CELEX ID: 32025L0001

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Document:
Official Journal 
of the European Union
EN
L series
2025/1
8.1.2025
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
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national parliaments,
Having regard to the opinion of the European Economic and Social Committee 
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,
Acting in accordance with the ordinary legislative procedure 
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,
Whereas:
(1)
Distress of insurance undertakings can have substantial repercussions on the economy and social welfare in Member States should such distress lead to a disruption of the protection provided to policy holders, beneficiaries or injured parties. The role of reinsurance undertakings in the economy, their interconnectedness with primary insurance undertakings and financial markets more broadly, as well as the relatively concentrated reinsurance market require an appropriate framework to deal with their distress or failure in an orderly fashion. The recovery and resolution of both primary insurance undertakings and reinsurance undertakings should therefore be addressed, taking into account their respective specificities.
(2)
The global financial crisis of 2008 exposed the vulnerabilities of the financial sector and its interconnectedness. Causes of distress and failure appeared to be linked to, inter alia, the evolution of financial markets and the intrinsic nature of insurance or reinsurance activities. In that regard, underwriting risks, that is under-provisioned claims, mispricing, that is underestimated premiums, asset-liability mismanagement and investment losses are often referred to as main sources of concern for insurance and reinsurance undertakings. In that context, taxpayer money has been used to restore the deteriorated financial conditions of several insurance undertakings. Although Directive 2009/138/EC of the European Parliament and of the Council 
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 aimed at strengthening the financial system in the Union and the resilience of insurance and reinsurance undertakings, it did not completely eliminate the possibility of failures of such insurance and reinsurance undertakings. High market volatilities and prolonged low levels of interest rates could be particularly harmful for the profitability and solvency position of insurance and reinsurance undertakings. The sensitivity of insurance and reinsurance undertakings to market and economic developments therefore calls for particular caution and an adequate framework to manage, including in a pre-emptive manner, potential deteriorations of the financial position of such undertakings. Some recent failures and near-failures, in particular of a cross-border nature, illustrated weaknesses of the current framework that need to be addressed to organise adequately the orderly exit from the market of insurance or reinsurance undertakings.
(3)
Activities, services or operations performed by insurance or reinsurance undertakings that cannot be substituted easily within a reasonable timeframe, or at a reasonable cost for policy holders, beneficiaries or injured parties, need to be seen as critical functions that need to be continued. Such activities, services or operations can be critical at Union, national or regional level. The continuity of insurance or reinsurance protection is often preferable to the winding down of a failing undertaking as such continuity delivers the most favourable outcome for policy holders, beneficiaries or injured parties. It is therefore crucial that adequate tools be available to prevent failures and, where failures occur, to minimise negative repercussions by preserving the continuity of those critical functions.
(4)
Ensuring effective resolution of failing insurance and reinsurance undertakings within the Union is an essential element in the completion of the internal market. The failure of such undertakings has an impact not only on policy holders and possibly the real economy and financial stability of the markets on which those insurance and reinsurance undertakings operate directly, but also on the trust in the internal market for insurance. The completion of the internal market in financial services has reinforced the interplay between the different national financial systems. Insurance and reinsurance undertakings are active on financial markets to manage their investment portfolio and the risks related to their activities. In that context, the inability of Member States to address the failure of an insurance or reinsurance undertaking and resolve it in a way that is predictable and harmonised and would effectively prevent broader systemic damage, can undermine the stability of financial markets and, consequently, the internal market in the field of financial services.
(5)
The global financial crisis of 2008 highlighted the need to develop an appropriate recovery and resolution framework for insurance and reinsurance undertakings. At international level, the Financial Stability Board published in October 2011, and updated in October 2014, the document ‘Key Attributes of Effective Resolution Regimes for Financial Institutions’, encompassing considerations on the resolution of any insurance undertaking that could be systemically significant or critical if it fails. In June 2016, the Financial Stability Board released complementary guidance on developing effective resolution strategies and plans for systemically important insurers. In parallel, the International Association of Insurance Supervisors adopted in November 2019 ‘Insurance Core Principles’ for all insurance and reinsurance undertakings, a ‘Common Framework for Internationally Active Insurance Groups’ detailing standards for pre-emptive recovery planning, and actions that authorities are expected to take towards an insurance or reinsurance undertaking that would exit the market and enter into resolution. Those developments should be taken into account when laying down a framework for the recovery and resolution of failing insurance and reinsurance undertakings.
(6)
Many insurance and reinsurance undertakings are operating beyond national borders. A lack of coordination and cooperation between public authorities to prepare for and manage the distress or failure of an insurance or reinsurance undertaking operating across borders would undermine Member States’ mutual trust, result in a suboptimal outcome for policy holders, beneficiaries and injured parties and affect the credibility of the internal market for insurance.
(7)
There is currently no harmonisation of the procedures at Union level for resolving insurance or reinsurance undertakings in a coordinated manner. Instead, considerable substantive and procedural differences between national laws, regulations and administrative provisions that govern the failure of insurance and reinsurance undertakings are observed across Member States. In addition, corporate insolvency procedures might not always be appropriate for insurance or reinsurance undertakings, as those procedures might not always ensure an adequate continuation of the critical functions for the benefit of policy holders, beneficiaries and injured parties, the real economy or financial stability as a whole.
(8)
It is necessary to ensure the continuity of the critical functions of failing insurance or reinsurance undertakings, or of insurance or reinsurance undertakings that are likely to fail, while minimising the impact of such an undertaking’s failure on the economy or the financial system. It is therefore necessary to lay down a framework to provide authorities with a credible set of tools to intervene sufficiently early and quickly in insurance or reinsurance undertakings that are failing or likely to fail. Such framework should ensure that shareholders bear losses first and that creditors bear losses after shareholders, provided that no creditor incurs greater losses than they would have incurred if the insurance or reinsurance undertaking had been wound up under normal insolvency proceedings in accordance with the principle that no creditor should be worse off than under normal insolvency proceedings (the ‘no creditor worse off’ principle). In order to ensure that the treatment that affected shareholders, policy holders, beneficiaries, claimants and other creditors would have received if the undertaking under resolution had entered into normal insolvency proceedings is accurately reflected, all the relevant occurrences that would be triggered either by or before the opening of normal insolvency proceedings as well as all the relevant occurrences related to the opening of such proceedings, including those linked to the protection of injured parties under Directive 2009/103/EC of the European Parliament and of the Council 
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 in respect of damage resulting from accidents in the case of the insolvency of an insurance undertaking, should be taken into account.
(9)
Building on Directive 2009/138/EC, the framework to be laid down should enable authorities to ensure the continuity of insurance protection for policy holders, beneficiaries and injured parties, transfer viable activities and portfolios of the insurance or reinsurance undertaking where appropriate, and apportion losses in a manner that is fair and predictable. Those objectives should help avoid unnecessary losses or social hardship falling on policy holders, beneficiaries and injured parties, mitigate negative impacts on the real economy, minimise negative effects on financial markets and minimise the costs for taxpayers.
(10)
The review of Directive 2009/138/EC, and in particular the introduction of more risk-sensitive capital requirements, strengthened supervision, enhanced liquidity monitoring and better tools for macro-prudential policies, should further reduce the likelihood of failures of insurance or reinsurance undertakings and enhance the resilience of those undertakings to economic stress, whether caused by systemic disturbances or by events specific to the individual undertaking. Nevertheless, despite a sound and robust prudential framework, situations of financial distress cannot be completely excluded. Member States should therefore be prepared and have adequate recovery and resolution tools in place to handle situations involving both systemic crises and failures of individual undertakings. Such tools should include mechanisms that enable authorities to deal effectively with undertakings that are failing or likely to fail. The use of such tools and the exercise of such powers should take into account the circumstances in which the failure occurs.
(11)
Some Member States have already introduced pre-emptive recovery planning requirements, and mechanisms to resolve failing insurance or reinsurance undertakings. However, the absence of common conditions, powers and processes for the recovery and resolution of insurance or reinsurance undertakings across the Union is likely to constitute a barrier to the smooth operation of the internal market and hinder cooperation between national authorities when dealing with distressed or failing cross-border groups of undertakings. That is particularly true where different approaches mean that national authorities do not have the same level of control or the same ability to resolve insurance or reinsurance undertakings. Those differences in recovery and resolution regimes might affect the level playing field and potentially create distortions of competition between undertakings. That barrier should be eliminated and rules should be adopted to ensure that the internal market is not undermined. To that end, rules governing the pre-emptive recovery and resolution of insurance or reinsurance undertakings should be made subject to common minimum harmonisation rules. In order to ensure consistency with existing Union legislation in the area of insurance services, the pre-emptive recovery and resolution regime should apply to insurance or reinsurance undertakings that are subject to the prudential requirements laid down in Directive 2009/138/EC.
(12)
The failure of an entity affiliated to a group can rapidly impact the solvency and the operations of the whole group. It is therefore necessary to have in place group pre-emptive recovery and resolution planning requirements. In addition, authorities should possess effective means of action with respect to those entities to impose remedial actions that take into account the financial soundness of all group entities, 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. The pre-emptive recovery and resolution planning and resolvability requirements and the resolution regime should therefore also apply to parent undertakings, holding companies and other group entities, including branches of insurance and reinsurance undertakings that are established outside the Union.
(13)
In order to ensure that recovery and resolution planning and actual resolution of insurance and reinsurance undertakings that are part of financial conglomerates or insurance groups that are themselves financial conglomerates or are parts of financial conglomerates can occur smoothly, and with the objective of reducing the administrative burden, information-sharing obligations between insurance and banking resolution and supervisory authorities should be established and the banking resolution authority should be granted the status of observer in the insurance resolution college for an insurance group that is, or is part of, a financial conglomerate in accordance with Directive 2002/87/EC of the European Parliament and of the Council 
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, and vice versa.
(14)
With the new rules introduced by this Directive, insurance and reinsurance resolution authorities, and banking resolution authorities, will each have their own framework for resolution that is adapted to the specificities of the insurance and reinsurance sectors as well as the banking sector. The timescale of a resolution in an insurance and reinsurance context is different from a resolution in a banking context. In order to prevent a bank run, the Single Resolution Board and national banking resolution authorities typically need to act swiftly. Insurance and reinsurance resolution authorities, on the other hand, often have the benefit of having more time to find the proper solutions that are most beneficial for policy holders. An event similar to a bank run is less likely to happen in the insurance and reinsurance sector, and the consequences of such an event would be different than in the banking sector.
(15)
Both sectoral legislative frameworks have created independent decision-making powers for the respective authorities. Consequently, the insurance and reinsurance and banking resolution authorities should act on an equal footing. For the performance of the resolution tasks, it is paramount that the insurance and reinsurance and banking resolution authorities inform one another and cooperate in good faith. The information-sharing requirements prescribed by this Directive should facilitate that cooperation. Therefore, the insurance and reinsurance and banking resolution authorities as well as the respective insurance and reinsurance and banking supervisory authorities should, without delay, exchange information considered necessary for the performance of their respective tasks.
(16)
In order to ensure that resolution authorities are kept informed and consulted sufficiently early in the process and in a structured way which allows them to exercise their mandate in an informed and consistent way, insurance and reinsurance and banking resolution authorities should be invited as observers to each other’s resolution colleges. This is particularly important in the context of pre-emptive recovery planning and resolution planning as well as for the assessment of whether the conditions for resolution are met and, finally, when taking resolution actions in relation to one or more entities that are part of financial conglomerates. To build on the experience gained, the Commission should review the relevant provisions of this Directive by five years after its entry into force.
(17)
It is necessary to ensure the suitability and effectiveness of the recovery and resolution framework while avoiding unnecessary administrative burdens and costs on undertakings and authorities. The implementation of such recovery and resolution framework should therefore be proportionate to the nature, scale and complexity of the undertaking concerned, and of its activities and services. In addition, the differences between recovery on the one hand and resolution on the other, should be taken into account. Regarding the scope of the recovery and resolution planning requirements, authorities should determine, on the basis of sets of risk-based criteria, which undertakings are subject to the fully-fledged or simplified planning requirements. To foster trust in the insurance and reinsurance single market and to foster a level playing field, a minimum degree of preparedness should be achieved through laying down a minimum market coverage level for the life insurance and reinsurance market and for the non-life insurance and reinsurance market. Regarding the scope of the resolution planning requirements, authorities should determine for which undertakings it is more likely relative to other undertakings under their remit that resolution action would be in the public interest in the event of failure or which undertakings carry out critical functions.
(18)
For the same reason, authorities should, where appropriate, apply different or reduced pre-emptive recovery and resolution planning and information requirements on an undertaking-specific basis, and require updates at a lower frequency. Authorities should, when applying such simplified obligations, take into account the nature, size, complexity and substitutability of an undertaking’s business, its shareholding structure and legal form, its risk profile and its degree of interconnectedness to other regulated undertakings or to the financial system in general. Authorities should also take into account whether the failure and subsequent winding-up of the insurance or reinsurance undertaking under normal insolvency proceedings would be likely to have a significant negative effect on policy holders, financial markets, other undertakings, or the wider economy. Authorities should report to the European Supervisory Authority (European Insurance and Occupational Pensions Authority) (EIOPA), established by Regulation (EU) No 1094/2010 of the European Parliament and of the Council 
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, on the application of such simplified obligations on an annual basis.
(19)
For an orderly resolution process, and to avoid conflicts of interest, Member States should appoint public administrative authorities or authorities entrusted with public administrative powers to perform the functions and tasks in relation to the recovery and resolution framework. Member States should ensure that adequate resources are allocated to those resolution authorities. Where a Member State designates a resolution authority that has other functions, adequate structural arrangements should be put in place to separate those functions from the functions related to resolution and to ensure operational independence. Such separation should not prevent the resolution function from having access to any information it requires for the exercise of its duties under the recovery and resolution framework, or for cooperation between different authorities involved in the application of the recovery and resolution framework.
(20)
In light of the consequences that the failure of an insurance or reinsurance undertaking could have on policy holders, the financial system and the economy of a Member State, and in light of the possible need to use public funds to deal with such failure, the ministries of finance or other relevant ministries in the Member States should be closely involved, at an early stage, in the process of crisis management and resolution.
(21)
It is essential that groups, or where applicable, individual undertakings, prepare and regularly update pre-emptive recovery plans that set out actions to be taken by those groups or undertakings to restore their financial position following a significant deterioration of that position that could pose a risk to their viability. Insurance and reinsurance undertakings should therefore identify a set of quantitative and qualitative indicators that would trigger the activation of remedial actions envisaged in such pre-emptive recovery plans. Such indicators should help insurance and reinsurance undertakings to take remedial actions in the best interest of their policy holders in line with the undertakings’ risk management systems and should not lay down new regulatory prudential requirements. This Directive should, therefore, neither preclude undertakings from including in their pre-emptive recovery plans nor require undertakings to include in their pre-emptive recovery plans points of deterioration of the capital position that would precede non-compliance with the Solvency Capital Requirement laid down in Title I, Chapter VI, Section 4, of Directive 2009/138/EC. Pre-emptive recovery plans covering all material legal entities within the group should be detailed and should be based on realistic assumptions that are applicable in a range of robust and severe scenarios. Those pre-emptive recovery plans should be an integral part of an undertaking’s system of governance. Existing tools may be taken into account when preparing such pre-emptive recovery plans, including the own risk and solvency assessment, contingency plans or liquidity risk management plans. The requirement to prepare a pre-emptive recovery plan should, however, be applied proportionately and should be without prejudice to the development and submission of a realistic recovery plan as required by Article 138(2) of Directive 2009/138/EC. Where relevant, the elements of the pre-emptive recovery plan could inform or serve as a basis to develop the recovery plan required by Article 138(2) of Directive 2009/138/EC.
(22)
It is necessary to ensure an adequate degree of preparedness for crisis situations. Ultimate parent undertakings or individual insurance or reinsurance undertakings should therefore be required to submit their pre-emptive recovery plans to supervisory authorities for a complete assessment, including the assessment of whether those plans are comprehensive and could feasibly restore an undertaking or group’s viability in a timely manner, even in periods of severe financial stress. Where an undertaking presents a pre-emptive recovery plan that is not adequate, supervisory authorities should be empowered to require that undertaking to take measures necessary to redress the material deficiencies of the plan.
(23)
Resolution planning is an essential component of an effective resolution process. Resolution authorities should therefore have all the information necessary to identify critical functions and ensure their continuation. Insurance and reinsurance undertakings have privileged knowledge of their own functioning and any problems arising from it, and resolution authorities should therefore draw up resolution plans on the basis of, inter alia, the information provided by the undertakings concerned. In order to avoid unnecessary administrative burdens, resolution authorities should primarily retrieve the necessary information from the supervisory authorities.
(24)
Small and non-complex undertakings should not be obliged to draw up separate pre-emptive recovery plans, nor should they be subject to resolution planning, except where such an undertaking represents a particular risk at national or regional level.
(25)
In order to anticipate the possible interaction of remedial and resolution measures and to enhance the crisis preparedness and the resolvability of groups, any group treatment for pre-emptive recovery and resolution planning should apply to all group entities subject to group supervision. The pre-emptive recovery and resolution plans should take into account the financial, technical and business structure of the group concerned and its degree of internal interconnectedness.
(26)
Group pre-emptive recovery and resolution plans should be prepared for the group as a whole and should identify measures in relation to both an ultimate parent undertaking and individual subsidiary undertakings that are part of that group. The extent to which subsidiary undertakings are considered in the group pre-emptive recovery and resolution plans should, however, be proportionate to their relevance to the group and to policy holders, the real economy and the financial system in the Member States where those subsidiary undertakings operate. The resolution authorities of the Member States where a group has subsidiary undertakings should be involved in the drawing up of any resolution plans. The authorities concerned, acting within the supervisory or resolution colleges, should make every effort to reach a joint decision on the assessment and adoption of those plans. However, adequate crisis preparedness should not be affected by an absence of a joint decision within the supervisory or resolution colleges. In such cases, each supervisory authority responsible for a subsidiary undertaking should be able to require a pre-emptive recovery plan for the subsidiary undertakings under its jurisdiction and make its own assessment of the pre-emptive recovery plan. For the same reasons, each resolution authority responsible for a subsidiary undertaking should, for the subsidiary undertakings under its jurisdiction, draw up and keep updated a resolution plan. The drawing up of individual pre-emptive recovery and resolution plans for undertakings that are a part of a group should remain exceptional, duly justified and apply the same standards that are applied to comparable undertakings in the Member State concerned. Where individual pre-emptive recovery and resolution plans for undertakings that are a part of a group are prepared, the authorities concerned should aim to achieve, to the extent possible, consistency with pre-emptive recovery and resolution plans for the rest of the group.
(27)
Resolution authorities that do not disagree with a joint decision can reach a joint decision among themselves on a group resolution plan, as well as on the identification of substantive impediments and, where necessary, on the assessment of the measures proposed by the ultimate parent undertaking and the measures required by the authorities in order to address or remove the impediments.
(28)
In order to keep all authorities concerned fully and permanently informed, supervisory authorities should transmit any pre-emptive recovery plans and any changes thereto to the resolution authorities concerned and resolution authorities should transmit any resolution plans and any changes thereto to the supervisory authorities concerned.
(29)
On the basis of an assessment of the resolvability of insurance or reinsurance undertakings, resolution authorities should have the power to require, either directly or indirectly through the supervisory authority, that insurance or reinsurance undertakings change their structure and organisation. Resolution authorities should also be able to take necessary but proportionate measures to reduce or remove any substantive impediments to the application of resolution tools and to ensure the resolvability of the entities concerned. Resolution authorities should assess the resolvability of insurance or reinsurance undertakings at the level of those undertakings where it is expected that, in accordance with the group resolution plan, resolution actions would be taken. The resolution authorities’ ability to request changes to the structure and organisation of an insurance or reinsurance undertaking, or to take measures to reduce or remove any material impediments to the application of resolution tools and to ensure the resolvability of the undertakings concerned, should not go beyond what is necessary to simplify the structure and operations of the insurance or reinsurance undertaking concerned in order to improve that undertaking’s resolvability.
