Opinion of the European Central Bank of 02 July 2026 on the designation of Lietuvos bankas as resolution authority for insurance and reinsurance undertakings (CON/2026/21)
Date: 2026-07-02
Institutions: European Central Bank
Subjects: financial stability, legal basis

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 02 July 2026  

on the designation of Lietuvos bankas as resolution authority  

for insurance and reinsurance undertakings  

(CON/2026/21) 

Introduction and legal basis 

On 3 June 2026 the European Central Bank (ECB) received a request from the Lithuanian Ministry of Finance 

for an opinion  on a draft  law amending  Articles  8,  11, 21¹, 43 and 43³ and  Annexes 2  and 3 of Republic of 

Lithuania Law No I-678 on Lietuvos bankas 1 (hereinafter the ‘draft law on Lietuvos bankas’) and on a draft law 

on  the  recovery  and  resolution  framework  for  insurance  and  reinsurance  undertakings  of  the  Republic  of 

Lithuania 2 (hereinafter the ‘draft law on insurance resolution’, together with the draft law on Lietuvos bankas, 

the ‘draft laws’). 

The  ECB’s  competence  to  deliver  an  opinion  is  based  on  Articles  127(4)  and  282(5)  of  the  Treaty  on  the 

Functioning of the European Union and Article 2(1), third and sixth indents, of Council Decision 98/415/EC3, as 

the draft laws relate to Lietuvos bankas and rules applicable to financial institutions insofar as they materially 

influence the stability of financial institutions and markets. In accordance with Article 17.5, first sentence, of the 

Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion. 

1. 

Purpose of the draft laws 

1.1  The draft laws form part of a package of draft legislation whose main purpose is to transpose Directive 

(EU) 2025/1 of the European Parliament and of the Council 4 into Lithuanian law. 

1.2  The  draft laws implement the requirement under Directive  (EU) 2025/1 that each Member  State  must 

designate,  for  insurance  and  reinsurance  undertakings,  one  or  more  resolution  authorities 5  that  are 

empowered to apply resolution tools and exercise resolution powers. The draft laws designate Lietuvos 

bankas for this purpose 6.  

1.3  The draft laws set out the rules relating, inter alia, to: (a) the liability regime applicable to Lietuvos bankas 

in  the  exercise  of  its  functions  as  the  resolution  authority  for  insurance  sector  undertakings;  (b)  the 

1  

2  

3  

4  

5  
6  

Draft law on Lietuvos bankas: Lietuvos Respublikos Lietuvos banko įstatymo Nr. I-678 8, 11, 211, 43, 433 straipsnių, 2 ir 3 
priedų pakeitimo įstatymas, TAR, 26-2357, 2026-02-17. 

Draft resolution insurance law: Lietuvos Respublikos draudimo ir perdraudimo įmonių gaivinimo ir pertvarkymo sistemos 
įstatymas, TAR, 26-2356, 2026-02-17. 

Council  Decision  98/415/EC  of  29 June  1998  on  the  consultation  of  the  European  Central  Bank  by  national  authorities 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42, ELI: http://data.europa.eu/eli/dec/1998/415/oj). 
Directive (EU) 2025/1 of the European Parliament and of the Council of 27 November 2024 establishing a framework for 
the recovery and resolution of insurance and reinsurance undertakings and amending Directives 2002/47/EC, 2004/25/EC, 
2007/36/EC, 2014/59/EU and (EU) 2017/1132 and Regulations (EU) No 1094/2010, (EU) No 648/2012, (EU) No 806/2014 
and (EU) 2017/1129 (OJ L, 2025/1, 8.1.2025, ELI: http://data.europa.eu/eli/dir/2025/1/oj). 

See Article 3 of Directive (EU) 2025/1.  
See Article 3(1) of the draft law on insurance resolution. 

 
 
 
 
 
ECB-PUBLIC 

financing of the activities of Lietuvos bankas in its capacity as the resolution authority for insurance sector 

undertakings; and (c) the financing of resolution actions and the resolution fund. 

1.4  The draft law on insurance resolution provides that the relevant provisions of the Law on Lietuvos bankas 7 

apply mutatis mutandis both to compensation for damage resulting from unlawful actions of the resolution 

authority or its employees in connection with the implementation of resolution actions or the performance 

of other functions assigned under that law, and to the reimbursement of costs incurred in connection with 

proceedings or claims brought against employees of the resolution authority 8. Pursuant to the Law on 

Lietuvos  bankas,  damage  resulting  from  unlawful  actions  of  Lietuvos  bankas  or  its  staff  members  in 

connection with the performance of financial market supervision is compensated only where the person 

that has suffered damage proves that the damage was caused intentionally or by gross negligence on 

the part of Lietuvos bankas or its staff members 9.   

1.5  The draft law on Lietuvos bankas provides that the provisions governing the financing of the activities of 

the resolution authority for financial sector entities apply mutatis mutandis to the resolution authority for 

insurance sector entities 10. Consequently, the model under which the activities of the resolution authority 

for financial sector entities are financed through contributions paid by financial market participants 11 would 

also apply in respect of insurance sector entities. The basis for calculating the contribution, together with 

the maximum contribution rate, of each market participant is set out in the draft law on Lietuvos bankas 12. 

