities and company law, the Directive includes the necessary provisions and steps which resolution authorities would have to comply with before and upon taking resolution decisions. For example, these include ensuring an accurate valuation of the insurer’s balance sheet, safeguards for affected shareholders and creditors, including policy holders, to receive compensation if they end up worse than if the insurance or reinsurance undertaking been wound up under national insolvency proceedings, the procedural steps by way of which authorities should notify the insurer and other authorities concerned of resolution decisions and a right of appeal against crisis prevention or crisis management measures. To facilitate resolution and the objective of safeguarding financial stability, the framework also includes a temporary moratorium on the payment of claims and stays in the redemption rights of policy holders in relation to life insurance contracts.
To take account of the cross border nature of some insurance groups and create a comprehensive and integrated framework for recovery and resolution actions in the Union, resolution colleges will be established under the leadership of the group resolution authority and with the participation of EIOPA. The EIOPA will facilitate cooperation of authorities, contribute to consistency and mediate if necessary. The objective of the colleges is to coordinate preparatory and resolution measures among national authorities to ensure optimal solutions at Union level.
Title V – Relations with third countries (Articles 72 to 77)
Insurers in the Union are active in third countries and vice versa, and therefore an effective framework for resolution needs to provide for cooperation with third country authorities. The proposal provides Union authorities with the necessary powers to support foreign resolution actions of a failed foreign insurer by giving effect to transfers of its assets and liabilities that are located in or governed by the law of their jurisdiction, under certain conditions. Union resolution authorities should also have the power to apply resolution tools to national branches of third country undertakings where separate resolution is necessary for reasons of public interest or the protection of local policy holders.
The proposal provides that cooperation agreements with foreign resolution authorities could be concluded to facilitate the support for foreign resolution actions. EIOPA could enter into framework administrative arrangements with authorities of third countries in accordance with Article 33 of Regulation No 1094/2010 and national authorities could conclude bilateral arrangements in line with the EIOPA framework arrangements.
Title VI – Penalties (Articles 78 to 82)
In order to ensure compliance by insurers, those who effectively control their business and their administrative, management or supervisory body with the obligations deriving from this proposal, Member States should provide for administrative sanctions and other administrative measures which are effective, proportionate and dissuasive. EIOPA should maintain a central database of all administrative sanctions.
Title VII - Changes to the Solvency II Directive, Company Law Directives and the EIOPA Regulation
Changes to the Solvency II Directive, including on preventive measures (Article 83)
Without affecting the existing ladder of intervention, this proposal clarifies supervisory authorities’ powers to impose preventive measures to insurers in cases of deteriorating financial positions or breaches of regulatory requirements, to avoid the escalation of the problems at a sufficiently early stage of deterioration.
In order to achieve an effective resolution, the provisions on reorganisation and winding-up are amended to extend their application in the event of use of the resolution tools both when those instruments are applied to insurers and entities covered by the resolution regime.
The Union Company Law Directives contain rules for the protection of shareholders and creditors. Some of these rules may hinder rapid action by resolution authorities. It is therefore proposed to amend these.
In order to ensure that resolution authorities are represented in the European System of Financial Supervision and to ensure that EIOPA has the necessary expertise, Regulation (EU) No 1094/2010 would be amended in order to include resolution authorities in the concept of competent authorities.