(30)
The implementation of actions outlined in a pre-emptive recovery plan or a resolution plan might have effects on staff of insurance or reinsurance undertakings. Those plans should therefore contain procedures for informing and consulting employee representatives throughout the recovery and resolution processes where appropriate. Those procedures should take into account collective agreements, other arrangements provided for by social partners, and national and Union law on the involvement of trade unions and workers’ representatives in company restructuring processes.
(31)
Effective recovery and resolution of insurance and reinsurance undertakings or group entities operating across the Union requires cooperation among supervisory authorities and resolution authorities within colleges of supervisors and resolution colleges at all stages of the process, from the preparation of pre-emptive recovery and resolution plans to the actual resolution of an undertaking. Where authorities disagree on decisions to be taken with regard to groups and undertakings, EIOPA should, as a last resort, play a mediation role.
(32)
During the recovery and preventive phases, shareholders should retain full responsibility and control of the insurance or reinsurance undertaking. They should no longer retain such a responsibility once the undertaking has been put under resolution. The resolution framework should therefore provide for a timely entry into resolution, that is before an insurance or reinsurance undertaking is balance sheet or cash flow insolvent, before all equity has been fully wiped out, or before the insurance or reinsurance undertaking is unable to comply with its payment obligations as they come due. Resolution should be initiated where a supervisory authority, after having consulted the resolution authority, or a resolution authority, after having consulted the supervisory authority, determines that an insurance or reinsurance undertaking is failing or likely to fail and alternative measures would not prevent such a failure within a reasonable timeframe. An insurance or reinsurance undertaking should be considered to be failing or likely to fail in any of the following circumstances: (i) where the undertaking breaches or is likely to be in breach of the Minimum Capital Requirement laid down in Title I, Chapter VI, Section 5, of Directive 2009/138/EC and where there is no reasonable prospect of compliance being restored; (ii) where the undertaking no longer fulfils the conditions for authorisation or where the undertaking fails seriously to comply with its legal obligations under the laws and regulations to which it is subject or is likely to seriously fail to comply with its legal obligations under the laws and regulations to which it is subject in the near future in a way that would justify the withdrawal of the authorisation; (iii) where the assets of the insurance or reinsurance undertaking are or there are objective elements to support a determination that the assets of the undertaking will, in the near future, be less than its liabilities; (iv) where the insurance or reinsurance undertaking is or is likely to be unable to pay its debts or other liabilities in the near future, including payments to policy holders or beneficiaries as they fall due; or (v) where the insurance or reinsurance undertaking requires extraordinary public financial support.
(33)
In order to provide for a clear delineation of responsibilities between supervisory and resolution authorities, it should be specified that, once resolution action has been taken by the resolution authority, it is the resolution authority that becomes ultimately responsible for the effective implementation of such resolution action. From that moment in time, the supervisory authority should therefore refrain from adopting any measures with respect to the undertaking under resolution without the prior agreement of the resolution authority. Similarly, the resolution authority should have the power to terminate, in the context of resolution action, any measure taken by the supervisory authority where the continuation of that measure would hinder the application of resolution tools.
(34)
The use of resolution tools and powers might disrupt the rights of shareholders and creditors of insurance and reinsurance undertakings. In particular, the power of the resolution authorities to transfer the shares or all or part of the assets of an insurance or reinsurance undertaking to a private purchaser without the consent of shareholders affects the property rights of shareholders. In addition, the power to decide which liabilities to transfer out of a failing undertaking to ensure the continuity of services and to avoid adverse effects on policy holders, beneficiaries and injured parties, the real economy or financial stability as a whole might affect the equal treatment of creditors. Any resolution tool should therefore be applied only to those insurance or reinsurance undertakings that are failing or likely to fail, and only where it is necessary and proportionate to pursue the resolution objectives in the general interest giving due consideration to the objective of protection of the collective interest of policy holders, beneficiaries and claimants. The individual interest of a particular person or group should not prevail over the overall balance of the collective interest of policy holders, beneficiaries and claimants of the undertaking concerned.
(35)
In particular, resolution tools should be applied only where the insurance or reinsurance undertaking cannot be wound up under normal insolvency proceedings without unduly affecting the protection of policy holders, beneficiaries and claimants, destabilising the financial system or preventing the rapid transfer and continuation of critical functions and where there is no reasonable prospect for any alternative private solution, including any increase of capital by the existing shareholders or by any third party sufficient to restore the full viability of the entity without having effect on insurance or reinsurance claims. Insurance guarantee schemes applicable to an undertaking that meets the conditions for insolvency proceedings or resolution should be taken into account when determining if the application of resolution tools is necessary in the public interest. Any interference with the rights of shareholders and creditors that results from resolution action should be compatible with the Charter of Fundamental Rights of the European Union (the ‘Charter’). In particular, where creditors within the same class are treated differently in the context of resolution action, such distinctions should be justified in the public interest and be proportionate to the risks being addressed and should be neither directly nor indirectly discriminatory on the grounds of nationality.
(36)
Resolution authorities should have a certain degree of flexibility to balance the resolution objectives taking into account as appropriate the nature and circumstances of each case.
(37)
When pursuing the resolution objectives, resolution authorities should assess the most appropriate way for minimising the costs of resolution. Minimising reliance on extraordinary public financial support is a resolution objective, but the use of such support also constitutes a cost of resolution. Cost minimisation should not, however, be considered a separate resolution objective, but rather a principle by which resolution authorities should be guided when deciding how best to achieve the resolution objectives.
(38)
When applying resolution tools and exercising resolution powers, resolution authorities should take all appropriate measures to ensure that resolution action is taken in accordance with the principle that insurance and reinsurance claims are affected after shareholders and other creditors have borne their share of the losses. In addition, resolution authorities should ensure that the costs of the resolution of insurance or reinsurance undertakings are minimised and that creditors of the same class are treated in an equitable manner.
(39)
The write-down or conversion of capital instruments, debt instruments and other eligible liabilities should provide for an internal loss-absorption mechanism. That mechanism, combined with transfer tools aimed at maintaining continuity of insurance coverage for the benefit of policy holders, beneficiaries and injured parties, should allow for the achievement of the resolution objectives and should limit to a great extent the impact of a failure of an insurance or reinsurance undertaking on policy holders. There could be extreme cases, however, where the resolution of an insurance or reinsurance undertaking requires the intervention of specific national schemes, in particular an insurance guarantee scheme or a resolution fund, to provide for complementary loss-absorbing and restructuring resources or, as a last resort, extraordinary public financing. The safeguards necessary to protect creditors should also reflect the existence of such specific national schemes, which in turn have to comply with the Union State aid framework. The write-down or conversion tool should be applied before the use of any extraordinary public financial support.
(40)
Interference with property rights should not be disproportionate. Affected shareholders, policy holders, beneficiaries, claimants and other creditors of insurance and reinsurance undertakings should therefore not incur greater losses than they would have incurred if the insurance or reinsurance undertaking had been wound up at the time that the resolution decision was taken. That ‘no creditor worse off’ principle is a reflection of the fundamental right to property protected by Article 17 of the Charter. That right should be protected in the administrative resolution procedure by ensuring that any affected shareholder, policy holder, beneficiary, claimant or other creditor is not worse off than under normal insolvency proceedings. The valuation of the treatment that policy holders, beneficiaries and injured parties would have received in such a case should include any payment that policy holders, beneficiaries and injured parties would have received from insurance guarantee schemes, where applicable, and from compensation bodies under Directive 2009/103/EC. In the event of a partial transfer of assets and liabilities of an insurance or reinsurance undertaking under resolution to a private purchaser or to a bridge undertaking, the residual part of the undertaking under resolution should be wound up under normal insolvency proceedings. Shareholders and creditors who are left in the winding-up proceedings of an insurance or reinsurance undertaking should be entitled to receive in payment of, or compensation for, their claims in the winding-up proceedings not less than what they would have recovered if the whole insurance or reinsurance undertaking had been wound up under normal insolvency proceedings.
(41)
To protect the rights of shareholders and creditors, including policy holders, beneficiaries and claimants, it is necessary to lay down clear obligations concerning the valuation of the assets and liabilities of the undertaking under resolution and concerning the valuation of the treatment that shareholders and creditors, including policy holders, beneficiaries and claimants, would have received if the undertaking had been wound up under normal insolvency proceedings. It is therefore necessary to lay down that, before any resolution action is taken, a fair and realistic valuation of the assets and liabilities of the insurance or reinsurance undertaking is carried out. Such a valuation should be subject to a right of appeal. However, due to the nature of resolution action and its close link with the valuation, such appeal should only be possible where it is simultaneously directed against the resolution decision. In addition, it is necessary to lay down that, after resolution tools have been applied, a comparison is made between the treatment that shareholders and creditors, including policy holders, beneficiaries and claimants, have actually received and the treatment they would have received under normal insolvency proceedings. That 
ex post
 comparison should be challengeable apart from the resolution decision. Shareholders and creditors that have received less than the amount that they would have received under normal insolvency proceedings should be entitled to the payment of the difference.
(42)
When resolution actions are taken, policy holders could retain some or all of the benefits provided in their contracts and would not necessarily have to conclude a new insurance contract. In cases where an undertaking is wound up under normal insolvency proceedings, a change of contract could entail replacement costs for policy holders. Especially for long term insurance contracts, market conditions and the policy holders’ own characteristics as well as additional costs such as brokerage and closing fees could lead to significant costs for policy holders having to replace their contracts. When estimating such replacement costs in the context of the ‘no creditor worse off’ principle, one has to assume that the conclusion of a new insurance contract with comparable cover available in the market against prevailing market rates takes place within a reasonable time from the date of resolution action.
(43)
It is important that losses be recognised upon the failure of an insurance or reinsurance undertaking. The valuation of assets and liabilities of failing insurance or reinsurance undertakings should be based on fair, prudent and realistic assumptions at the moment that resolution tools are applied. The value of liabilities should, however, not be affected in the valuation by the insurance or reinsurance undertaking’s financial state. Valuations for the purpose of informing the choice and the design of resolution actions should be consistent with the applicable prudential regulatory framework, but in the context of resolution targeted modifications to the principles underlying this framework could be made, in particular where the assumption that the undertaking will pursue its business as a going concern is not met. It should be possible, in exceptional cases of urgency, that resolution authorities make a rapid valuation of the assets or the liabilities of a failing insurance or reinsurance undertaking. That valuation should be provisional and should apply until an independent valuation is carried out. EIOPA should establish a framework of principles to be used in conducting such valuations and should allow for different specific methodologies to be applied by resolution authorities and independent valuers, as appropriate.
(44)
When taking resolution actions, resolution authorities should take into account and follow the measures provided for in the resolution plans unless resolution authorities assess, taking into account circumstances of the case, that resolution objectives will be achieved more effectively by taking actions that are not provided for in the resolution plans.
(45)
Resolution tools should be designed and suitable to counter a broad set of largely unpredictable scenarios, taking into account that there could be a difference between a single insurance or reinsurance undertaking in crisis and a broader systemic crisis. Resolution tools should therefore cover each of those scenarios, including the solvent run-off of the undertaking under resolution until its termination, the sale of the business or shares of the undertaking under resolution, the setting up of a bridge undertaking, the separation of assets and liabilities from the impaired or under-performing portfolios of the failing undertaking, and the write-down or conversion of capital instruments and other eligible liabilities of the failing insurance or reinsurance undertaking.
(46)
In specific cases, where certain group entities provide services to an undertaking under resolution which are essential for ensuring the continuity of insurance coverage, the resolution authority should have the power to ensure that the goods and services provided by such an essential service provider continue to be provided in cases where its financial position deteriorates as a result of the failing of an insurance or reinsurance undertaking within the same group and the use of such power is necessary to preserve the continuity of insurance coverage provided by other group entities. Those powers could include exercising resolution powers and applying resolution tools to the essential service provider.
(47)
Where resolution tools have been used to transfer insurance portfolios to a sound entity, which could be a private sector purchaser or a bridge undertaking, the residual part of the undertaking should be liquidated within an appropriate timeframe. The length of that timeframe should be based on the need for the failing insurance or reinsurance undertaking to provide services or support to enable the private sector purchaser or bridge undertaking to carry out the activities or services acquired by virtue of that transfer.
(48)
Financing arrangements should be established in each Member State to compensate policy holders, beneficiaries and claimants of insurance and reinsurance undertakings authorised in that Member State. Financing arrangements should be available to satisfy claims of shareholders and other creditors under the ‘no creditor worse off’ principle if that is necessary to avoid reliance on public funds. Those claims should be calculated in accordance with the creditor hierarchy in normal insolvency proceedings in order to prevent shareholders or other creditors from being compensated before policy holders, beneficiaries or claimants are fully compensated. While directly absorbing the losses of an insurance company should be avoided, it should be possible to use such financing arrangements to finance other costs associated with the use of resolution tools as a last resort, to the extent necessary to achieve the resolution objectives and insofar as the resolution principles are fully respected. Member States should be able to decide that financing arrangements could be used to absorb losses of policy holders, beneficiaries and claimants. In such a case, the failing undertaking would exit the market and all or part of the portfolios of insurance contracts would be transferred as part of the sale-of-business tool or to a bridge undertaking, or maintained in the undertaking under resolution if it is placed in solvent run-off. In any case, shareholders should have been written down before resolution financing arrangements could be used to absorb losses. Acknowledging the diversity in insurance markets, Member States should be given some flexibility in relation to the precise arrangements of external financing as long as the availability of sufficient liquidity to guarantee compensation within a reasonable timeframe is ensured. A Member State should impose a contribution obligation only to insurance and reinsurance undertakings authorised in that Member State and to Union branches of a third-country undertaking which are established in its territory.
(49)
The sale-of-business tool should enable resolution authorities to effect a sale of the insurance or reinsurance undertaking or parts of its business to one or more purchasers without the consent of shareholders. When applying the sale-of-business tool, authorities should make arrangements for the marketing of that insurance or reinsurance undertaking or part of its business in an open, transparent and non-discriminatory process, while maximising the sale price as much as possible. Where, for reasons of urgency, such a process is impossible, authorities should take steps to redress detrimental effects on competition and on the internal market.
(50)
Any net proceeds from the transfer of assets or liabilities of the undertaking under resolution when applying the sale-of-business tool should benefit the undertaking left in the winding-up proceedings. Any net proceeds from the transfer of shares or other instruments of ownership issued by the undertaking under resolution when applying the sale-of-business tool should benefit the owners of those shares or other instruments of ownership, provided that policy holders and other creditors are compensated first, to the extent that their claims have been written down without being fully compensated. Proceeds should be calculated net of the costs arisen from the failure of the insurance or reinsurance undertaking and from the resolution process.
(51)
Information concerning the marketing of a failing insurance or reinsurance undertaking and negotiations with potential acquirers prior to the application of the sale-of-business tool is likely to be sensitive and might pose risks to trust in the insurance market. It is therefore important to ensure that the disclosure to the public of such information, which is required by Regulation (EU) No 596/2014 of the European Parliament and of the Council 
(
7
)
, can be delayed for the time necessary to plan and structure the resolution of the insurance or reinsurance undertaking concerned.
(52)
A bridge undertaking is an insurance or reinsurance undertaking that is wholly or partially owned by one or more public authorities or controlled by the resolution authority. The main purpose of a bridge undertaking is to ensure that critical functions continue to be provided to the policy holders of the failing insurance or reinsurance undertaking. A bridge undertaking should therefore be operated as a viable going concern and should be put back on the market as soon as conditions are appropriate, or be wound up if it is not viable.
(53)
The asset and liability separation tool should enable authorities to transfer assets, rights or liabilities of an undertaking under resolution to a separate vehicle in order to remove, manage and wind down such assets, rights or liabilities. To prevent an undue competitive advantage for the failing insurance or reinsurance undertaking, the asset and liability separation tool, the main purpose of which is to facilitate a portfolio transfer, should be used only in conjunction with other tools.
(54)
An effective resolution regime should ensure that insurance or reinsurance undertakings can be resolved in a way that minimises the negative impact of a failure on policy holders, taxpayers, the real economy and financial stability. The write-down or conversion should ensure that, before insurance and reinsurance claims are affected, shareholders and creditors of a failing insurance or reinsurance undertaking suffer losses first and bear an appropriate part of the costs arising from the failure of the insurance or reinsurance undertaking as soon as a resolution power is used. The write-down or conversion tool should thus give shareholders and creditors of insurance or reinsurance undertakings and, to a certain extent, policy holders, a stronger incentive to monitor the health of an insurance or reinsurance undertaking during normal circumstances.
(55)
It is important to ensure that resolution authorities have the necessary flexibility, in a range of circumstances, to place the undertaking in resolution in a solvent run-off, to transfer its assets, rights and liabilities in the best conditions for policy holders, or to allocate remaining losses. It is therefore appropriate to lay down that resolution authorities should be able to apply the write-down or conversion tool both where the objective is to resolve the failing insurance or reinsurance undertaking as an undertaking in solvent run-off, and where critical insurance services are transferred while the residual part of the insurance or reinsurance undertaking ceases to operate and is wound up. In that context, the restructuring of insurance liabilities might be warranted to ensure the continuation of a material portion of the insurance coverage and where that is deemed to be in the best interest of the policy holders.
(56)
Where there is a realistic prospect that the undertaking’s viability may be restored and policy holders are not suffering any losses in the resolution process, the write-down or conversion tool could be used to restore the undertaking under resolution to a going concern. In such case, the resolution through write-down or conversion should be accompanied by the replacement of the management, except where the retention of the management is appropriate and necessary for the achievement of the resolution objectives.
(57)
It is not appropriate to apply the write-down or conversion tool to claims insofar as they are secured, collateralised or otherwise guaranteed as such write-down or conversion could be ineffective or due to the potential negative impact of such write-down or conversion on financial stability. However, in order to ensure that the write-down or conversion tool is effective and achieves its objectives, it is desirable that it can be applied to as wide a range of the unsecured liabilities of a failing insurance or reinsurance undertaking as possible. Nevertheless, it is appropriate to exclude certain kinds of unsecured liabilities from the scope of application of the write-down or conversion tool. Thus, to ensure the continuity of critical functions, the write-down or conversion tool should not be applied to certain liabilities to employees of the failing insurance or reinsurance undertaking or to commercial claims that relate to goods and services critical to the daily functioning of the insurance or reinsurance undertaking. To honour pension entitlements and pension amounts owed or owing to pension trusts and pension trustees, the write-down or conversion tool should not be applied to a failing insurance or reinsurance undertaking’s liabilities to a pension scheme. To reduce the risk of systemic contagion, the write-down or conversion tool should neither be applied to liabilities arising from a participation in payment systems which have a remaining maturity of less than seven days, or to liabilities to insurance or reinsurance undertakings, credit institutions and investment firms, with the exception of entities that are part of the same group, with an original maturity of less than seven days.
(58)
The protection of the collective interest of policy holders, beneficiaries and claimants is one of the main objectives of resolution. Insurance and reinsurance claims should therefore only be subject to the application of the write-down or conversion tool as a last resort measure and resolution authorities should carefully consider the consequences of a potential write-down of insurance claims stemming from insurance contracts held by natural persons and micro, small and medium-sized enterprises.
(59)
Resolution authorities should be able to exclude or partially exclude liabilities in a number of circumstances where it is not possible to write down or convert such liabilities within a reasonable timeframe, where the exclusion is strictly necessary and proportionate to achieve the resolution objectives, or where the application of the write-down or conversion tool would cause a destruction in value such that losses borne by other creditors would be higher than if those liabilities were not excluded. Where those exclusions are applied, the level of write-down or conversion of other eligible liabilities may be increased to take account of such exclusions, subject to the ‘no creditor worse off’ principle being respected. At the same time, Member States should not be required to finance resolution from their general budget.
(60)
When applying the write-down or conversion tool to insurance contracts, resolution authorities should take into account that the compulsory minimum coverage levels under applicable law are met after the contract has been restructured. This should not prevent the resolution authority from applying the write-down or conversion tool to insurance claims which arose before the date of the resolution action.