The annual contribution level is to be established by Lietuvos bankas 13. For insurance sector entities, 

contributions are to be calculated by reference to insurance and reinsurance premiums under contracts 

concluded in Lithuania and are subject to a maximum rate of 0,065 % 14. 

1.6  Under the draft law on insurance resolution, resolution actions are to be financed from the cash and/or 

other liquid assets of the entity subject to resolution 15. The resolution fund that is to be established for the 

purpose  of  financing  resolution  actions  will  be  financed  through  contributions  by  insurance  and 

reinsurance  undertakings,  in  addition  to  loans  and  default  interest  paid  by  insurance  and  reinsurance 

undertakings16.  

2. 

Liability of Lietuvos bankas as a resolution authority for insurance and reinsurance undertakings 

2.1  The ECB understands that, by applying the relevant provisions of the Law on Lietuvos bankas 17 mutatis 

mutandis to the performance of resolution functions under the draft law on insurance resolution, the draft 

laws  establish  a  limited  liability  regime  for  Lietuvos  bankas  when  acting  as  resolution  authority  for 

insurance and reinsurance undertakings. Accordingly, Lietuvos bankas is liable for damage resulting from 

unlawful actions only in cases of intent or gross negligence.  

7  

8  
9  
10  
11  
12  
13  
14  
15  
16  
17  

See Article 45(1) of the Law on Lietuvos bankas: Lietuvos Respublikos Lietuvos banko įstatymas. Valstybės žinios, 1994, 
Nr. 99-1957.  

See Article 67(8) of the draft law on insurance resolution. 
See Article 45(1) of the Law on Lietuvos bankas. 
See Article 211(7) of the draft law on Lietuvos bankas. 
See Article 211(1) of the Law on Lietuvos bankas. 
See Article 211(7), and Annex 2, of the draft law on Lietuvos bankas. 
See Article 211(2) of the Law on Lietuvos bankas. 
See Article 211(7) and Annex 2, paragraph 6, of the draft law on Lietuvos bankas. 
See Article 28(8) of the draft law on insurance resolution. 

See Article 69(2) and (3) of the draft law on insurance resolution. 
See Article 45(1) of the Law on Lietuvos bankas. 

2 

 
 
 
 
ECB-PUBLIC 

2.2  The ECB understands that this limited liability regime differs from the general rule on public liability under 

Lithuanian civil law. Under the Civil Code, damage caused by unlawful acts of public authorities must be 

compensated by the State from the State budget irrespective of fault18. Under this general rule, public 

liability  arises  where  three  conditions  are  met:  there  is  an  unlawful  act  of  a  public  authority,  damage 

occurs, and there is a causal link between the unlawful act and the damage19. By contrast, under the 

limited liability regime established by the draft law on insurance resolution, a person that has suffered 

damage  would  be  required  to  prove  not  only  unlawfulness,  damage  and  causation,  but  also  intent  or 

gross negligence.  

2.3  The ECB understands that Lithuanian case-law has not always been entirely consistent as regards the 

relationship  between  the  limited  liability  regime  under  the  relevant  provisions  of  the  Law  on  Lietuvos 

bankas 20 and the general public liability regime under the Civil Code21. In certain cases, the courts have 

taken  the  view  that  the  general  no-fault  public  liability  regime  under  the  Civil  Code  should  prevail  in 

respect  of  Lietuvos  bankas22.  However,  the  most  recent  case-law  has  taken  a  different  approach, 

recognising the limited liability applicable to Lietuvos bankas as a lex specialis in relation to the no-fault 

public  liability  regime  where  damage  is  alleged  to  have  been  caused  by  Lietuvos  bankas  or  its  staff 

members 23. Also, in 2025, the constitutionality of the relevant provisions of the Law on Lietuvos bankas 24 
was  again  raised  before  the  Court,  but  this  issue  was  not  addressed  in  its  judgment25.  Against  this 

background, the ECB understands that the current case-law supports the application of the limited liability 

regime laid down in the relevant provisions of the Law on Lietuvos bankas in the context of the draft law 

on insurance resolution. 

3. 

Specific observations 

3.1 

In  accordance  with  Article  14.4  of  the  Statute  of  the  European  System  of  Central  Banks  and  of  the 

European  Central  Bank,  the  national  central  banks  (NCBs)  may  perform  functions  other  than  those 

specified  in  that  Statute,  unless  the  Governing  Council  finds  that  those  functions  interfere  with  the 

objectives and tasks of the European System of Central Banks. Where a Member State assigns such a 

function to its NCB, that NCB is responsible and liable for its performance. Nevertheless, when defining 

the responsibility and liability of an NCB in relation to that function, Member States are required to comply 

with their obligations deriving from Union law and, in particular, Article 123(1) of the Treaty 26. 