(61)
As a rule, resolution authorities should apply the write-down or conversion tool in a way that respects the 
pari passu
 treatment of creditors and the statutory ranking of claims under applicable insolvency law. Losses should therefore first be absorbed by regulatory capital instruments and should be allocated to shareholders either through the cancellation or transfer of shares or through severe dilution. Where that is not sufficient, subordinated debt should be converted or written down. Senior liabilities should only be converted or written down where the subordinate debt has been converted or written down entirely. Challenging the reduction of the principal amount of the instrument or liability or its conversion resulting from the exercise of write-down or conversion powers should only be possible under the law of the Member State of the resolution authority that exercised the write-down or conversion powers.
(62)
Exemptions of liabilities, inter alia for payment and settlement systems, employee or trade creditors, or preferential ranking, should equally apply in third countries and the Union. To ensure that liabilities can be written down or converted in third countries, it is necessary to lay down that contractual provisions governed by the law of third countries recognise that possibility. Such contractual terms should not be required for liabilities exempted from the application of the write-down or conversion tool, or where the law of the third country or a binding agreement concluded with that third country allow the resolution authority of the Member State concerned to apply the write-down or conversion tool.
(63)
Shareholders and creditors should contribute, to the extent necessary, to the loss allocation mechanism of a failing undertaking. Therefore, Member States should ensure that Tier 1, Tier 2 and Tier 3 capital instruments fully absorb losses at the point of non-viability of the issuing insurance or reinsurance undertaking. Accordingly, resolution authorities should be required to write down those instruments in full, or to convert them, where applicable, to Tier 1 instruments, at the point of non-viability and before any resolution action is taken. For that purpose, the point of non-viability should be understood as either the point at which the resolution authority concerned determines that the insurance or reinsurance undertaking meets the conditions for resolution, or the point at which the resolution authority concerned decides that the insurance or reinsurance undertaking would cease to be viable if those capital instruments were not written down or converted. Those requirements should be recognised in the terms governing the instrument, and in any prospectus or offering documents published or provided in connection with the instruments.
(64)
In order to ensure effective execution of resolution, resolution authorities should have all the necessary legal powers that, in different combinations, can be exercised when applying resolution tools. Those legal powers should include the power to transfer shares in, or assets, rights or liabilities of, a failing insurance or reinsurance undertaking to another entity, including another undertaking or a bridge undertaking, the power to write down or cancel shares, or write-down or convert liabilities of a failing insurance or reinsurance undertaking, the power to replace the management and the power to impose a temporary moratorium on the payment of claims. Ancillary powers are needed, including the power to require continuity of essential services from other parts of a group.
(65)
It is not necessary to prescribe the exact means through which the resolution authorities should intervene in the failing insurance or reinsurance undertaking. Resolution authorities should have the choice between taking control through a direct intervention in the insurance or reinsurance undertaking or through executive order. They should decide according to the circumstances of the case.
(66)
It is necessary to lay down procedural requirements to ensure that resolution actions are properly notified and made public. Information obtained by resolution authorities and their professional advisers during the resolution process is, however, likely to be sensitive and should therefore be subject to an effective confidentiality regime before the resolution decision is made public. Any information provided in respect of a decision before it is taken, be it on whether the conditions for resolution are satisfied, on the use of a specific tool or of any action during the proceedings, must be presumed to have effects on the public and private interests concerned by the action. It is therefore necessary to ensure that there are appropriate mechanisms for maintaining the confidentiality of such information, including on the content and details of recovery and resolution plans and the result of any assessment carried out in that context.
(67)
Exchanges of information between resolution authorities and tax authorities should not be prevented. Such exchanges should be in line with national law, and, where the information originates in another Member State, it should only be exchanged with the express consent of the relevant authority from which the information originates.
(68)
Resolution authorities should have ancillary powers to ensure the effectiveness of the transfer of shares or debt instruments and assets, rights and liabilities to a third-party purchaser or a bridge undertaking. In particular, to facilitate a transfer of insurance or reinsurance claims without affecting the overall risk profile of the related portfolio and of the associated technical provisions and capital requirements, the economic benefits provided by reinsurance agreements should be preserved. Resolution authorities should therefore have the ability to transfer insurance or reinsurance claims together with their corresponding reinsurance rights. That ability should also include the power to remove third parties’ rights from the transferred instruments or assets, the power to enforce contracts and the power to provide for the continuity of arrangements vis-à-vis the recipient of the transferred assets and shares. The right of a party to terminate a contract with an undertaking under resolution, or a group entity thereof, for reasons other than the resolution of the failing insurance or reinsurance undertaking should also remain unaffected. In addition, resolution authorities should have the ancillary power to require the residual insurance or reinsurance undertaking that is being wound up under normal insolvency proceedings to provide services that are necessary to enable the undertaking to which assets or shares have been transferred by virtue of the application of the sale-of-business tool or the bridge undertaking tool to operate its business.
(69)
According to Article 47 of the Charter, everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal. The decisions taken by resolution authorities should therefore be subject to a right of appeal.
(70)
Crisis management measures taken by resolution authorities may require complex economic assessments and a large margin of discretion. Resolution authorities are specifically equipped with the expertise needed for making such assessments and for determining the appropriate use of the margin of discretion. It is therefore important to ensure that the complex economic assessments made by resolution authorities in that context are used as a basis by national courts when reviewing the crisis management measures concerned. However, the complex nature of those assessments should not prevent national courts from examining whether the evidence relied on by the resolution authority is factually accurate, reliable and consistent, whether that evidence contains all relevant information which should be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn therefrom.
(71)
In order to deal with situations of urgency, it is necessary to provide that the lodging of any appeal does not result in automatic suspension of the effects of the challenged decision and that the decision of the resolution authority is immediately enforceable with a presumption that its suspension would be against the public interest.
(72)
It is necessary to protect third parties that have acquired assets, rights and liabilities of the undertaking under resolution in good faith by virtue of the exercise of resolution powers by the authorities. It is equally necessary to ensure the stability of the financial markets. A right of appeal against a resolution decision should therefore not affect any subsequent administrative act or transaction concluded on the basis of an annulled decision. In such cases, remedies for a wrongful decision should be limited to the award of compensation for the damages suffered by the affected persons.
(73)
Crisis management measures may be required to be taken urgently due to serious financial stability risks in the Member State concerned and the Union. Any procedure under national law relating to the application for 
ex ante
 judicial approval of a crisis management measure and a court’s consideration of such an application should therefore be swift. Member States should ensure that the authority concerned can take its decision immediately after a court has given its approval. That possibility should be without prejudice to the right of interested parties to make an application to the court to set aside the decision. However, such possibility should only be granted for a limited period after the resolution authority has taken the crisis management measure in order not to unduly delay the application of the resolution decision.
(74)
Efficient resolution and the need to avoid conflicts of jurisdiction require that no normal insolvency proceedings for a failing insurance or reinsurance undertaking be opened or continued while a resolution authority is exercising its resolution powers or applying resolution tools, except at the initiative of, or with the consent of, the resolution authority. It is therefore necessary to lay down that certain contractual obligations can be suspended for a limited period to enable resolution authorities to apply the resolution tools. That possibility should not, however, apply to obligations in relation to systems designated by a Member State as referred to in Directive 98/26/EC of the European Parliament and of the Council 
(
8
)
, including central counterparties. Directive 98/26/EC reduces the risk associated with participation in payment and securities settlement systems, in particular by reducing disruption in the event of the insolvency of a participant in such a system. It is necessary to ensure that those protections continue to apply in crisis situations and that appropriate certainty for operators of payment and securities systems and other market participants is maintained. A crisis prevention measure or a crisis management measure should therefore not, per se, be deemed to constitute insolvency proceedings within the meaning of Directive 98/26/EC, provided that the substantive obligations under the contracts concerned continue to be performed.
(75)
It is necessary to ensure that resolution authorities, when transferring assets and liabilities to a private sector purchaser or a bridge undertaking, have adequate time to identify contracts that need to be transferred. It should therefore be possible for resolution authorities to restrict counterparties’ rights to close out, accelerate or otherwise terminate financial contracts before the transfer is made. Such restrictions should allow resolution authorities to obtain a true picture of the balance sheet of the failing insurance or reinsurance undertaking without the changes in value and scope that an extensive exercise of termination rights would entail, and should help to avoid creating market instability. Interference with the contractual rights of counterparties should however be restricted to the minimum extent necessary. Any restrictions on termination rights imposed by resolution authorities should therefore only apply in relation to crisis management measures or events directly linked to the application of such measures. Rights to terminate arising from any other default, including failure to pay or deliver margin, should thus remain.
(76)
It is necessary to preserve legitimate capital market arrangements in the event of a transfer of some, but not all, of the assets, rights and liabilities of a failing insurance or reinsurance undertaking. It is therefore appropriate to lay down safeguards to prevent the splitting of linked liabilities or linked rights and contracts, including contracts with the same counterparty covered by security arrangements, title transfer financial collateral arrangements, set-off arrangements, close out netting agreements, and structured finance arrangements. Where such safeguards apply, resolution authorities should be bound to transfer all linked contracts within a protected arrangement, or leave them all with the residual failing insurance or reinsurance undertaking. Those safeguards should ensure that the regulatory capital treatment of exposures subject to a netting agreement for the purposes of Directive 2009/138/EC is not affected.
(77)
In order to provide financial stability to the insurance or reinsurance undertaking a moratorium on surrender rights of policy holders should be introduced. Such a moratorium and the ensuing financial stability for the undertaking concerned should provide the resolution authorities with sufficient time to valuate those undertakings and to assess which resolution tools should be applied. Such a moratorium should also ensure equal treatment of policy holders, and thus avoid potential adverse financial impacts on policy holders that would not be among the first to surrender their policy. Because one of the objectives of resolution is the continuation of insurance cover, policy holders should continue to make any obligatory payments under the insurance or reinsurance contracts concerned, including in the case of annuities.
(78)
Ensuring that resolution authorities have the same resolution tools and powers at their disposal will facilitate coordinated action in the event of a failure of a cross-border group. Further action, however, is necessary to promote cooperation and prevent fragmented national responses. To agree to a group resolution scheme when resolving group entities, resolution authorities should therefore be required to consult each other and cooperate in resolution colleges. To provide for a forum for discussion and reaching such agreement, resolution colleges should be established around the core of the existing colleges of supervisors through the inclusion of resolution authorities and the involvement of competent ministries, EIOPA and, where appropriate, authorities responsible for the insurance guarantee schemes. Resolution colleges should not be decision-making bodies, but platforms facilitating decision-making by national authorities, while it should be for the national authorities concerned to take the joint decisions.
(79)
Following the regulatory developments in response to the global financial crisis, the experience gained since that crisis, and the application of this Directive, the Commission, after having consulted EIOPA, should submit a report to the European Parliament and to the Council assessing the appropriateness of minimum common standards for insurance guarantee schemes within the Union. That report should at least: assess the state of play of insurance guarantee schemes in Member States (coverage level, types of insurance covered, triggers); discuss policy options, including the different policy options, such as using insurance guarantee schemes to continue or to liquidate insurance policies, thereby taking due account of the differences in insurance products in various Member States; assess the necessity of introducing and, where appropriate, outline the steps necessary to introduce a minimum baseline for insurance guarantee schemes across the Union. The report should be accompanied by a legislative proposal where appropriate.
(80)
Resolution of cross-border groups should strike a balance between, on the one hand, the need for procedures that take into account the criticality of the situation and allow for efficient, fair and timely solutions for the group as a whole and, on the other hand, the necessity to protect policy holders, the real economy and financial stability in all the Member States where the group operates. The different resolution authorities should therefore share their views in the resolution college and any resolution actions proposed by the group-level resolution authority should be prepared and discussed among different resolution authorities in the context of the group resolution plans. In order to facilitate swift and joint decisions wherever possible, resolution colleges should also take into account the views of the resolution authorities of all the Member States in which the group is active.
(81)
Resolution actions by the group-level resolution authority should always take into account their impact on policy holders, the real economy and financial stability in the Member States where the group operates. Resolution authorities of the Member State in which a subsidiary undertaking is established should therefore be able to object, as a last resort and in duly justified cases, to the decisions of the group-level resolution authority where those resolution authorities are of the opinion that the resolution actions and measures are not appropriate, either because of the need to protect policy holders, the real economy and financial stability in that Member State, or because of obligations that comparable undertakings in that Member States are subject to.
(82)
Group resolution schemes should facilitate coordinated resolution, which is more likely to deliver the best result for all undertakings of a group. Group-level resolution authorities should therefore propose group resolution schemes and submit those schemes to the resolution college. Resolution authorities that disagree with a group resolution scheme or decide to take independent resolution action should explain to the group-level resolution authority and other resolution authorities covered by the group resolution scheme the reasons for their disagreement and notify those reasons, together with details of any independent resolution action they intend to take. Any resolution authority that decides to depart from the group resolution scheme should duly consider the potential impact of such departure on policy holders, the real economy and financial stability in the Member States where the other resolution authorities are located and the potential effects of such departure on other parts of the group.
(83)
To ensure coordinated action at group level, resolution authorities should be invited to apply, within a group resolution scheme, the same tool to entities belonging to the group that meet the conditions for resolution. Group-level resolution authorities should thus have the power to apply the bridge undertaking tool at group level in order to stabilise a group as a whole and to transfer ownership of subsidiary undertakings to the bridge undertaking with a view to the onward sale of such subsidiary undertakings, either as a package or individually, when market conditions are appropriate. In addition, the group-level resolution authority should have the power to apply the write-down or conversion tool at parent level.
(84)
Effective resolution of internationally active insurance and reinsurance undertakings and groups requires cooperation between Member States and third-country resolution authorities. For that purpose, where it is justified by the situation at hand, EIOPA should be empowered to develop and enter into non-binding framework cooperation arrangements with authorities of third countries in accordance with Article 33 of Regulation (EU) No 1094/2010. For the same reason, national authorities should be permitted to conclude bilateral arrangements with third-country authorities in line with EIOPA’s framework cooperation agreements. The development of such bilateral arrangements should ensure effective planning, decision-making and coordination in respect of such internationally active insurance and reinsurance undertakings. In order to create a level playing field, such bilateral arrangements should be reciprocal, with resolution authorities recognising and enforcing each other’s proceedings, unless any exception that allows for rejection of recognition of third-country resolution proceedings applies.
(85)
Cooperation between resolution authorities should take place both with regard to subsidiary undertakings of Union or third-country groups as with regard to branches of Union or third-country insurance or reinsurance undertakings. Subsidiary undertakings of third-country groups are undertakings established in the Union and are therefore fully subject to Union law, including the application of any resolution tools. It is necessary, however, that Member States retain the right to act in relation to branches of insurance and reinsurance undertakings having their head office in third countries, where the recognition and application of third-country resolution proceedings relating to a branch would endanger the real economy or financial stability in the Union, or where Union policy holders would not receive equal treatment with third-country policy holders. In those circumstances, Member States should have the right, after having consulted their resolution authorities, to refuse recognition of third-country resolution proceedings.
(86)
The implementation of this Directive should not prevent the national insurance guarantee schemes from coexisting with the recovery and resolution framework, regardless of the source of financing of the national insurance guarantee schemes. The use of resolution tools and powers to an insurance or reinsurance undertaking should not prevent policy holders, beneficiaries and other claimants from being compensated through these national insurance guarantee schemes.
(87)
EIOPA should promote convergence of the practices of resolution authorities through guidelines that are issued in accordance with Article 16 of Regulation (EU) No 1094/2010. More in particular, EIOPA should specify all of the following: (a) further details on the criteria concerning the application of simplified obligations for certain undertakings; (b) a range of scenarios for pre-emptive recovery plans and a minimum list of qualitative and quantitative indicators; (c) the criteria for the identification of critical functions; (d) further matters and criteria for the assessment of resolvability; (e) the details on the measures to address or remove impediments to resolvability and the circumstances in which each measure may be applied; and (f) how information should be provided in summary or collective form for the purposes of confidentiality requirements.
(88)
Technical standards in financial services should facilitate consistent harmonisation and adequate protection of policy holders, investors and consumers across the Union. As a body with highly specialised expertise, it would be efficient and appropriate to entrust EIOPA with the development of draft regulatory and implementing technical standards which do not involve policy choices, for submission to the Commission.
(89)
The Commission should, where provided for in this Directive, adopt, by means of delegated acts pursuant to Article 290 TFEU, draft regulatory technical standards developed by EIOPA in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010 to specify the following elements: (a) the criteria to subject an undertaking to pre-emptive recovery planning, the methods to be used when determining market shares for the purposes of recovery planning and the information to be contained in the pre-emptive recovery plans; (b) the content of resolution plans and the content of group resolution plans; (c) different elements on valuation, including the circumstances under which a person is deemed to be independent for the purposes of carrying out a valuation, the methodologies for assessing the value of the assets and liabilities in the context of resolution, the separation of different valuations, a methodology for calculating the buffer for additional losses to be included in provisional valuations, methodologies and principles on the valuation of liabilities arising from derivatives and the methodology for carrying out the valuation of difference in treatment; (d) the contents of the contractual terms to be included in financial contracts governed by third-country law; (e) the operational functioning of resolution colleges. The Commission should, where provided for in this Directive, adopt draft implementing technical standards developed by EIOPA by means of implementing acts pursuant to Article 291 TFEU, in accordance with Article 15 of Regulation (EU) No 1094/2010 to specify the procedures, content and a minimum set of standard forms and templates for the provision of information for the purposes of resolution plans and cooperation from the insurance or reinsurance undertaking.
(90)
Directive 2004/25/EC of the European Parliament and of the Council 
(
9
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, Directive 2007/36/EC of the European Parliament and of the Council 
(
10
)
 and Directive (EU) 2017/1132 of the European Parliament and of the Council 
(
11
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, contain rules on the protection of shareholders and creditors of undertakings that fall within the scope of those Directives. In a situation where resolution authorities need to act rapidly, those rules might hinder effective resolution action and application of resolution tools and powers by resolution authorities. Derogations under Directive 2014/59/EU of the European Parliament and of the Council 
(
12
)
 and Regulation (EU) 2021/23 of the European Parliament and of the Council 
(
13
)
 should therefore be extended to actions taken in the context of the resolution of insurance and reinsurance undertakings. In order to guarantee the maximum degree of legal certainty for stakeholders, such derogations should be set out clearly, should be narrow, and should only be used in the public interest and when resolution triggers are met.
(91)
To provide adequate information sharing and access to all concerned authorities, it is necessary to ensure that resolution authorities are represented in all relevant fora and that EIOPA benefits from the expertise necessary to carry out the tasks related to the recovery and resolution of insurance and reinsurance undertakings. Therefore, Regulation (EU) No 1094/2010 should be amended to designate resolution authorities as competent authorities as referred to in that Regulation. Such assimilation between resolution authorities and competent authorities is consistent with the functions attributed to EIOPA pursuant to Article 25 of Regulation (EU) No 1094/2010 to contribute and participate actively in the development and coordination of recovery and resolution plans.
(92)
It is necessary to ensure that insurance and reinsurance undertakings, those who effectively control their business, and their administrative, management or supervisory body comply with their obligations in relation to the resolution of such undertakings. It is equally necessary to ensure that those undertakings, those who effectively control their business, and their administrative, management or supervisory body are subject to similar treatment across the Union. Member States should therefore be required to provide for administrative sanctions and other administrative measures which are effective, proportionate and dissuasive. Such administrative sanctions and other administrative measures should satisfy certain essential requirements in relation to addressees, criteria to be taken into account when applying an administrative sanction or other administrative measure, publication of administrative sanctions or other administrative measures, key penalising powers and levels of administrative fines. Subject to strict professional secrecy, EIOPA should maintain a central database of all administrative sanctions or other administrative measures and information on the appeals reported to it by supervisory authorities and resolution authorities.
(93)
Member States should not be required to lay down rules for administrative sanctions or other administrative measures for infringements of this Directive which are subject to national criminal law. However, the maintenance of criminal sanctions rather than administrative sanctions or other administrative measures for infringements should not reduce or otherwise affect the ability of resolution authorities and supervisory authorities to cooperate, access and exchange information in a timely manner with resolution authorities and supervisory authorities in other Member States, including after any referral of the infringements concerned to the competent judicial authorities for prosecution.
(94)
Since the objective of this Directive, namely the harmonisation of the rules and processes for the resolution of insurance and reinsurance undertakings, cannot be sufficiently achieved by the Member States but can rather, by reason of the effects of a failure of any undertaking in the whole Union, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Directive does not go beyond what is necessary in order to achieve that objective.
(95)
When taking decisions or actions under this Directive, supervisory authorities and resolution authorities should always have due regard to the impact of their decisions and actions on policy holders, the real economy and financial stability in other Member States and should give consideration to the significance of any subsidiary undertaking or of cross-border activities for policy holders, the financial sector and the economy of the Member State where such a subsidiary undertaking is established or the activities are carried out, even in cases where the subsidiary undertaking or the cross-border activities concerned are of lesser importance for the group.
(96)
By five years after the entry into force of this Directive, the Commission should, building on the experience gained and after having consulted EIOPA, evaluate and report to the European Parliament and to the Council in more detail and focusing on selected aspects of the application of this Directive,
HAVE ADOPTED THIS DIRECTIVE:
TITLE I
SUBJECT MATTER AND SCOPE, DEFINITIONS AND DESIGNATION OF RESOLUTION AUTHORITIES
Article 1
Subject matter and scope
1.   This Directive lays down rules and procedures relating to the recovery and resolution of the following entities:
(a)
insurance and reinsurance undertakings that are established in the Union and fall within the scope of Article 2 of Directive 2009/138/EC;
(b)
parent insurance and reinsurance undertakings established in the Union;
(c)
insurance holding companies and mixed financial holding companies that are established in the Union;
(d)
parent insurance holding companies in a Member State and parent mixed financial holding companies in a Member State;
(e)
Union parent insurance holding companies and Union parent mixed financial holding companies;
(f)
branches of insurance and reinsurance undertakings that are established in a third country and that fulfil the conditions laid down in Articles 75 to 80.
This Directive also lays down rules and procedures relating to essential service providers where the relevant insurance or reinsurance undertaking enters into resolution.
Resolution authorities and supervisory authorities shall, when establishing and applying the requirements laid down in this Directive and when applying the different tools at their disposal in relation to an entity as referred to in the first or second subparagraph, take account of the nature of the business of that entity, its shareholding structure, legal form, risk profile, size, legal status and interconnectedness to other institutions or to the financial system in general, and the scope and complexity of the entity’s activities.
2.   Member States may adopt or maintain rules that are stricter or additional to those laid down in this Directive and in the delegated and implementing acts adopted on the basis of this Directive, provided that those rules are of general application and do not conflict with this Directive and with the delegated and implementing acts adopted on its basis.
Article 2
Definitions
For the purposes of this Directive, the following definitions apply:
(1)
‘resolution’ means the application of a resolution tool or of a tool referred to in Article 26(7) in order to achieve one or more of the resolution objectives referred to in Article 18(2);
(2)
‘insurance undertaking’ means an insurance undertaking as defined in Article 13, point (1), of Directive 2009/138/EC;
(3)
‘reinsurance undertaking’ means a reinsurance undertaking as defined in Article 13, point (4), of Directive 2009/138/EC;
(4)
‘insurance holding company’ means an insurance holding company as defined in Article 212(1), point (f), of Directive 2009/138/EC;
(5)
‘mixed financial holding company’ means a mixed financial holding company as defined in Article 2, point (15), of Directive 2002/87/EC;
(6)
‘parent insurance holding company in a Member State’ means an insurance holding company which is established in a Member State and which is not a subsidiary undertaking of an insurance or reinsurance undertaking, insurance holding company or mixed financial holding company authorised or set up in the same Member State;
(7)
‘Union parent insurance holding company’ means a parent insurance holding company in a Member State which is not a subsidiary undertaking of an insurance or reinsurance undertaking, another insurance holding company or mixed financial holding company authorised or set up in any Member State;
(8)
‘parent mixed financial holding company in a Member State’ means a mixed financial holding company which is established in a Member State, and which is not itself a subsidiary undertaking of an insurance or reinsurance undertaking, an insurance holding company or mixed financial holding company authorised or set up in that same Member State;
(9)
‘Union parent mixed financial holding company’ means a parent mixed financial holding company in a Member State which is not a subsidiary undertaking of an undertaking authorised in any Member State or of another insurance holding company or mixed financial holding company set up in any Member State;
(10)
‘group’ means a group as defined in Article 212(1), point (c), of Directive 2009/138/EC;
(11)
‘resolution objectives’ means the resolution objectives referred to in Article 18(2);
(12)
‘resolution authority’ means an authority designated by a Member State in accordance with Article 3;
(13)
‘supervisory authority’ means a supervisory authority as defined in Article 13, point (10), of Directive 2009/138/EC;
(14)
‘resolution tool’ means a resolution tool referred to in Article 26(3);
(15)
‘resolution power’ means a power referred to in Articles 42 to 54;
(16)
‘competent ministries’ means finance ministries or other ministries of the Member States which are responsible for economic, financial and budgetary decisions at the national level according to national competencies and which have been designated in accordance with Article 3(7);
(17)
‘senior management’ means the person or persons who effectively run the undertaking and who are responsible, and accountable to the administrative, management or supervisory body, for the day-to-day management of the undertaking;
(18)
‘cross-border group’ means a group having group entities established in more than one Member State;
(19)
‘extraordinary public financial support’ means State aid within the meaning of Article 107(1) TFEU, or any other public financial support at supra-national level, which, if provided for at national level, would constitute State aid that is provided to preserve or restore the viability, liquidity or solvency of an entity referred to in Article 1(1), points (a) to (e), or of a group of which such an entity forms part;
(20)
‘group entity’ means a legal person that is part of a group;
(21)
‘group supervisor’ means a group supervisor as defined in Article 212(1), point (d), of Directive 2009/138/EC;
(22)
‘pre-emptive recovery plan’ means a pre-emptive recovery plan drawn up and maintained in accordance with Article 5;
(23)
‘group pre-emptive recovery plan’ means a group pre-emptive recovery plan drawn up and maintained in accordance with Article 7;
(24)
‘significant cross-border activities’ means significant cross-border activities as defined in Article 152aa(1) of Directive 2009/138/EC;
(25)
‘critical functions’ means activities, services or operations performed by an insurance or reinsurance undertaking for third parties that cannot be substituted within a reasonable time or at a reasonable cost, and where the inability of the insurance or reinsurance undertaking to perform the activities, services or operations would be likely to have a significant impact on the financial system or the real economy in one or more Member States including, in particular, the impact resulting from effects on the social welfare of a large number of policy holders, beneficiaries or injured parties or from a systemic disruption or a loss of general confidence in the provision of insurance services;
(26)
‘core business lines’ means business lines and associated services which represent material sources of revenue, profit or franchise value for an insurance or reinsurance undertaking or for a group of which an insurance or reinsurance undertaking forms part;
(27)
‘financing arrangement’ means an arrangement established by a Member State in accordance with Article 81 to ensure the effective application by the resolution authority of the resolution tools and the effective exercise of the resolution powers;
(28)
‘own funds’ means own funds as provided for by Article 87 of Directive 2009/138/EC;
(29)
‘resolution action’ means a decision to place any entity as referred to in Article 1(1), points (a) to (e), under resolution pursuant to Article 19 or 20, the application of a resolution tool or the exercise of one or more resolution powers;
(30)
‘resolution plan’ means a resolution plan for an insurance or reinsurance undertaking drawn up in accordance with Article 9;
(31)
‘group resolution’ means either of the following:
(a)
the taking of resolution action at the level of a parent undertaking or of an insurance or reinsurance undertaking subject to group supervision, or
(b)
the coordination of the application of the resolution tools and the exercise of the resolution powers by resolution authorities in relation to group entities;
(32)
‘group resolution plan’ means a plan for group resolution drawn up in accordance with Articles 10 and 11;
(33)
‘group-level resolution authority’ means the resolution authority in the Member State in which the group supervisor is situated;
(34)
‘group resolution scheme’ means a plan drawn up for the purposes of group resolution in accordance with Article 73;
(35)
‘resolution college’ means a college established in accordance with Article 70;
(36)
‘European resolution college’ means a college established in accordance with Article 71;
(37)
‘mixed-activity insurance holding company’ means a mixed-activity insurance holding company as defined in Article 212(1), point (g), of Directive 2009/138/EC;
(38)
‘normal insolvency proceedings’ means collective insolvency proceedings which entail the partial or total divestment of a debtor and the appointment of a liquidator or an administrator normally applicable to insurance and reinsurance undertakings under national law and either specific to those undertakings or generally applicable to any natural or legal person;
(39)
‘debt instruments’ means bonds and other forms of transferrable debt, instruments creating or acknowledging a debt, and instruments giving rights to acquire debt instruments;
(40)
‘insurance claim’ means an insurance claim as defined in Article 268(1), point (g), of Directive 2009/138/EC;
(41)
‘parent undertaking’ means a parent undertaking as defined in Article 13, point (15), of Directive 2009/138/EC;
(42)
‘Union State aid framework’ means the framework established by Articles 107, 108 and 109 TFEU and regulations and all Union acts, including guidelines, communications and notices, made or adopted pursuant to Article 108(4) or Article 109 TFEU;
(43)
‘winding-up’ means the realisation of assets of an entity referred to in Article 1(1), points (a) to (e);
(44)
‘asset and liability separation tool’ means the mechanism for effecting a transfer by a resolution authority of assets, rights or liabilities of an undertaking under resolution to an asset and liability management vehicle in accordance with Article 30;
(45)
‘asset and liability management vehicle’ means a legal person that meets the requirements laid down in Article 30(2);
(46)
‘write-down or conversion tool’ means the mechanism for effecting the exercise by a resolution authority of the write-down or conversion powers in relation to liabilities of an undertaking under resolution in accordance with Article 35;
(47)
‘sale-of-business tool’ means the mechanism for effecting a transfer by a resolution authority of shares or other instruments of ownership issued by an undertaking under resolution, or assets, rights or liabilities, of an undertaking under resolution to a purchaser that is not a bridge undertaking, in accordance with Article 31;
(48)
‘bridge undertaking’ means a legal person that meets the requirements laid down in Article 32(2);
(49)
‘bridge undertaking tool’ means the mechanism for transferring shares or other instruments of ownership issued by an undertaking under resolution or assets, rights or liabilities of an undertaking under resolution to a bridge undertaking, in accordance with Article 32;
(50)
‘solvent run-off tool’ means the mechanism for prohibiting an undertaking under resolution to conclude new insurance or reinsurance contracts and for limiting its activity to the exclusive administration of its existing portfolio until termination of its activities and winding-up under normal insolvency proceedings in accordance with Article 27;
(51)
‘instruments of ownership’ means shares, other instruments that confer ownership, instruments that are convertible into or give the right to acquire shares or other instruments of ownership, and instruments representing interests in shares or other instruments of ownership;
(52)
‘shareholder’ means a holder of instruments of ownership;
(53)
‘transfer powers’ means the powers specified in Article 42(1), point (e) or (f), to transfer shares, other instruments of ownership, debt instruments, assets, rights or liabilities, or any combination of those items from an undertaking under resolution to a recipient;
(54)
‘central counterparty’ (CCP) means a CCP as defined in Article 2, point (1), of Regulation (EU) No 648/2012 of the European Parliament and of the Council 
(
14
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;
(55)
‘derivative’ means a derivative as defined in Article 2, point (5), of Regulation (EU) No 648/2012;
(56)
‘write-down or conversion powers’ means the powers referred to in Article 35(2) and in Article 42(1), points (g) to (k);
(57)
‘secured liability’ means a liability where the right of the creditor to payment or other form of performance is secured by a charge, pledge or lien, or collateral arrangements including liabilities arising from repurchase transactions and other title transfer collateral arrangements;
(58)
‘Tier 1 instruments’ means basic own-fund items that meet the conditions laid down in Article 94(1) of Directive 2009/138/EC;
(59)
‘Tier 2 instruments’ means basic and ancillary own-fund items that meet the conditions laid down in Article 94(2) of Directive 2009/138/EC;
(60)
‘Tier 3 instruments’ means basic and ancillary own-fund items that meet the conditions laid down in Article 94(3) of Directive 2009/138/EC;
(61)
‘eligible liabilities’ means the liabilities and capital instruments that do not qualify as Tier 1, Tier 2 or Tier 3 instruments of an entity referred to in Article 1(1), points (a) to (e), and that are not excluded from the scope of the write-down or conversion tool pursuant to Article 35(5) to (8);
(62)
‘insurance guarantee scheme’ means a scheme officially recognised by a Member State and financed through contributions from insurance or reinsurance undertakings or policy holders guaranteeing the payment of eligible insurance claims, in part or in full, to eligible policy holders, insured parties and beneficiaries, or ensuring the continuation of insurance policies where an insurance undertaking is unable or likely to become unable to fulfil its obligations and commitments resulting from its insurance contracts;
(63)
‘relevant capital instruments’ means Tier 1, Tier 2 or Tier 3 instruments;
(64)
‘conversion rate’ means the factor that determines the number of shares or other instruments of ownership into which a liability of a specific class will be converted, by reference either to a single instrument of the class in question or to a specified unit of value of a debt claim;
(65)
‘affected creditor’ means a creditor whose claim relates to a liability that is reduced or converted to shares or other instruments of ownership by the exercise of the write-down or conversion power pursuant to the use of the write-down or conversion tool;
(66)
‘recipient’ means the entity to which shares, other instruments of ownership, debt instruments, assets, rights or liabilities, or any combination of those items are transferred from an undertaking under resolution;
(67)
‘business day’ means a day other than a Saturday, a Sunday or a public holiday in the Member State concerned;
(68)
‘termination right’ means a right to terminate a contract, a right to accelerate, close out, set-off or net obligations or any similar provision that suspends, modifies or extinguishes an obligation of a party to the contract or a provision that prevents an obligation under the contract from arising that would otherwise arise;
(69)
‘undertaking under resolution’ means any of the entities referred to in Article 1(1), points (a) to (e), in respect of which a resolution action is taken;
(70)
‘ultimate parent undertaking’ means a parent undertaking in a Member State, of a group which is subject to group supervision in accordance with Article 213(2), point (a) or (b), of Directive 2009/138/EC, which is not a subsidiary undertaking of another insurance or reinsurance undertaking, an insurance holding company or a mixed financial holding company that is authorised and set up in any Member State;
(71)
‘third-country insurance or reinsurance undertaking’ means a third-country insurance undertaking or a third-country reinsurance undertaking as defined in Article 13, points (3) and (6), of Directive 2009/138/EC;
(72)
‘third-country resolution proceedings’ means an action under the law of a third country to manage the failure of a third-country insurance or reinsurance undertaking or a third-country parent undertaking that is comparable, in terms of objectives and anticipated results, to resolution actions under this Directive;
(73)
‘Union branch of a third-country undertaking’ means a branch located in a Member State of a third-country insurance or reinsurance undertaking;
(74)
‘relevant third-country authority’ means a third-country authority responsible for carrying out functions comparable to those of resolution authorities or supervisory authorities pursuant to this Directive;
(75)
‘title transfer financial collateral arrangement’ means a title transfer financial collateral arrangement as defined in Article 2(1), point (b), of Directive 2002/47/EC of the European Parliament and of the Council 
(
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;
(76)
‘netting arrangement’ means an arrangement under which a number of claims or obligations can be converted into a single net claim, including closeout netting arrangements under which, on the occurrence of an enforcement event (however or wherever defined) the obligations of the parties are accelerated so as to become immediately due or are terminated, and in either case are converted into or replaced by a single net claim, including ‘close-out netting provisions’ as defined in Article 2(1), point (n)(i), of Directive 2002/47/EC and ‘netting’ as defined in Article 2, point (k), of Directive 98/26/EC;
(77)
‘set-off arrangement’ means an arrangement under which two or more claims or obligations owed between the undertaking under resolution and a counterparty can be set off against each other;
(78)
‘financial contracts’ means financial contracts as defined in Article 2(1), point (100), of Directive 2014/59/EU;
(79)
‘crisis prevention measure’ means the exercise of powers to direct an undertaking to address the deficiencies or impediments to recoverability under Article 6(5) of this Directive, the exercise of powers to address or remove impediments to resolvability under Article 15 or 16 of this Directive, the application of any measures under Article 137, Article 138(3) and (5), Article 139(3) and Article 140 of Directive 2009/138/EC and the application of a preventive measure under Article 141 of Directive 2009/138/EC;
(80)
‘crisis management measure’ means a resolution action, the appointment of a special manager under Article 44 or the appointment of a person under Article 54(1);
(81)
‘designated national macroprudential authority’ means the authority entrusted with the conduct of macroprudential policy referred to in Recommendation B1 of the Recommendation of the European Systemic Risk Board of 22 December 2011 on the macroprudential mandate of national authorities (ESRB/2011/3);
(82)
‘regulated market’ means a regulated market as defined in Article 4(1), point (21), of Directive 2014/65/EU of the European Parliament and of the Council 
(
16
)
.
(83)
‘credit institution’ means a credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013 of the European Parliament and of the Council 
(
17
)
;
(84)
‘investment firm’ means an investment firm as defined in Article 4(1), point (2), of Regulation (EU) No 575/2013;
(85)
‘small and non-complex undertaking’ means a small and non-complex undertaking as defined in Article 13, point (10a), of Directive 2009/138/EC;
(86)
‘essential service provider’ means an entity that provides goods or services, such as IT services, utilities and the rental, servicing and upkeep of premises, that are needed to maintain the continuous functioning of the operations of an insurance or reinsurance undertaking, or are needed for ensuring the continuity of insurance coverage, and that is part of the same group as that undertaking;
(87)
‘subsidiary undertaking’ means a subsidiary undertaking as defined in Article 13, point (16), of Directive 2009/138/EC;
(88)
‘Union subsidiary undertaking’ means an insurance or reinsurance undertaking which has its head office in a Member State and which is a subsidiary undertaking of a third-country insurance or reinsurance undertaking or a third-country parent undertaking;
(89)
‘branch’ means a branch as defined in Article 13, point (11), of Directive 2009/138/EC;
(90)
‘administrative, management or supervisory body’ means an administrative, management or supervisory body as defined in Article 1, point (43), of Commission Delegated Regulation (EU) 2015/35 
(
18
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;
(91)
‘financial conglomerate’ means a financial conglomerate as defined in Article 2, point (14), of Directive 2002/87/EC.
Article 3
Designation of resolution authorities and competent ministries
1.   Each Member State shall designate one or, exceptionally, more resolution authorities that are empowered to apply the resolution tools and exercise the resolution powers.
2.   Resolution authorities shall be national central banks, competent ministries, public administrative authorities or authorities entrusted with public administrative powers.
3.   Where a resolution authority is entrusted with other functions, including supervisory functions, adequate structural arrangements shall be in place to avoid conflicts of interest between the functions entrusted to the resolution authority pursuant to this Directive and supervisory or other functions, without prejudice to the exchange of information and cooperation obligations required by paragraph 6.
Member States shall ensure that those arrangements ensure effective operational independence, including separate staff, reporting lines and decision-making processes of the resolution authority from any supervisory or other functions of that resolution authority.
4.   The requirements laid down in paragraph 3 shall not preclude that:
(a)
reporting lines converge at the highest level or senior management level of an organisation that subsumes different functions or authorities;
(b)
staff is shared, under predefined conditions, between the resolution function and other functions, including supervisory functions, to meet temporarily high workloads, or for the resolution authority to be able to avail itself of the expertise of shared staff.
5.   Resolution authorities shall adopt and make public internal rules to prevent conflicts of interest in compliance with the requirements set out in paragraphs 3 and 4, including rules regarding professional secrecy and information exchanges between the different functional areas.
6.   Member States shall require that authorities exercising supervision and resolution functions and persons exercising those functions on their behalf cooperate closely in the preparation, planning and application of resolution decisions, both where the resolution authority and the supervisory authority are separate entities and where the functions are carried out in the same entity.
7.   Each Member State shall designate a single ministry as the competent ministry under this Directive. Where relevant, Member States shall ensure that an appropriate coordination mechanism with other involved ministries is put in place.