3.2  Article 123(1) of the Treaty prohibits the NCBs from granting overdraft facilities or any other type of credit 

facility to public authorities and bodies of the Member States. Article 1(1), point (b), of Council Regulation 

No 3603/93 27 defines the term ‘other type of credit facility’ for the purposes of Article 123 of the Treaty 

18  
19  
20  
21  
22  
23  

24  
25  
26  

27  

See Article 6.271 of the Civil Code, Lietuvos Respublikos civilinis kodeksas. Valstybės žinios, 2000, Nr. 74-2262. 
See Article 6.271(1) of the Civil Code, Lietuvos Respublikos civilinis kodeksas. Valstybės žinios, 2000, Nr. 74-2262. 

See Article 45(1) of the Law on Lietuvos bankas. 
See Article 6.271 of the Civil Code. 
See Decision of Vilnius Regional Administrative Court, of 2 September 2013, proc. No. I-2737-624/2013.  

See Decision of Supreme Administrative Court of Lithuania, of 8 November 2016, proc. No. A-1690-492/2016; Decision of 
Supreme Administrative Court of Lithuania, of 6 April 2021, proc. No. eA-425-822/2021.  

See Article 45(1) of the Law on Lietuvos bankas. 
See Decision of Supreme Administrative Court of Lithuania, of 17 September 2025, proc. No. eA-111-520/2025.  

See judgment of 13 September 2022, Banka Slovenije, C-45/21, ECLI:EU:C:2022:670, paragraphs 53, 54, 57 and 97. See 
also paragraph  2.2.1 of  Opinion  CON/2023/17,  paragraph 3.1  of  Opinion  CON/2024/31  and paragraph 3.2.2  of  Opinion 
CON/2026/1. All ECB opinions are published on EUR-Lex. 
Council  Regulation  (EC)  No  3603/93  of  13  December  1993  specifying  definitions  for  the  application  of  the  prohibitions 
referred 
(OJ  L  332,  31.12.1993,  p.  1,  ELI: 
http://data.europa.eu/eli/reg/1993/3603/oj). 

in  Articles  104  and  104b 

the  Treaty 

(1)  of 

to 

3 

 
 
 
 
ECB-PUBLIC 

as, inter alia, any financing of the public sector’s obligations vis-à-vis third parties. Accordingly, the NCB 

concerned must not assume obligations vis-à-vis third parties that could potentially be incumbent on the 

public sector. Consequently, the NCB concerned must not finance pre-existing obligations vis-à-vis third 

parties  that  are  incumbent  on  other  public  authorities  or  bodies  and  the  effective  financing  of  the 

obligations  vis-à-vis  third  parties  by  the  NCB  concerned  must  not  result  directly  from  the  measures 

adopted by, or from the policy choices made by, other public authorities or bodies 28.  

3.3  The ECB notes that while the draft laws do not impose any financing obligations on Lietuvos bankas, the 

designation  of  Lietuvos  bankas  as  resolution  authority  for  insurance  and  reinsurance  undertakings 

requires that the conditions under which Lietuvos bankas is to exercise this function are in line with the 

above limitations deriving from Article 123(1) of the Treaty. In particular, the liability of Lietuvos bankas 

when exercising the function of resolution authority for insurance and reinsurance undertakings must be 

limited to infringements of a serious nature of the rules imposed on Lietuvos bankas in that context 29. The 

ECB understands that the specific liability regime under the Law on Lietuvos bankas applies in this regard. 

That regime provides for liability resulting from unlawful actions of Lietuvos bankas or its staff members 

only where the person that has suffered damage proves that the damage was caused intentionally or by 

gross negligence on the part of Lietuvos bankas or its staff members. The ECB notes that the existence 

of  gross  negligence  must  be  assessed  taking  into  account  the  specific  circumstances  of  resolution  of 

insurance  and  reinsurance  undertakings,  including  the  urgency  faced  by  Lietuvos  bankas  or  its  staff 

members and the complexity of the specific case at hand30. These limitations address the requirement 

that the liability of Lietuvos bankas when exercising the function of resolution authority for insurance and 

reinsurance undertakings must be limited to infringements of a serious nature. 

This opinion will be published on EUR-Lex. 

Done at Frankfurt am Main, 2 July 2026. 

[signed] 

The President of the ECB 

Christine LAGARDE 

28  

29  

30  

See judgment of 13 September 2022, Banka Slovenije, C-45/21, ECLI:EU:C:2022:670, paragraphs 67 to 75 and 84. See 
also paragraph 2.2.2 of Opinion CON/2023/17, paragraph 3.2.1 of Opinion CON/2024/31 and paragraph 3.2.3 of Opinion 
CON/2026/1.  

See judgment of 13 September 2022, Banka Slovenije, C-45/21, ECLI:EU:C:2022:670, paragraph 75. See also paragraph 
2.2.3 of Opinion CON/2023/17, paragraph 3.2.2 of Opinion CON/2024/31 and paragraph 3.2.4 of Opinion CON/2026/1. 

See paragraph 2.2.3 of Opinion CON/2023/17, paragraph 3.2.3 of Opinion CON/2024/31 and paragraph 3.2.5 of Opinion 
CON/2026/1.  

4