8.   Where the resolution authority in a Member State is not the competent ministry, the resolution authority shall inform the competent ministry of the decisions taken pursuant to this Directive without undue delay and, unless otherwise laid down in national law, not implement any decisions that have a direct fiscal impact without having obtained the approval of that competent ministry.
9.   Where a Member State designates more than one resolution authority, it shall provide the Commission and EIOPA with a fully reasoned notification for doing so and shall clearly allocate functions and responsibilities between those authorities, ensure adequate coordination between them and designate a single authority as a contact authority for the purposes of cooperation and coordination with the relevant authorities of other Member States.
10.   Member States shall inform EIOPA of the national authority or authorities designated as resolution authorities and, where relevant, of the contact authority and their specific functions and responsibilities. EIOPA shall publish the list of those resolution authorities and contact authorities.
11.   Without prejudice to Article 67, Member States may limit the liability of the resolution authority, the supervisory authority and their respective staff in accordance with national law for their acts and omissions in the course of discharging their functions under this Directive.
TITLE II
PREPARATION
CHAPTER I
Pre-emptive recovery planning and resolution planning
Section 1
General provisions
Article 4
Simplified obligations for certain undertakings
1.   Taking into account the impact that the failure of an insurance or reinsurance undertaking could have, due to the nature of its business, its shareholding structure, its legal form, its risk profile, size and legal status, its interconnectedness to other regulated undertakings or to the financial system in general, the scope and the complexity of its activities, and whether its failure and subsequent winding-up under normal insolvency proceedings would be likely to have a significant negative effect on financial markets, on other undertakings, on policy holders, on funding conditions, or on the wider economy, Member States shall ensure that supervisory and resolution authorities determine whether simplified obligations can apply for certain insurance and reinsurance undertakings and groups with respect to:
(a)
the contents and details of pre-emptive recovery plans provided for in Articles 5 to 8 and resolution plans provided for in Articles 9 to 12;
(b)
the date by which the first pre-emptive recovery and resolution plans are to be drawn up and the frequency for updating pre-emptive recovery and resolution plans, which may be lower than the frequency provided for in Article 5(4), Article 7(3), Article 9(5) and Article 11(3);
(c)
the content and level of detail of the information required from undertakings pursuant to Article 5(6), Article 7(3), Article 10(2) and Article 12(1);
(d)
the level of detail for the assessment of resolvability provided for in Articles 13 and 14.
2.   EIOPA shall, by 29 July 2027, issue guidelines in accordance with Article 16 of Regulation (EU) No 1094/2010 to specify further details on the criteria referred to in paragraph 1, introductory part, of this Article.
3.   Member States shall require the supervisory authorities or the resolution authorities, as applicable, to provide EIOPA, on an annual basis and for each Member State separately, with all of the following information:
(a)
the number of insurance and reinsurance undertakings and groups subject to pre-emptive recovery planning and resolution planning pursuant to Articles 5, 7, 9 and 10;
(b)
the number of insurance and reinsurance undertakings and groups subject to simplified obligations as referred to in paragraph 1;
(c)
quantitative information on the application of the criteria referred to in paragraph 1, introductory part;
(d)
a description of the simplified obligations applied on the basis of the criteria referred to in paragraph 1, introductory part, as compared to the full obligations, together with the volume of capital requirements, premiums, technical provisions and assets, measured as percentages of the total volume of, respectively, capital requirements, premiums, technical provisions and assets of the insurance and reinsurance undertakings of the Member States or of all the groups, as applicable.
4.   EIOPA shall publicly disclose, on an annual basis and for each Member State separately, the information referred to in paragraph 3, points (a) to (d), together with an assessment of any divergences regarding the implementation of paragraph 1 at national level.
Section 2
Pre-emptive recovery planning
Article 5
Pre-emptive recovery plans
1.   Member States shall ensure that insurance and reinsurance undertakings that are not part of a group subject to pre-emptive recovery planning pursuant to Article 7, and that meet the criteria laid down in paragraph 2 or 3 of this Article, draw up and keep updated a pre-emptive recovery plan. That pre-emptive recovery plan shall contain measures to be taken by the undertaking concerned to restore its financial position where that position has significantly deteriorated.
The drawing up, keeping up-to-date and application of pre-emptive recovery plans shall be considered to be part of the system of governance within the meaning of Article 41 of Directive 2009/138/EC.
2.   Member States shall ensure that the supervisory authority subjects insurance and reinsurance undertakings to pre-emptive recovery planning requirements on the basis of their size, business model, risk profile, interconnectedness and substitutability, their importance for the economy of the Member States in which they operate, and their cross-border activities, in particular significant cross-border activities.
Supervisory authorities shall ensure that at least 60 % of the Member State’s life insurance and reinsurance market and at least 60 % of its non-life insurance and reinsurance market – the life market share being based on gross technical provisions and the non-life market share being based on gross written premiums – are subject to pre-emptive recovery planning requirements pursuant to this Article.
In the calculation of the market coverage level referred to in the second subparagraph, the subsidiary insurance or reinsurance undertakings of a group may be taken into account where those subsidiary insurance or reinsurance undertakings are part of a group for which the ultimate parent undertaking is drawing up and maintaining a group pre-emptive recovery plan.
3.   Any insurance or reinsurance undertaking which is subject to a resolution plan shall be subject to pre-emptive recovery planning requirements.
Small and non-complex undertakings shall not be subject to pre-emptive recovery planning requirements, except where a supervisory authority considers that such an undertaking represents a particular risk at national or regional level.
4.   Supervisory authorities shall ensure that insurance and reinsurance undertakings update their pre-emptive recovery plans at least every two years, and in any case:
(a)
after a change to the legal or organisational structure of the undertaking, to its business or to its financial position which could have a material effect on, or necessitates a material change to, the pre-emptive recovery plan;
(b)
when a material change to the financial position of the undertaking that could have a material effect on the effectiveness of the plan, or otherwise necessitate a revision of the pre-emptive recovery plan, becomes foreseeable.
5.   Pre-emptive recovery plans shall not assume any access to or receipt of extraordinary public financial support.
6.   Member States shall require that pre-emptive recovery plans contain all of the following:
(a)
a summary of the key elements of the plan, including material changes to the most recently submitted plan;
(b)
a description of the undertaking or the group, including a summary of any material changes since the most recently submitted plan;
(c)
a framework of indicators as referred to in paragraph 8;
(d)
a description of how the pre-emptive recovery plan has been drawn-up, how it will be updated and how it will be applied;
(e)
a range of remedial actions;
(f)
a communication strategy.
(g)
where the undertaking has breached the Solvency Capital Requirement laid down in Title I, Chapter VI, Section 4, of Directive 2009/138/EC and submitted a recovery plan in accordance with Article 138(2) of Directive 2009/138/EC at some point in the last 10 years, that recovery plan as well as an assessment of the measures taken to restore the undertaking’s compliance with the Solvency Capital Requirement.
7.   Member States shall require that insurance and reinsurance undertakings assess the credibility and feasibility of their pre-emptive recovery plans, in particular the framework of indicators referred to in paragraph 8 and the remedial actions, against a range of scenarios of severe macroeconomic and financial stress relevant to the insurance or reinsurance undertaking’s specific conditions, including system-wide events, idiosyncratic stress events likely to materially affect their asset and liability profile, and combinations of such stress events.
8.   Member States shall require that insurance and reinsurance undertakings ensure that their pre-emptive recovery plans contain a framework of qualitative and quantitative indicators that identify the points at which remedial actions should be considered or taken. Those indicators may include criteria relating to, inter alia, capital, liquidity, asset quality, profitability, market conditions, macro-economic conditions and operational events. Indicators relating to the capital position shall as a minimum contain any breach of the Solvency Capital Requirement laid down in Title I, Chapter VI, Section 4, of Directive 2009/138/EC.
Member States shall require that any breach of the Solvency Capital Requirement result in appropriate remedial action by the undertaking concerned in line with the pre-emptive recovery plan.
Member States shall require that supervisory authorities ensure that insurance and reinsurance undertakings put in place appropriate arrangements for the regular monitoring of the indicators referred to in the first subparagraph.
9.   An insurance or reinsurance undertaking that decides to take a remedial action contained in its pre-emptive recovery plan, or that decides to refrain from taking such remedial action even though an indicator as referred to in paragraph 8, first subparagraph, has been met, shall notify such decision to the supervisory authority without delay.
10.   The administrative, management or supervisory body of an insurance or reinsurance undertaking as referred to in paragraph 1 shall assess and approve the pre-emptive recovery plan before submitting it to the supervisory authority for review.
11.   EIOPA shall, by 29 January 2027, issue guidelines in accordance with Article 16 of Regulation (EU) No 1094/2010 to specify further:
(a)
in cooperation with the European Systemic Risk Board, the range of scenarios referred to in paragraph 7 of this Article;
(b)
the qualitative and quantitative indicators referred to in paragraph 8 of this Article.
12.   EIOPA shall develop draft regulatory technical standards to specify further:
(a)
the criteria, in particular as regards cross-border activity, referred to in paragraph 2, first subparagraph;
(b)
the methods to be used when determining the market shares referred to in paragraph 2, second and third subparagraphs;
(c)
the information that an insurance or reinsurance undertaking is to include in the pre-emptive recovery plan, including the remedial actions referred to in paragraph 6, point (e), and their implementation.
EIOPA shall submit those draft regulatory technical standards to the Commission by 29 July 2026.
Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.
Article 6
Review and assessment by supervisory authorities of pre-emptive recovery plans
1.   Supervisory authorities shall, within nine months of the submission of each pre-emptive recovery plan, review that plan and assess the extent to which it satisfies the requirements laid down in Article 5 and all of the following:
(a)
whether the implementation of the arrangements proposed in the plan is reasonably likely to maintain or restore within an appropriate timeframe the viability and financial position of the insurance or reinsurance undertaking;
(b)
whether the plan and specific options within the plan are reasonably likely to be implemented quickly and effectively in situations of financial stress;
(c)
whether the plan and specific options within the plan are reasonably likely to avoid to the maximum extent possible any significant adverse effect on the financial system, including in scenarios which would lead other insurance and reinsurance undertakings to implement pre-emptive recovery plans within the same period.
2.   Supervisory authorities shall provide resolution authorities with all pre-emptive recovery plans they have received. Resolution authorities may examine the pre-emptive recovery plan to identify any actions in the pre-emptive recovery plan which may adversely impact the resolvability of the insurance or reinsurance undertakings concerned and make recommendations to the supervisory authority with regard to those matters within the period set out in paragraph 1.
3.   Where an insurance or reinsurance undertaking carries out significant cross-border activities, the home supervisory authority shall, upon the request of a host supervisory authority, provide the pre-emptive recovery plan to that host supervisory authority. The host supervisory authority may examine the pre-emptive recovery plan to identify any actions in the pre-emptive recovery plan which may adversely impact policy holders, the real economy or the financial stability in its Member State and make recommendations to the home supervisory authority with regard to those matters. The home supervisory authority shall provide a reasoned reply as to its decision to follow or not the recommendations. Where the home supervisory authority fails to properly take into account the recommendations of the host supervisory authority, the host supervisory authority may refer the matter to EIOPA in accordance with Article 31(2), point (c), of Regulation (EU) No 1094/2010.
4.   Supervisory authorities that, after having assessed the pre-emptive recovery plan, conclude that there are material deficiencies in that plan or material impediments to its implementation shall notify the insurance or reinsurance undertaking concerned of the content of their assessment and require the undertaking concerned to submit, within two months, a revised plan demonstrating how those deficiencies or impediments are addressed. That period of two months may be extended by one month, upon request of the undertaking concerned, where the supervisory authority so agrees.
Before requiring an insurance or reinsurance undertaking to resubmit a pre-emptive recovery plan, the supervisory authority shall give the undertaking the opportunity to state its opinion on that requirement.
A supervisory authority that finds that the deficiencies and impediments have not been adequately addressed in the revised plan may instruct the undertaking to make specific changes to the plan.
5.   Where the insurance or reinsurance undertaking fails to submit a revised pre-emptive recovery plan, or where the supervisory authority comes to the conclusion that the revised pre-emptive recovery plan does not adequately remedy the deficiencies or impediments identified in its original assessment, and where it is not possible to adequately remedy the deficiencies or impediments through an instruction to make specific changes to the plan, the supervisory authority shall require the undertaking to identify within a reasonable timeframe changes the undertaking can make to its business in order to address the deficiencies in the pre-emptive recovery plan or impediments to the implementation of that plan.
Where the insurance or reinsurance undertaking fails to identify such changes within the timeframe set by the supervisory authority, or where the supervisory authority concludes that the actions proposed by the undertaking would not adequately address the deficiencies or impediments, the supervisory authority may take a reasoned decision to instruct the undertaking to take any measures that the supervisory authority considers to be necessary and proportionate, taking into account the seriousness of the deficiencies and impediments and the effect of the measures on the undertaking’s business.
This decision shall be notified in writing to the insurance or reinsurance undertaking and shall be subject to a right of appeal.
Article 7
Group pre-emptive recovery plans
1.   Member States shall ensure that the group supervisor has the power to require that the ultimate parent undertaking of a group draw up and submit to the group supervisor a group pre-emptive recovery plan.
Group pre-emptive recovery plans shall consist of a pre-emptive recovery plan for the group headed by the ultimate parent undertaking. The group pre-emptive recovery plan shall identify remedial actions that may be required to be implemented at the level of that ultimate parent undertaking and at the level of its individual subsidiary undertakings to restore their financial position where that position has significantly deteriorated.
The group supervisor shall impose the requirement referred to in the first subparagraph on the basis of the criteria referred to in Article 5(2) or (3), as applicable.
2.   The group pre-emptive recovery plan shall contain remedial actions to achieve the stabilisation of the group, or of any insurance or reinsurance undertaking of the group, when the group or any of its insurance or reinsurance undertakings is in a situation of stress so as to address or remove the causes of the distress and restore the financial position of the group or the undertaking that is part of the group in question, at the same time taking into account the financial position of other group entities.
The group pre-emptive recovery plan shall contain arrangements to ensure the coordination and consistency of proportionate measures to be taken at the level of the group and the group entities.
3.   The group pre-emptive recovery plan, and any plan drawn up for an individual subsidiary insurance or reinsurance undertaking, shall be drawn up in accordance with Article 5(5) to (8), and shall be updated in accordance with Article 5(4).
In accordance with Article 5(8), third subparagraph, appropriate arrangements for the regular monitoring of the indicators shall be put in place.
The group pre-emptive recovery plan shall identify whether there are obstacles to the implementation of remedial actions within the group, including at the level of individual entities covered by the plan, and whether there are substantial practical or legal impediments to the prompt transfer of own funds or the repayment of liabilities or assets within the group.
4.   Supervisory authorities may require subsidiary insurance or reinsurance undertakings or the entities referred to in Article 1(1), points (c) and (d), to draw up and submit pre-emptive recovery plans where no group pre-emptive recovery plan exists.
5.   Where the supervisory authority concerned assesses that an entity is not sufficiently considered by the group pre-emptive recovery plan in light of the significance of the entity in question in the Member State concerned and in light of the obligations to which comparable undertakings in that Member State are subject, it may request the group supervisor, on the basis of a reasoned opinion, to require the ultimate parent undertaking, or insurance holding company heading the group, to submit a revised group pre-emptive recovery plan taking into account the concerns expressed by the supervisory authority concerned. Where a revised group pre-emptive recovery plan has been submitted and the supervisory authority concerned assesses that that revised plan does not sufficiently address its concerns, it may require the subsidiary insurance or reinsurance undertakings or the entities referred to in Article 1(1), points (c) and (d), concerned, to draw up and submit a pre-emptive recovery plan. In that case, the supervisory authority shall provide the group supervisor with a reasoned opinion for this assessment. Subsequently it shall provide the group supervisor with the pre-emptive recovery plan.
6.   The group supervisor shall, provided that the confidentiality requirements laid down in Article 66 are complied with, transmit the group pre-emptive recovery plans to:
(a)
EIOPA;
(b)
the relevant supervisory authorities which are members of or participate in the college of supervisors as referred to in Article 248(3) of Directive 2009/138/EC;
(c)
the group-level resolution authority;
(d)
the resolution authorities of the subsidiary undertakings;
(e)
where the group is or is part of a financial conglomerate, the relevant resolution authority designated in accordance with Article 3 of Directive 2014/59/EU and the competent authority as defined in Article 4(1), point (40), of Regulation (EU) No 575/2013.
7.   The administrative, management or supervisory body of the entity drawing up the group pre-emptive recovery plan pursuant to paragraph 1 or the pre-emptive recovery plan pursuant to paragraph 4 or 5 shall assess and approve the plan concerned before submitting it to the group supervisor or to the supervisory authority, as appropriate, for review.
8.   When drawing up pre-emptive recovery plans, a Union subsidiary undertaking may take into account any group plans on pre-emptive recovery drawn up by the third-country insurance or reinsurance undertakings or third-country parent undertaking of which it is a subsidiary undertaking, where applicable.
Article 8
Review and assessment by the group supervisor of group pre-emptive recovery plans
1.   The group supervisor shall, after having consulted the relevant supervisory authorities which are members of or participate in the college of supervisors as referred to in Article 248(3) of Directive 2009/138/EC, review the group pre-emptive recovery plan and assess the extent to which it satisfies the requirements and criteria laid down in Article 7. That assessment shall be made in accordance with the procedure established in Article 6 and in this Article and within the period laid down in Article 6(1) and shall take into account the potential impact of the remedial actions on policy holders, the real economy and financial stability in all the Member States where the group operates.
2.   The group supervisor shall endeavour to reach a joint decision, as referred to in Article 17 of this Directive, within the college of supervisors established in accordance with Article 248 of Directive 2009/138/EC, on:
(a)
the review and assessment of the group pre-emptive recovery plan;
(b)
whether a pre-emptive recovery plan on an individual basis is to be drawn up for insurance and reinsurance undertakings that are part of the group, in accordance with Article 7(4) or (5) of this Directive;
(c)
the application of the measures referred to in Article 6(4) and (5) of this Directive.
Section 3
Resolution planning
Article 9
Resolution plans
1.   Member States shall ensure that resolution authorities, after having consulted the supervisory authority, draw up a resolution plan for each insurance or reinsurance undertaking that is not part of a group subject to resolution planning pursuant to Articles 10 and 11, and that meets the conditions laid down in paragraph 2 of this Article. The resolution plan shall provide for the resolution actions which the resolution authority may take where the insurance or reinsurance undertaking meets the conditions for resolution referred to in Article 19(1) or Article 20(3).
2.   Resolution authorities shall draw up resolution plans for insurance and reinsurance undertakings for which they assess that it is more likely, when compared to other undertakings under their remit, that resolution action would be in the public interest as referred to in Article 19(5) in the event of the failure of the undertaking concerned, or for which the authorities assess that they perform a critical function. Those assessments shall take into account, as a minimum, the necessity to achieve resolution objectives and the undertaking’s size, business model, risk profile, interconnectedness, substitutability and in particular its cross-border activity.
On the basis of the assessments referred to in the first subparagraph, resolution authorities shall ensure that at least 40 % of the Member State’s life insurance and reinsurance market and 40 % of its non-life insurance and reinsurance market – the life market share being based on gross technical provisions and the non-life market share being based on gross written premiums – are subject to resolution planning. In the calculation of the market coverage level, the subsidiary undertakings of a group may be taken into account where those subsidiary undertakings are covered in the group resolution plan.
Small and non-complex undertakings shall not be subject to resolution planning requirements, except where the resolution authority considers that such an undertaking represents a particular risk at national or regional level.
3.   Where the insurance or reinsurance undertaking concerned carries out significant cross-border activities, the home resolution authorities shall provide the draft resolution plan to the host supervisory or resolution authorities. The host supervisory or resolution authorities may examine the draft resolution plan to identify any actions in the draft resolution plan which may adversely impact policy holders, the real economy or the financial stability in their Member State and make recommendations to the home resolution authority with regard to those matters. The home resolution authority shall provide a reasoned reply as to its decision to follow or not the recommendations. Where the home resolution authority fails to properly take into account the recommendations of the host supervisory or resolution authority, the host supervisory or resolution authority may refer the matter to EIOPA in accordance with Article 31(2), point (c), of Regulation (EU) No 1094/2010.
4.   When specifying the options for application of resolution tools and powers, resolution plans shall take into consideration relevant resolution scenarios, including the scenario where the failure of the insurance or reinsurance undertaking is idiosyncratic and the scenario where it occurs at a time of broader financial instability or system-wide events.
Resolution plans shall not assume any extraordinary public financial support besides, where available, the use of insurance guarantee schemes or of any financing arrangements.
5.   Resolution authorities shall review, and where necessary update, resolution plans at least every two years, and in any case:
(a)
after any material change to the legal or organisational structure of the insurance or reinsurance undertaking, to its business, or to its financial position, that could have a material effect on the effectiveness of the plan or would otherwise necessitate a revision of the resolution plan;
(b)
when a material change to the financial position of the insurance or reinsurance undertaking that could have a material effect on the effectiveness of the plan, or otherwise necessitate a revision of the resolution plan, becomes foreseeable.
Insurance and reinsurance undertakings and supervisory authorities shall promptly communicate to the resolution authorities any event that necessitates a revision or update of the resolution plan.
6.   Without prejudice to Article 4, resolution plans shall set out options for applying the resolution tools to, and exercising resolution powers with respect to, the insurance or reinsurance undertaking. Resolution plans shall contain, quantified whenever appropriate and possible, all of the following:
(a)
a summary of the key elements of the plan;
(b)
a summary of the material changes to the undertaking that have occurred since the latest resolution-related information was filed;
(c)
a demonstration of how critical functions and core business lines could be legally and economically separated, to the extent necessary, from other functions so as to ensure continuity upon the failure of the undertaking;
(d)
an identification of those assets which would be expected to qualify as collateral;
(e)
an estimation of the timeframe for executing each material aspect of the plan;
(f)
a detailed description of the assessment of resolvability, including the assessment of feasibility and credibility of winding-up under normal insolvency proceedings, carried out in accordance with Article 13;
(g)
a description of any measures required pursuant to Article 15 to address or remove impediments to resolvability identified as a result of the assessment carried out in accordance with Article 13;
(h)
an explanation as to how the resolution options could be financed without the assumption of any extraordinary public financial support besides, where available, the use of insurance guarantee schemes or of any financing arrangements;
(i)
a detailed description of the different resolution strategies that could be applied in light of the different possible scenarios and the applicable timescales;
(j)
a description of critical interdependencies;
(k)
an analysis of the impact of the resolution plan on the employees of the undertaking, including an assessment of any associated costs, and a description of envisaged procedures to consult staff during the resolution process, taking into account national systems for dialogue with social partners where applicable;
(l)
a plan for communicating with the media and the public;
(m)
a description of essential operations and systems for maintaining the continuous functioning of the undertaking’s operational processes;
(n)
where applicable, any opinion expressed by the undertaking in relation to the resolution plan.
The summary of the key elements of the plan shall be disclosed to the insurance or reinsurance undertaking.
7.   The resolution authority shall transmit the resolution plans and any changes thereto to the supervisory authorities concerned.
8.   EIOPA shall develop draft regulatory technical standards to specify further the contents of the resolution plan.
EIOPA shall submit those draft regulatory technical standards to the Commission by 29 July 2026.
Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.
9.   EIOPA shall, by 29 January 2027, issue guidelines in accordance with Article 16 of Regulation (EU) No 1094/2010 to specify further the criteria for the identification of critical functions.
Article 10
Group resolution plans
1.   Member States shall ensure that group-level resolution authorities have the power to draw up group resolution plans for groups that are subject to resolution planning on the basis of the conditions laid down in Article 9(2).
2.   The group resolution plan shall:
(a)
set out the resolution actions that are to be taken in respect of each entity where measures will be necessary to ensure the continuity of critical functions;
(b)
examine the extent to which the resolution tools could be applied and the resolution powers exercised in a coordinated manner and identify any potential impediments to a coordinated resolution;
(c)
where a group contains entities incorporated in third countries, identify appropriate arrangements for cooperation and coordination with the relevant authorities of those third countries and the implications for resolution within the Union;
(d)
identify measures, including the legal and economic separation of particular functions or business lines, that are necessary to facilitate group resolution, taking into account intra-group interdependencies;
(e)
identify available sources of funding to finance the group resolution actions and, where the use of insurance guarantee schemes or of any financing arrangement would be required, set out principles for sharing responsibility for that financing between sources of funding in different Member States, while not assuming any extraordinary public financial support;
(f)
contain the elements laid down in Article 9(6).
3.   The group-level resolution authority shall transmit group resolution plans and any changes thereto to the supervisory authorities concerned and, where the group is, or is part of, a financial conglomerate, to the relevant resolution authority designated in accordance with Article 3 of Directive 2014/59/EU and the competent authority as defined in Article 4(1), point (40), of Regulation (EU) No 575/2013.
4.   Resolution authorities may draw up resolution plans for subsidiary insurance or reinsurance undertakings or the entities referred to in Article 1(1), points (c) and (d), where no group resolution plan exists.
5.   When drawing up resolution plans, the resolution authorities of Union subsidiary undertakings may take into account the resolution strategy pursued by the third-country authorities concerned for the groups for which those resolution authorities are responsible.
If the resolution authority considers such resolution strategy to be credible and feasible, it may appropriately reflect that resolution strategy and its possible consequences for the Union subsidiary undertaking concerned in its resolution plan. This shall not put at risk the achievement of resolution objectives referred to in Article 18.
6.   EIOPA shall develop draft regulatory technical standards specifying the contents of group resolution plans, taking into account the diversity of business models of groups in the internal market.
EIOPA shall submit those draft regulatory technical standards to the Commission by 29 July 2026.
Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.
Article 11
Requirements and procedure for group resolution plans
1.   Member States shall ensure that ultimate parent undertakings submit to the group-level resolution authority the information that may be required under Article 12. That information shall concern the ultimate parent undertaking and to the extent required each of the group entities including the entities referred to in Article 1(1), points (b) to (e).
The group-level resolution authority shall, provided that the confidentiality requirements laid down in this Directive are complied with, transmit the relevant information provided in accordance with this paragraph to:
(a)
EIOPA;
(b)
the resolution authorities which are members of the resolution college;
(c)
the relevant supervisory authorities which are members of or participate in the college of supervisors as referred to in Article 248(3) of Directive 2009/138/EC.
2.   Member States shall ensure that, in resolution colleges, group-level resolution authorities, acting jointly with the resolution authorities referred to in paragraph 1, second subparagraph, point (b), and after having consulted the supervisory authorities concerned which are members of or participate in the college of supervisors as referred to in Article 248(3) of Directive 2009/138/EC, draw up and maintain group resolution plans. Group-level resolution authorities may, at their discretion, and subject to them meeting the confidentiality requirements laid down in Article 80 of this Directive, involve in the drawing up and maintenance of group resolution plans third-country resolution authorities of jurisdictions in which the group has established subsidiary insurance or reinsurance undertakings or insurance holding companies, or significant branches as defined pursuant to Article 248(8) of Directive 2009/138/EC.
3.   Member States shall ensure that group resolution plans are reviewed, and where appropriate updated, at least every two years, and in any case:
(a)
after any change to the legal or organisational structure, to the business, or to the financial position of the group including any group entity, that could have a material effect on or necessitate a change to the plan;
(b)
when a material change to its financial position that could have a material effect on the effectiveness of the plan or otherwise necessitate a revision of the resolution plan, becomes foreseeable.
4.   The adoption of the group resolution plan shall take the form of a joint decision, as referred to in Article 17, of the group-level resolution authority and the resolution authorities of the subsidiary insurance and reinsurance undertakings and of the entities referred to in Article 1(1), points (b) to (e).
Article 12
Information for the purposes of resolution plans and cooperation of the insurance or reinsurance undertaking
1.   Member States shall ensure that resolution authorities have the power to require insurance and reinsurance undertakings or the ultimate parent undertaking, as applicable, to:
(a)
cooperate as much as necessary in the drawing up of resolution plans or group resolution plans;
(b)
provide them, either directly or through the supervisory authority, with all of the information necessary to draw up and implement resolution plans or group resolution plans.
2.   Supervisory authorities in the Member States concerned shall cooperate with resolution authorities to verify whether some or all of the information referred to in paragraph 1 is already available and shall provide that information to those resolution authorities. Resolution authorities shall obtain all such available information from supervisory authorities before requesting information from insurance and reinsurance undertakings.
3.   EIOPA shall develop draft implementing technical standards to specify procedures and a minimum set of standard forms and templates for the provision of information under this Article, and to specify the content of such information.
EIOPA shall submit those draft implementing technical standards to the Commission by 29 July 2026.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1094/2010.
CHAPTER II
Resolvability
Article 13
Assessment of resolvability
1.   Member States shall ensure that resolution authorities, after having consulted the supervisory authority, assess the extent to which insurance or reinsurance undertakings that are not part of a group are resolvable without the assumption of any extraordinary public financial support besides, where available and applicable, the use of insurance guarantee schemes or of any financing arrangements.
An insurance or reinsurance undertaking shall be deemed resolvable where it is feasible and credible for that undertaking to be wound up under normal insolvency proceedings, or for the resolution authority to resolve that undertaking by applying resolution tools and exercising resolution powers.
2.   Where a resolution authority concludes that resolution action may be necessary in the public interest because winding up under normal insolvency proceedings would not meet the resolution objectives to the same extent, it shall proceed to the following consecutive stages:
(a)
select a preferred resolution action appropriate to achieve the resolution objectives given the structure and business model of the insurance or reinsurance undertaking;
(b)
assess whether it is feasible to apply the selected resolution action effectively within an appropriate timeframe and identify potential impediments to its implementation;
(c)
assess the credibility of the selected resolution action, taking into consideration the likely impact of resolution on the financial systems or real economies of the Member States or the Union and the protection of the collective interest of policy holders, beneficiaries and claimants, with a view to ensuring the continuity of critical functions carried out by the insurance or reinsurance undertaking.
3.   Resolution authorities shall make the resolvability assessment referred to in paragraph 1 at the same time as, and for the purposes of, the drawing up and updating of the resolution plan in accordance with Article 9. When performing the assessment referred to in paragraph 1, resolution authorities shall, as a minimum, examine the resolvability dimensions specified in the Annex.
4.   For the purposes of the assessment of resolvability, resolution authorities may request insurance or reinsurance undertakings to provide all necessary information.
5.   EIOPA shall, by 29 January 2027, issue guidelines in accordance with Article 16 of Regulation (EU) No 1094/2010 to specify further matters and criteria for the assessment of the resolvability of insurance and reinsurance undertakings or groups provided for in paragraph 1 of this Article and in Article 14 of this Directive.
Article 14
Assessment of resolvability for groups
1.   Member States shall ensure that group-level resolution authorities, together with the resolution authorities of subsidiary undertakings, after having consulted the group supervisor and the supervisory authorities of such subsidiary undertakings, assess the extent to which groups are resolvable without the assumption of any extraordinary public financial support besides, where available and applicable, the use of insurance guarantee schemes or of any financing arrangements.
2.   A group shall be deemed resolvable where it is feasible and credible for the resolution authorities either to wind up group entities under normal insolvency proceedings or to resolve that group by applying resolution tools to, and exercising resolution powers with respect to, group entities where they can be easily separated in a timely manner, or by any other means provided for under national law.
The resolution colleges referred to in Article 70 shall take into account the assessment of group resolvability when discharging their functions.
3.   Where a resolution authority concludes that resolution action may be necessary in the public interest because winding up under normal insolvency proceedings would not meet the resolution objectives to the same extent, it shall proceed to the following consecutive stages:
(a)
select preferred resolution actions appropriate to achieve the resolution objectives given the structure and business model of the group;
(b)
assess whether it is feasible to apply the selected resolution action effectively within an appropriate timeframe and identify potential impediments to its implementation;
(c)
assess the credibility of the selected resolution action, taking into consideration the likely impact of resolution on the financial systems or real economies of the Member States or the Union and the protection of the collective interest of policy holders, beneficiaries and claimants, with a view to ensuring the continuity of critical functions carried out by the group.
4.   Group-level resolution authorities shall make the resolvability assessment of groups at the same time as, and for the purposes of, the drawing up and updating of the group resolution plans in accordance with Article 10. The assessment shall be made under the decision-making procedure laid down in Article 11. When performing the assessment referred to in paragraph 1, group-level resolution authorities shall, as a minimum, examine the resolvability dimensions specified in the Annex.
5.   For the purposes of the assessment of resolvability, the group-level resolution authority may request the group entities to provide all necessary information.
Article 15
Power to address or remove impediments to resolvability
1.   Member States shall ensure that, where the assessment carried out in accordance with Article 13 or 14 reveals that there are substantive impediments to the resolvability of an insurance or reinsurance undertaking, the resolution authority notifies that insurance or reinsurance undertaking and the supervisory authority concerned thereof in writing.
2.   The requirement for resolution authorities to draw up resolution plans and for the relevant resolution authorities to reach a joint decision in accordance with Article 17 on group resolution plans referred to in Article 9(1) and Article 11(4) respectively shall be suspended following the notification referred to in paragraph 1 of this Article until the measures to remove the substantive impediments to resolvability have been accepted by the resolution authority pursuant to paragraph 3 of this Article or decided upon pursuant to paragraph 4 of this Article.
3.   Within four months of the date of receipt of a notification referred to in paragraph 1, the insurance or reinsurance undertaking shall propose to the resolution authority possible measures to address or remove the substantive impediments identified in the notification.
The timeline for the implementation of those measures proposed by the undertaking shall take into account the reasons for the substantive impediments.
The resolution authority, after having consulted the supervisory authority, shall assess whether those measures effectively address or remove the substantive impediments.
4.   Resolution authorities that find that the measures proposed by an insurance or reinsurance undertaking in accordance with paragraph 3 do not effectively reduce or remove the impediment concerned, shall, either directly, or indirectly through the supervisory authority, require the insurance or reinsurance undertaking to take any of the alternative measures set out in paragraph 5, and notify such measures in writing to that undertaking, which shall propose a plan to comply with those requirements within one month of receiving such notification.
When identifying alternative measures, resolution authorities shall demonstrate how the measures proposed by the insurance or reinsurance undertaking would not be able to remove the impediments to resolvability and how the alternative measures proposed are proportionate in removing those impediments. Resolution authorities shall take into account the effect of the measures on the business of the insurance or reinsurance undertaking, its stability and its ability to contribute to the economy.
5.   For the purposes of paragraph 4, resolution authorities shall have the power to take at least any of the following alternative measures:
(a)
require the insurance or reinsurance undertaking to revise any intra-group financing agreements or review the absence thereof, or draw up service agreements, whether intra-group or with third parties;
(b)
require the insurance or reinsurance undertaking to limit its maximum individual and aggregate exposures;
(c)
impose specific or regular additional information requirements relevant for resolution purposes;
(d)
require the insurance or reinsurance undertaking to divest specific assets or to restructure liabilities;
(e)
require the insurance or reinsurance undertaking to limit or cease specific existing or proposed activities;
(f)
restrict or prevent the development of new or existing business lines or sale of new or existing products;
(g)
require the insurance or reinsurance undertaking to change the reinsurance strategy;
(h)
require changes to legal or operational structures of the insurance or reinsurance undertaking or any group entity, either directly or indirectly under its control, so as to reduce complexity to ensure that critical functions may be legally and operationally separated from other functions through the application of the resolution tools;
(i)
require the insurance or reinsurance undertaking or a parent undertaking to set up a parent insurance holding company in a Member State or a Union parent insurance holding company;
(j)
where the insurance or reinsurance undertaking is the subsidiary undertaking of a mixed-activity insurance holding company, require that the mixed-activity insurance holding company sets up a separate insurance holding company to control the insurance or reinsurance undertaking, where necessary to facilitate the resolution of the insurance or reinsurance undertaking and to avoid that the application of resolution tools and the exercise of resolution powers has an adverse effect on the non-financial part of the group.
6.   Before identifying any alternative measure referred to in paragraph 5, the resolution authority, after having consulted the supervisory authority, shall duly consider the potential effect of such measure on the soundness and stability of that particular insurance or reinsurance undertaking’s ongoing business and on the internal market.
7.   A notification or decision made pursuant to paragraph 1 or 4 shall:
(a)
contain the reasons for the assessment or determination in question;
(b)
be subject to a right of appeal.
Moreover, a decision made pursuant to paragraph 4 shall indicate how it complies with the requirement for proportionate application laid down in paragraph 4, second subparagraph.
8.   EIOPA shall, by 29 July 2027, issue guidelines in accordance with Article 16 of Regulation (EU) No 1094/2010 to specify further details on the measures provided for in paragraph 5 of this Article and the circumstances in which each measure may be applied.
Article 16
Power to address or remove impediments to resolvability: group treatment
1.   A group-level resolution authority, together with the resolution authorities of subsidiary undertakings, after having consulted the college of supervisors established in accordance with Article 248 of Directive 2009/138/EC, shall consider the assessment referred to in Article 14 within the resolution college and shall take all reasonable steps to reach a joint decision as referred to in Article 17 on the application of measures identified in accordance with Article 15(4) in relation to all relevant group entities.
2.   The group-level resolution authority, in cooperation with the group supervisor and with EIOPA, in accordance with Article 25(1) of Regulation (EU) No 1094/2010, shall prepare a report and submit it to the ultimate parent undertaking and to the resolution authorities of subsidiaries, which shall provide that report to the subsidiary undertakings within their remit. The report shall be prepared after having consulted the supervisory authorities, and shall analyse the substantive impediments to the effective application of resolution tools and the effective exercise of resolution powers in relation to the group. The report shall recommend any proportionate and targeted measures that, in the view of the group-level resolution authority, are necessary or appropriate to remove those impediments, considering the impact of those measures on the group’s business model.
3.   Within four months of the date of receipt of the report, the ultimate parent undertaking may submit observations and propose to the group-level resolution authority alternative measures to address or remove the impediments identified in the report.
The group-level resolution authority, after having consulted the group supervisor, shall assess whether those measures effectively address or remove the substantive impediments.
4.   The group-level resolution authority shall communicate any measure proposed by the ultimate parent undertaking to the authorities that are members of or participate in the resolution college. The group-level resolution authority and the resolution authorities of the subsidiary undertakings, after having consulted the supervisory authorities, shall do everything within their power to reach a joint decision, as referred to in Article 17, within the resolution college regarding the identification of substantive impediments, and, where necessary, regarding the assessment of the measures proposed by the ultimate parent undertaking and the measures required by the authorities in order to address or remove the impediments. When doing so, they shall take into account the potential impact of the measures in all Member States where the group operates.
CHAPTER III
Joint decisions
Article 17
Joint decisions
1.   Group supervisors, supervisory authorities, group-level resolution authorities and resolution authorities shall endeavour to reach the joint decisions referred to in Article 8(2), Article 11(4) and Article 16(4), as applicable, within four months of the date of:
(a)
the transmission by the group supervisor of the group pre-emptive recovery plan in accordance with Article 7(6);
(b)
the transmission by the group-level resolution authority of the information referred to in the Article 11(1), second subparagraph;
(c)
the submission of any observations or the proposal of any alternative measures by the ultimate parent undertaking, or the expiry of the period referred to in Article 16(3), whichever is earlier.
EIOPA may, at the request of a supervisory authority or a resolution authority, assist the group supervisors, supervisory authorities, group-level resolution authorities and resolution authorities in reaching a joint decision in accordance with Article 31(2), point (c), of Regulation (EU) No 1094/2010.
2.   In the absence of a joint decision within the period referred to in paragraph 1, first subparagraph, introductory wording, on any of the following matters, the group supervisor or the group-level resolution authority, as applicable, shall make its own decision thereon:
(a)
the review and assessment of the group pre-emptive recovery plan;
(b)
any measures the ultimate parent undertaking is required to take in accordance with Article 6(4) and (5);
(c)
the group resolution plan;
(d)
the measures referred to in Article 16.
The decision made by the group supervisor or the group-level resolution authority, as applicable, shall be fully reasoned and shall take into account the views and reservations of other supervisory authorities or resolution authorities, as applicable, expressed during the period referred to in paragraph 1, first subparagraph, introductory wording. The decision shall be provided to the ultimate parent undertaking and to the other authorities concerned.
3.   In the absence of a joint decision within the period referred to in paragraph 1, first subparagraph, introductory wording, between the supervisory authorities or resolution authorities on any of the following matters, each supervisory authority or resolution authority, as applicable, of a subsidiary undertaking shall make its own decision thereon:
(a)
whether a pre-emptive recovery plan on an individual basis is to be drawn up for the insurance or reinsurance undertakings under its jurisdiction as referred to in Article 8(2);
(b)
the application at subsidiary level of the measures referred to in Article 6(4) and (5);
(c)
the identification of the substantive impediments, and, where necessary, the assessment of the measures proposed by the ultimate parent undertaking and the measures required by the authorities to address or remove those impediments, as referred to in Article 16(1).
4.   In the absence of a joint decision between the resolution authorities on the adoption of the group resolution plan, as referred to Article 11(4), within the period referred to in paragraph 1, first subparagraph, introductory wording, of this Article, each resolution authority responsible for a subsidiary undertaking shall make its own decision and shall draw up and keep updated a resolution plan for the entities under its jurisdiction. Each resolution authority shall notify its decision to the other members of the resolution college.
5.   Each of the decisions of supervisory or resolution authorities in accordance with paragraph 3 or 4 shall be fully reasoned and shall take into account the views and reservations of the other supervisory authorities, resolution authorities, group supervisors or group-level resolution authorities, as applicable.
6.   The supervisory authorities or resolution authorities that do not disagree with a decision as referred to in paragraphs 3 and 4 may reach a joint decision on a group pre-emptive recovery plan or group resolution plan covering group entities under their jurisdictions.
7.   Where, by the end of the period referred to in paragraph 1, first subparagraph, introductory wording, any of the supervisory authorities or resolution authorities concerned has referred a matter to EIOPA in accordance with Article 19 of Regulation (EU) No 1094/2010, the group supervisor, the group-level resolution authority, the supervisory authority or the resolution authority concerned, as applicable, shall defer its decision under paragraphs 2, 3 and 4 of this Article, await any decision that EIOPA may take in accordance with Article 19(3) of that Regulation, and take its decision in accordance with the decision of EIOPA. The period referred to in paragraph 1, first subparagraph, introductory wording, of this Article shall be deemed to be the conciliation phase as referred to in Article 19(2) of that Regulation. EIOPA shall take its decision within one month. The matter shall not be referred to EIOPA after the end of the period referred to in paragraph 1, first subparagraph, introductory wording, or after a joint decision has been reached. In the absence of a decision by EIOPA within one month after the referral to EIOPA was made, the decision of the group supervisor, group-level resolution authority, supervisory authority or resolution authority for the group or the subsidiary undertaking at an individual level, as applicable, shall apply.
8.   The joint decisions referred to in Article 8(2), Article 11(4), Article 16(4) and paragraph 6 of this Article and the decisions referred to in paragraphs 2, 3 and 4 of this Article shall be recognised as conclusive and shall be applied by the supervisory authorities or resolution authorities in the Member States concerned.
9.   Where joint decisions are taken pursuant to Article 11(4) and, in respect of group resolution plans, paragraph 6 of this Article and where a resolution authority assesses that the subject matter of a disagreement regarding group resolution plans impinges on the fiscal responsibilities of its Member State, the group-level resolution authority shall initiate a reassessment of the group resolution plan.
TITLE III
RESOLUTION
CHAPTER I
Resolution objectives, conditions for resolution and general principles
Article 18
Resolution objectives
1.   Member States shall ensure that resolution authorities, when applying resolution tools and exercising resolution powers, have regard to the resolution objectives listed in paragraph 2, and choose the tools and powers that best achieve the objectives that are relevant in the circumstances of the case.
2.   The resolution objectives are:
(a)
protecting the collective interest of policy holders, beneficiaries and claimants;
(b)
maintaining financial stability, in particular by preventing contagion and by maintaining market discipline;
(c)
ensuring the continuity of critical functions;
(d)
protecting public funds by minimising reliance on extraordinary public financial support.
When pursuing the resolution objective referred to in the first subparagraph, point (c), resolution authorities shall choose those approaches in relation to critical functions that best preserve the continuity of insurance coverage for the policy holders.
When pursuing the resolution objective referred to in the first subparagraph, point (d), resolution authorities shall, to the maximum extent possible, prioritise the use of financing sources other than the budget of the Member States, including financing arrangements as referred to in Article 81 and insurance guarantee schemes, where these are available for that purpose under applicable law.
Member States shall ensure that resolution authorities, when pursuing the resolution objectives, seek to minimise the cost of resolution and avoid destruction of value unless necessary to achieve those resolution objectives.
3.   The resolution objectives are of equal significance, and Member States shall ensure that resolution authorities balance them as appropriate to the nature and circumstances of each case.
Article 19
Conditions for resolution
1.   Member States shall ensure that resolution authorities take a resolution action in relation to an insurance or reinsurance undertaking only where all of the following conditions are met:
(a)
the supervisory authority, after having consulted the resolution authority, or the resolution authority, after having consulted the supervisory authority, has determined that the insurance or reinsurance undertaking is failing or likely to fail;
(b)
there is no reasonable prospect that any alternative private sector measures or supervisory action, including preventive and corrective measures, would prevent the failure of the undertaking within a reasonable timeframe;
(c)
resolution action is necessary in the public interest.
2.   Where a resolution authority takes a resolution action and until that resolution action has been terminated, the supervisory authority shall not adopt measures with respect to the undertaking under resolution unless the resolution authority agrees with such measures.
3.   Member States shall ensure that resolution authorities have the necessary tools, in particular adequate access to any relevant information, for making the determination under paragraph 1, point (a), after having consulted the supervisory authority. The supervisory authority shall provide the resolution authority without delay with any relevant information that the latter requests in order to perform its assessment.
4.   An insurance or reinsurance undertaking shall be deemed to be failing or likely to fail in any of the following circumstances:
(a)
the insurance or reinsurance undertaking is in breach or likely to be in breach of the Minimum Capital Requirement referred to in Title I, Chapter VI, Section 5, of Directive 2009/138/EC and there is no reasonable prospect of compliance being restored;
(b)
the insurance or reinsurance undertaking no longer fulfils the conditions for authorisation or fails seriously in its obligations under the laws and regulations to which it is subject, or there are objective elements to support that the undertaking will, in the near future, seriously fail its obligations in a way that would justify the withdrawal of the authorisation;
(c)
the assets of the insurance or reinsurance undertaking are or there are objective elements to support a determination that the assets of the undertaking will, in the near future, be less than its liabilities;
(d)
the insurance or reinsurance undertaking is unable to pay its debts or other liabilities, including payments to policy holders or beneficiaries, as they fall due, or there are objective elements to support a determination that the undertaking will, in the near future, be in such a situation;
(e)
extraordinary public financial support is required.
5.   For the purposes of paragraph 1, point (c), a resolution action shall be in the public interest where such action is necessary for the achievement of, and is proportionate to, one or more of the resolution objectives and the winding-up of the undertaking under normal insolvency proceedings, including with the use of insurance guarantee schemes applicable to that undertaking if the conditions for normal insolvency proceedings are met, would not meet those objectives to the same extent.
Article 20
Conditions for resolution with regard to parent undertakings and holding companies
1.   Member States shall ensure that resolution authorities may take resolution action in relation to any of the entities referred to in Article 1(1), points (b) to (e), where that entity meets the conditions laid down in Article 19(1), 
mutatis mutandis
.
2.   Where the subsidiary insurance or reinsurance undertakings of a mixed-activity insurance holding company are held directly or indirectly by an intermediate insurance holding company, Member States shall ensure that resolution actions for the purposes of group resolution are taken in relation to the intermediate insurance holding company, and shall not take resolution actions for the purposes of group resolution in relation to the mixed-activity insurance holding company.
3.   Subject to paragraph 2, resolution authorities may take resolution action with regard to any of the entities referred to in Article 1(1), points (c) to (e), even where those entities do not meet the conditions laid down in paragraph 1 of this Article, where all of the following conditions apply:
(a)
one or more of the subsidiary insurance or reinsurance undertakings meet the conditions established in Article 19(1);
(b)
the assets and liabilities of the subsidiary insurance or reinsurance undertakings are such that their failure threatens another insurance or reinsurance undertaking of the group or the group as a whole, or the insolvency law of the Member State requires that groups be treated as a whole;
(c)
resolution action with regard to the entities referred to in Article 1(1), points (c) to (e), is necessary for the resolution of the subsidiary insurance or reinsurance undertakings or for the resolution of the group as a whole.
Article 21
Proceedings in respect of undertakings that are not subject to resolution action
Member States shall ensure that insurance or reinsurance undertakings that meet the conditions laid down in Article 19(1), points (a) and (b), but not the condition laid down in Article 19(1), point (c), are made subject to winding-up proceedings as defined in Article 268(1), point (d), of Directive 2009/138/EC, or other proceedings under national law opened and monitored by the competent authorities as defined in Article 268(1), point (a), of Directive 2009/138/EC, ensuring an orderly exit from the market.
Article 22
General principles governing resolution
1.   Member States shall ensure that resolution authorities, when they apply resolution tools and exercise resolution powers, take all appropriate measures to ensure that the resolution action is taken in accordance with the following principles:
(a)
the shareholders of the undertaking under resolution bear first losses;
(b)
creditors of the undertaking under resolution bear losses after the shareholders in accordance with the order of priority of their claims under normal insolvency proceedings, save as expressly provided for otherwise in this Directive;
(c)
the administrative, management or supervisory body and the senior management of the undertaking under resolution are replaced, except where the retention, in whole or in part, of that body or the senior management is considered necessary for the achievement of the resolution objectives;
(d)
the administrative, management or supervisory body and the senior management of the undertaking under resolution provide all assistance necessary for the achievement of the resolution objectives;
(e)
natural and legal persons are made liable under civil or criminal law for their responsibility for the failure of the undertaking under resolution;
(f)
except where otherwise provided for in this Directive, creditors of the same class are treated equally;
(g)
no shareholder or creditor incurs greater losses than they would have incurred if the insurance or reinsurance undertaking had been wound up under normal insolvency proceedings in accordance with the safeguards in Articles 55 to 57;
(h)
resolution action is taken in accordance with the safeguards in this Directive.
2.   Where the insurance or reinsurance undertaking is part of a group, resolution authorities shall apply resolution tools and exercise resolution powers in a way that minimises, in particular in the countries where the group operates:
(a)
the impact on other group entities and on the group as a whole;
(b)
the adverse effects on policy holders, the real economy and financial stability in the Union and in Member States.
3.   When applying resolution tools and exercising resolution powers, Member States shall ensure that they comply with the Union State aid framework.
4.   Where resolution tools are applied, the entity to which those tools are applied shall be considered the subject of bankruptcy proceedings or analogous insolvency proceedings for the purposes of Article 5(1) of Council Directive 2001/23/EC 
(
19
)
.
5.   When applying resolution tools and exercising resolution powers, resolution authorities shall inform and consult employee representatives of the undertaking concerned where appropriate.
6.   Resolution authorities shall apply resolution tools and exercise resolution powers without prejudice to provisions on the representation of employees in management bodies as provided for in national law or practice.
CHAPTER II
Valuation
Article 23
Valuation for the purposes of resolution
1.   Resolution authorities shall ensure that any resolution action is taken on the basis of a valuation ensuring a fair, prudent and realistic assessment of the assets, liabilities, rights and obligations of an entity as referred to in Article 1(1), points (a) to (e).
2.   Before the resolution authority places an entity as referred to in Article 1(1), points (a) to (e), under resolution, it shall ensure that a first valuation is carried out to determine whether the conditions for resolution under Article 19(1) or Article 20(3) are met.
3.   After the resolution authority has decided to place an entity referred to in Article 1(1), points (a) to (e), under resolution, it shall ensure that a second valuation is carried out to:
(a)
inform the decision on the appropriate resolution action to be taken;
(b)
ensure that any losses of that entity are fully recognised at the moment the resolution tools are applied;
(c)
inform the decision on the extent of the cancellation or dilution of instruments of ownership;
(d)
inform the decision on the extent of the write-down or conversion of any unsecured liabilities, including debt instruments;
(e)
where the bridge undertaking tool is applied, inform the decision on the assets, liabilities, rights and obligations or instruments of ownership that may be transferred to the bridge undertaking, and inform the decision on the value of any consideration that may be paid to the undertaking under resolution or, where relevant, to the holders of the instruments of ownership;
(f)
where the sale-of-business tool is applied, inform the decision on the assets, liabilities, rights and obligations or instruments of ownership that may be transferred to the third-party purchaser and to inform the resolution authority’s understanding of what constitutes commercial terms for the purposes of Article 31.
4.   The valuation referred to in paragraph 3 shall be consistent with Article 75 of Directive 2009/138/EC. However, that valuation may, where appropriate, be adjusted to reflect that the assumption that the undertaking pursues its business as a going concern is not met, and to reflect the specific circumstances related to the use of resolution tools.
5.   The valuations referred to in paragraphs 2 and 3 may be subject to an appeal in accordance with Article 67 only together with the decision to apply a resolution tool or to exercise a resolution power.
Article 24
Requirements for valuation
1.   Member States shall ensure that the valuations referred to in Article 23 are carried out by any of the following:
(a)
a person independent from any public authority and from the entity referred to in Article 1(1), points (a) to (e);
(b)
the resolution authority, where those valuations cannot be carried out by a person as referred to in point (a).
2.   The valuations referred to in Article 23 shall be considered definitive where they have been carried out by the person referred to in paragraph 1, point (a), of this Article and all the requirements laid down in paragraphs 3 to 5 of this Article are fulfilled.
3.   Without prejudice to the Union State aid framework, a definitive valuation shall be based on prudent assumptions and shall not assume any potential provision of extraordinary public financial support from the point in time at which resolution action is taken.
4.   A definitive valuation shall be supplemented by the following information held by the entity referred to in Article 1(1), points (a) to (e):
(a)
an updated financial statement and an updated economic valuation, in accordance with Directive 2009/138/EC, of the entity;
(b)
a report on the financial position of the entity, including, where relevant, an evaluation by an independent actuarial function of the entity’s technical provisions referred to in Title I, Chapter VI, Section 2, of Directive 2009/138/EC;
(c)
any additional information on the market and accounting values of the assets, technical provisions referred to in Title I, Chapter VI, Section 2, of Directive 2009/138/EC, and other liabilities of the entity.
5.   A definitive valuation shall indicate the subdivision of the creditors in classes in accordance with their priority levels under the applicable insolvency law. The definitive valuation shall also contain an estimate of the treatment that each class of shareholders and creditors would have been expected to receive if the entity concerned were wound up under normal insolvency proceedings.
The estimate referred to in the first subparagraph shall not prejudice the valuation referred to in Article 56.
6.   EIOPA shall develop draft regulatory technical standards to specify:
(a)
the circumstances in which a person is deemed to be independent from both the resolution authority and the entity referred to in Article 1(1), points (a) to (e), for the purposes of paragraph 1 of this Article;
(b)
the methodologies for assessing the value of the assets and liabilities of the insurance or reinsurance undertaking in the context of resolution;
(c)
the separation of the valuations under Articles 23 and 56 of this Directive.
EIOPA shall submit those draft regulatory technical standards to the Commission by 29 July 2027.
Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.
Article 25
Provisional and definitive valuations
1.   Valuations as referred to in Article 23 that do not meet the requirements laid down in Article 24(2) shall be considered provisional valuations.
Provisional valuations shall contain a buffer for additional losses and an appropriate justification for that buffer.
2.   Resolution authorities that take resolution action on the basis of a provisional valuation shall ensure that a definitive valuation is carried out as soon as possible.
Those resolution authorities shall ensure that the definitive valuation referred to in the first subparagraph:
(a)
allows for full recognition of any losses of the entity referred to in Article 1(1), points (a) to (e), in its books;
(b)
informs a decision to write back creditors’ claims or to increase the value of the consideration paid, in accordance with paragraph 3.
3.   Where the definitive valuation’s estimate of the net asset value of the entity referred to in Article 1(1), points (a) to (e), is higher than the provisional valuation’s estimate of the net asset value of that entity, the resolution authority may:
(a)
increase the value of the claims of affected creditors which have been written down or restructured;
(b)
require a bridge undertaking to make a further payment of consideration in respect of the assets, liabilities, rights and obligations to the undertaking under resolution or, as the case may be, to the owners of the instruments of ownership.
4.   EIOPA shall develop draft regulatory technical standards to specify, for the purposes of paragraph 1 of this Article, the methodology for calculating the buffer for additional losses to be included in provisional valuations.
EIOPA shall submit those draft regulatory technical standards to the Commission by 29 July 2027.
Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.
CHAPTER III
Resolution tools
Section 1
General principles
Article 26
General principles on resolution tools
1.   Member States shall ensure that resolution authorities have the powers necessary to apply the resolution tools to an entity referred to in Article 1(1), points (a) to (e), that meets the conditions for resolution referred to in Article 19(1) or Article 20(3).
2.   Where a resolution authority decides to apply a resolution tool to an entity referred to in Article 1(1), points (a) to (e), and that resolution action would result in losses being borne by creditors, in particular policy holders, or would result in their claims being restructured or converted, the resolution authority shall exercise the power to write down or convert capital instruments and eligible liabilities in accordance with Article 35 immediately before or together with the application of the resolution tool.
Any proceeds, generated after recovery of any reasonable expenses properly incurred in connection with the use of the resolution tools or the exercising of resolution powers as a result of the application of any resolution tool in accordance with paragraph 5, shall first compensate the entity’s policy holders and other creditors to the extent that their claims have been written down without being fully compensated.
The conversion of eligible liabilities into capital instruments may be applied to insurance claims only in cases where the resolution authority justifies that the resolution objectives cannot be achieved through other resolution tools, or that the conversion of insurance claims would lead to better protection for policy holders compared to the use of any other resolution tool and the write-down of their claims.
3.   The resolution tools are the following:
(a)
the solvent run-off tool;
(b)
the sale-of-business tool;
(c)
the bridge undertaking tool;
(d)
the asset and liability separation tool;
(e)
the write-down or conversion tool.
Resolution authorities may apply the resolution tools individually or in any combination, except for the asset and liability separation tool, which shall be applied only in combination with another resolution tool.
4.   Where only the sale-of-business tool and the bridge undertaking tool are used, and where those tools are used to transfer only part of the assets, rights or liabilities of the undertaking under resolution, the residual insurance or reinsurance undertaking or a residual entity as referred to in Article 1(1), points (b) to (e), from which the assets, rights or liabilities have been transferred, shall be wound up under normal insolvency proceedings. Such winding-up shall be done within a reasonable timeframe, having regard to any need for that residual insurance or reinsurance undertaking or residual entity referred to in Article 1(1), points (b) to (e), to provide services or support pursuant to Article 45 in order to enable the recipient to carry out the activities or services acquired by virtue of that transfer, and any other reason that the continuation of the residual insurance or reinsurance undertaking or a residual entity as referred to in Article 1(1), points (b) to (e), is necessary to achieve the resolution objectives or comply with the principles laid down in Article 22.
5.   The resolution authority and any financing arrangement acting pursuant to Article 81 or the resolution authority on behalf of any financing arrangement may recover any reasonable expenses properly incurred in connection with the application of the resolution tools or the exercising of the resolution powers in one or more of the following ways:
(a)
as a deduction from any consideration paid by a recipient to the undertaking under resolution or, as the case may be, to the owners of the shares or other instruments of ownership;
(b)
from the undertaking under resolution, as a preferred creditor;
(c)
from any proceeds generated as a result of the termination of the activities of the bridge undertaking, the asset and liability management vehicle or the insurance or reinsurance undertaking in solvent run-off, as a preferred creditor.
6.   Member States shall ensure that rules of national insolvency law on the voidability or unenforceability of legal acts detrimental to creditors do not apply to transfers of assets, rights or liabilities from an undertaking under resolution to another entity by virtue of the application of a resolution tool or the exercise of a resolution power.
7.   Member States may confer upon resolution authorities additional tools and powers exercisable where an entity referred to in Article 1(1), points (a) to (e), meets the conditions for resolution referred to in Article 19(1) or Article 20(3), provided that:
(a)
when applied to a cross-border group, those additional tools and powers do not pose obstacles to effective group resolution; and
(b)
those tools and powers are consistent with the resolution objectives and the general principles governing resolution laid down in Article 22.
8.   Member States shall ensure that, to the extent that any of the resolution tools is not applicable to an entity within the scope of Article 1(1) as a result of its specific legal form of mutual undertaking or cooperative society, resolution authorities have the powers necessary to apply tools which are as similar as possible to those listed in paragraph 3 of this Article, including in terms of their effects.
Section 2
The solvent run-off tool
Article 27
The solvent run-off tool
1.   Member States shall ensure that resolution authorities have the power to place the undertaking under resolution in a solvent run-off procedure to terminate the activities of that undertaking, and to prohibit the undertaking under resolution to underwrite new insurance and reinsurance business.
2.   Member States shall ensure that, in the event the authorisation has been withdrawn by the supervisory authority, the insurance or reinsurance undertaking to which the solvent run-off tool has been applied meets the Minimum Capital Requirement laid down in Title I, Chapter VI, Section 5, of Directive 2009/138/EC immediately following the application of that tool.
3.   In the event of withdrawal of authorisation by the supervisory authority, Member States shall ensure that the insurance or reinsurance undertaking under the solvent run-off tool continues to be subject to the general rules and objectives of insurance supervision set out in Title I, Chapter III, of Directive 2009/138/EC, until termination of its activities in accordance with paragraph 8 of this Article.
4.   Resolution authorities shall ensure that an insurance or reinsurance undertaking under resolution in a solvent run-off is capable of retaining adequately trained and competent staff to ensure the orderly continuation of its insurance activities in run-off until its liquidation.
5.   Resolution authorities shall monitor, in close cooperation with supervisory authorities, the cash flow, as well as the costs and expenses of an insurance or reinsurance undertaking under resolution to preserve its value and marketability.
6.   Resolution authorities shall, in close cooperation with supervisory authorities, assess intended changes to the composition of assets, monitor closely reinsurance arrangements and require, at least on a quarterly basis, independent actuarial reviews of the technical provisions and reserves.
7.   In application of the solvent run-off tool, resolution authorities may restrict or prohibit any remuneration of equity and instruments treated as equity, including dividend payments, and may restrict or prohibit any payments of variable remuneration and discretionary pension benefits.
8.   Resolution authorities shall take a decision that an undertaking under resolution in solvent run-off has to be wound-up in any of the following cases, whichever occurs first:
(a)
all or substantially all of the assets, rights or liabilities of the undertaking under resolution in solvent run-off are sold to a third-party purchaser;
(b)
the assets of the undertaking under resolution in solvent run-off are completely wound down and its liabilities are completely discharged.
9.   Where the solvent run-off tool is used and where the net asset value of the undertaking under resolution in solvent run-off has become negative, the resolution authority shall assess whether to wind up the undertaking under normal insolvency proceedings or to apply another resolution tool.
In the event the Minimum Capital Requirement laid down in Title I, Chapter VI, Section 5, of Directive 2009/138/EC is not met, the resolution authority shall assess, in close cooperation with the supervisory authority, whether the undertaking should be wound up under normal insolvency proceedings, or another resolution tool should be applied.
Section 3
The asset and liability separation tool, the sale-of-business tool and the bridge undertaking tool
Article 28
Principles for the application of the asset and liability separation tool, the sale-of-business tool and the bridge undertaking tool
1.   Member States shall ensure that, subject to Article 31(5) and (6), and Article 67, resolution authorities have the power to use the asset and liability separation tool, the sale-of-business tool and the bridge undertaking tool without obtaining the consent of the shareholders of the undertaking under resolution or any third party, other than the purchaser or the bridge undertaking, and without complying with any procedural requirements under company or securities law, other than those laid down in Article 29.
2.   Subject to Article 26(2) and (5), any consideration paid by the purchaser or the bridge undertaking shall benefit:
(a)
the owners of the shares or of other instruments of ownership, where such shares or such other instruments of ownership issued by the undertaking under resolution have been transferred from the holders of those shares or instruments to the purchaser or the bridge undertaking;
(b)
the undertaking under resolution, where some or all of the assets or liabilities of the undertaking under resolution have been transferred to the purchaser or the bridge undertaking.
3.   Subject to Article 26(2) and (5), any consideration paid by an asset and liability management vehicle as referred to in Article 30(2) in respect of the assets, rights or liabilities acquired directly from the undertaking under resolution shall benefit the undertaking under resolution. Consideration may be paid in the form of debt issued by the asset and liability management vehicle.
4.   Transfers made by using the asset and liability separation tool, the sale-of-business tool or the bridge undertaking tool shall be subject to the safeguards referred to in Title III, Chapter V.
5.   Resolution authorities may use the asset and liability separation tool, the sale-of-business tool and the bridge undertaking tool more than once to make supplemental transfers where necessary to achieve the resolution objectives.
6.   Member States shall ensure that a purchaser or bridge undertaking as referred to in paragraph 1 may continue to exercise the rights of membership and access to, where relevant, payment, clearing and settlement systems, stock exchanges and insurance guarantee schemes of the undertaking under resolution, provided that that purchaser or bridge undertaking meets the membership and participation criteria for participation in such systems.
In cases where not all criteria listed in the first subparagraph are met, Member States shall ensure that, where relevant:
(a)
membership or participation in payment, clearing and settlement systems, stock exchanges and insurance guarantee schemes is not denied on the grounds that the purchaser or the bridge undertaking does not possess a rating from a credit rating agency, or that such rating is not commensurate with the rating levels required to be granted access to such systems;
(b)
where the purchaser or the bridge undertaking does not meet the membership or participation criteria of a payment, clearing or settlement system, stock exchange or insurance guarantee scheme, the rights referred to in the first subparagraph are exercised for a period specified by the resolution authorities, not exceeding 24 months, and renewable on application by the purchaser or the bridge undertaking to the resolution authority.
7.   Without prejudice to Title III, Chapter V, shareholders or creditors of the undertaking under resolution and other third parties whose assets, rights or liabilities are not transferred by using the asset and liability separation tool, the sale-of-business tool or the bridge undertaking tool, shall not have any rights or claims over or in relation to the assets, rights or liabilities transferred or over or in relation to the administrative, management or supervisory body or senior management of the bridge undertaking or the assets and liabilities management vehicle.
Article 29
Procedural requirements regarding sales of business, assets, rights or liabilities in resolution
1.   Subject to paragraph 3, Member States shall ensure that, where resolution authorities seek to apply the sale-of-business tool, or sell a bridge undertaking, or its assets, rights or liabilities, the undertaking under resolution, the bridge undertaking or the assets, rights, liabilities, shares or other instruments of ownership concerned are marketed in accordance with the requirements set out in paragraph 2. Pools of rights, assets and liabilities may be marketed separately.
2.   Without prejudice to the Union State aid framework, the marketing referred to in paragraph 1 shall comply with the following requirements:
(a)
it shall be as transparent as possible and shall not materially misrepresent the assets, rights, liabilities, shares or other instruments of ownership of the undertaking or bridge undertaking that a resolution authority intends to transfer;
(b)
it shall not unduly favour, or discriminate between, potential purchasers;
(c)
it shall be free from any conflict of interest;
(d)
it shall not confer any unfair advantage on a potential purchaser;
(e)
it shall take account of the need to effect a rapid resolution action;
(f)
it shall be aimed at maximising, as far as possible, the sale price for the shares or other instruments of ownership, assets, rights or liabilities involved.
Those requirements shall not prevent resolution authorities from soliciting particular potential purchasers.
Any public disclosure of the marketing of an entity referred to in Article 1(1), points (a) to (e), or of the bridge undertaking that would otherwise be required in accordance with Article 17(1) of Regulation (EU) No 596/2014 may be delayed in accordance with Article 17(4) or (5) of that Regulation.
3.   Resolution authorities may adopt a reasoned decision not to comply with the requirement to market a sale where they determine that compliance with the requirements laid down in paragraph 2 would be likely to undermine one or more of the resolution objectives.
Article 30
The asset and liability separation tool
1.   Member States shall ensure that resolution authorities have the power to transfer assets, rights or liabilities of an undertaking under resolution or a bridge undertaking to one or more asset and liability management vehicles.
2.   For the purposes of the asset and liability separation tool, an asset and liability management vehicle shall be a legal person that:
(a)
is wholly or partially owned by one or more public authorities which may include the resolution authority and is controlled by the resolution authority; and
(b)
has been created for the purpose of receiving some or all of the assets, rights and liabilities of one or more undertakings under resolution or a bridge undertaking.
3.   The asset and liability management vehicle shall manage the portfolios transferred to it with a view to maximising their value through the sale of those portfolios or an orderly winding-down.
4.   Member States shall ensure that the operation of an asset and liability management vehicle complies with the following requirements:
(a)
the resolution authority concerned has approved the asset and liability management vehicle’s constitutional documents;
(b)
subject to the asset and liability management vehicle’s ownership structure, the resolution authority concerned either appoints or approves the vehicle’s administrative, management or supervisory body;
(c)
the resolution authority concerned approves the remuneration of the members of the administrative, management or supervisory body and specifies their responsibilities;
(d)
the resolution authority concerned approves the strategy and risk profile of the asset and liability management vehicle.
5.   Resolution authorities may exercise the power specified in paragraph 1 to transfer assets, rights or liabilities only in conjunction with other resolution tools and where any of the following situations occurs:
(a)
the situation of the particular market for those assets, rights or liabilities is such that the liquidation of those assets, rights or liabilities under normal insolvency proceedings could have an adverse effect on one or more financial markets;
(b)
such a transfer is necessary to facilitate the use of the solvent run-off tool or to ensure the proper functioning of the undertaking under resolution or a bridge undertaking;
(c)
such a transfer is necessary to maximise liquidation proceeds.
6.   When applying the asset and liability separation tool, resolution authorities shall, in accordance with Article 23 and in accordance with the Union State aid framework, determine the consideration for which assets, rights and liabilities are transferred to the asset and liability management vehicle. The consideration may have nominal or negative value.
7.   Where resolution authorities have applied the bridge undertaking tool, asset and liability management vehicles may, subsequent to the application of the bridge undertaking tool, acquire assets, rights or liabilities from the bridge undertaking.
8.   Resolution authorities may transfer assets, rights or liabilities from the undertaking under resolution to one or more asset and liability management vehicles on more than one occasion and transfer assets, rights or liabilities back from one or more asset and liability management vehicles to the undertaking under resolution in any of the following situations:
(a)
the possibility that the assets, rights or liabilities might be transferred back is stated expressly in the instrument under which the transfer was made;
(b)
the assets, rights or liabilities do not fall within the classes of, or meet the conditions for transfer of, assets, rights or liabilities specified in the instrument under which the transfer was made.
In either of the cases referred in the first subparagraph, points (a) and (b), the transfer back may be made within any period, and shall comply with any other conditions, stated in that instrument for the relevant purpose.
The undertaking under resolution shall be obliged to take back any assets, rights or liabilities transferred in accordance with the first subparagraph, points (a) and (b).
9.   The objectives of an asset and liability management vehicle shall not imply any duty or responsibility to shareholders or creditors of the undertaking under resolution. The members of the administrative, management or supervisory body or senior management of the asset and liability management vehicle shall have no liability to such shareholders or creditors for acts or omissions in the discharge of their duties, unless such acts or omissions involved gross negligence or serious misconduct under national law which directly affected the rights of such shareholders or creditors.
Member States may further limit the liability of an asset and liability management vehicle, and of the members of its administrative, management or supervisory body or senior management for acts and omissions in the discharge of their duties.
Article 31
The sale-of-business tool
1.   Member States shall ensure that resolution authorities have the power to transfer to a purchaser other than a bridge undertaking:
(a)
shares or other instruments of ownership issued by an undertaking under resolution;
(b)
all or any assets, rights or liabilities of an undertaking under resolution.
2.   A transfer made pursuant to paragraph 1 shall be made on commercial terms, having regard to the circumstances, and in accordance with the Union State aid framework.
Resolution authorities shall take all reasonable steps to obtain commercial terms for the transfer that are consistent with the valuation conducted under Article 23, having regard to the circumstances of the case.
3.   Resolution authorities may, with the consent of the purchaser, revert the executed transfers where justified by the circumstances of the case. The undertaking under resolution or the original owners shall be obliged to take back any transferred shares or other instruments of ownership, or assets, rights or liabilities.
4.   Purchasers shall be required to have the appropriate authorisation to carry out the business they acquire when a transfer as referred to in paragraph 1 is made. Supervisory authorities shall ensure that any application for such authorisation is considered, in conjunction with the transfer, in a timely manner.
5.   By way of derogation from Articles 57 to 62 of Directive 2009/138/EC, where a transfer of shares or of other instruments of ownership by virtue of an application of the sale-of-business tool would result in the acquisition of or increase in a qualifying holding in an insurance or reinsurance undertaking as referred to in Article 57(1) of Directive 2009/138/EC, the supervisory authority of that insurance or reinsurance undertaking shall carry out the assessment required under those Articles in a timely manner that does not delay the application of the sale-of-business tool or prevent the resolution action from achieving the resolution objectives.
6.   Member States shall ensure that, where the supervisory authority has not completed the assessment referred to in paragraph 5 from the date of the transfer, the following apply:
(a)
such a transfer of shares or other instruments of ownership to the acquirer shall have immediate legal effect;
(b)
during the assessment period and during any divestment period provided for in point (f), the acquirer’s voting rights attached to such shares or other instruments of ownership shall be suspended and vested solely in the resolution authority, which shall have no obligation to exercise any such voting rights and which shall have no liability whatsoever for exercising or refraining from exercising any such voting rights;
(c)
during the assessment period and during any divestment period provided for in point (f), the penalties and other measures for infringing the requirements for acquisitions or disposals of qualifying holdings laid down in Article 62 of Directive 2009/138/EC shall not apply to such a transfer of shares or other instruments of ownership;
(d)
promptly upon completion of its assessment, the supervisory authority shall notify the resolution authority and the acquirer in writing of whether it approves or, in accordance with Article 58(4) of Directive 2009/138/EC, opposes such a transfer of shares or other instruments of ownership to the acquirer;
(e)
where the supervisory authority approves such a transfer of shares or other instruments of ownership to the acquirer, the voting rights attached to such shares or other instruments of ownership shall be deemed to be fully vested in the acquirer immediately upon receipt by the resolution authority and the acquirer of such an approval notice from the supervisory authority;
(f)
where the supervisory authority opposes such a transfer of shares or other instruments of ownership to the acquirer:
(i)
the voting rights attached to such shares or other instruments of ownership as provided for in point (b) shall remain in full force and effect;
(ii)
the resolution authority may require the acquirer to divest such shares or other instruments of ownership within a divestment period determined by the resolution authority having taken into account prevailing market conditions;
(iii)
where the acquirer does not comply with the request provided for in point (ii), the supervisory authority, with the consent of the resolution authority, may impose on the acquirer penalties and other measures for infringing the requirements for acquisitions or disposals of qualifying holdings laid down in Article 62 of Directive 2009/138/EC.
7.   For the purpose of exercising the rights to provide services or to establish itself in another Member State in accordance with Directive 2009/138/EC, the purchaser shall be considered to be a continuation of the undertaking under resolution, and may continue to exercise any such right that was exercised by the undertaking under resolution in respect of the assets, rights or liabilities transferred.
Article 32
Bridge undertaking tool
1.   Member States shall ensure that resolution authorities have the power to transfer to a bridge undertaking:
(a)
shares or other instruments of ownership issued by one or more undertakings under resolution;
(b)
all or any assets, rights or liabilities of one or more undertakings under resolution.
2.   The bridge undertaking shall be a legal person that meets all of the following requirements:
(a)
it is wholly or partially owned by one or more public authorities which may include the resolution authority or, where applicable, an insurance guarantee scheme and is controlled by the resolution authority;
(b)
it is created for the purpose of receiving and holding some or all of the shares or other instruments of ownership issued by an undertaking under resolution or some or all of the assets, rights and liabilities of one or more undertakings under resolution with a view to achieving the resolution objectives and selling the undertaking under resolution.
3.   When applying the bridge undertaking tool, resolution authorities shall ensure that the total value of liabilities transferred to the bridge undertaking does not exceed the total value of the rights and assets transferred from the undertaking under resolution.
4.   Following an application of the bridge undertaking tool, resolution authorities may, where justified by the circumstances, revert the executed transfers, and the undertaking under resolution or the original owners shall be obliged to take back any transferred assets, rights or liabilities, or shares or other instruments of ownership, where justified by the circumstances of the case, in any of the following situations:
(a)
the possibility that the specific shares or other instruments of ownership, assets, rights or liabilities might be transferred back is stated expressly in the instrument by which the transfer was made;
(b)
the specific shares or other instruments of ownership, assets, rights or liabilities do not fall within the classes of, or meet the conditions for transfer of, shares or other instruments of ownership, assets, rights or liabilities specified in the instrument by which the transfer was made.
A transfer back as referred to in the first subparagraph may be made within any period and shall comply with any other conditions stated in the instrument by which the transfer was made.
5.   Following an application of the bridge undertaking tool, resolution authorities may transfer shares or other instruments of ownership, or assets, rights or liabilities from the bridge undertaking to a third-party purchaser.
6.   A bridge undertaking shall be considered to be a continuation of the undertaking under resolution, and be able to continue to exercise any right that was exercised by the undertaking under resolution in respect of the assets, rights or liabilities transferred.
7.   The objectives of a bridge undertaking shall not imply any duty or responsibility to shareholders or creditors of the undertaking under resolution. The members of the administrative, management or supervisory body or senior management of the bridge undertaking shall have no liability to such shareholders or creditors for acts or omissions in the discharge of their duties, unless such acts or omissions involved gross negligence or serious misconduct under national law which directly affected the rights of such shareholders or creditors.
Member States may further limit the liability of a bridge undertaking and of the members of its administrative, management or supervisory body or senior management in accordance with national law for acts and omissions in the discharge of their duties.
Article 33
Operation of a bridge undertaking
1.   Member States shall ensure that the operation of a bridge undertaking respects the following requirements:
(a)
the resolution authority has approved the bridge undertaking’s constitutional documents;
(b)
subject to the bridge undertaking’s ownership structure, the resolution authority either appoints or approves the bridge undertaking’s administrative, management or supervisory body;
(c)
the resolution authority approves the remuneration of the members of the administrative, management or supervisory body and determines their responsibilities;
(d)
the resolution authority approves the strategy and risk profile of the bridge undertaking;
(e)
the bridge undertaking is authorised in accordance with Directive 2009/138/EC and has the necessary authorisation under the applicable national law to carry out the activities or services that it acquires by virtue of a transfer made pursuant to Article 42 of this Directive;
(f)
the bridge undertaking complies with the requirements of, and is subject to supervision in accordance with, Directive 2009/138/EC;
(g)
the operation of the bridge undertaking complies with the Union State aid framework and the resolution authority may specify restrictions on its operations accordingly.
Notwithstanding the provisions referred to in the first subparagraph, points (e) and (f), and where necessary to meet the resolution objectives, a bridge undertaking may be established and authorised without complying with Directive 2009/138/EC for a short period at the beginning of its operation. To that end, the resolution authority shall submit a request in that sense to the supervisory authority. Where the supervisory authority decides to grant such an authorisation, it shall indicate the period for which the bridge undertaking is waived from complying with the requirements of Directive 2009/138/EC. That period shall not exceed 24 months.
2.   Subject to any restrictions imposed by Union or national competition rules, the management of the bridge undertaking shall operate the bridge undertaking to achieve the resolution objectives and to sell the undertaking under resolution or the transferred assets, rights or liabilities to one or more private sector purchasers as soon as market conditions are appropriate.
3.   Resolution authorities shall decide that an entity is no longer a bridge undertaking in any of the following situations, whichever occurs first:
(a)
the bridge undertaking merges with another entity;
(b)
the bridge undertaking ceases to meet the requirements of Article 32(2);
(c)
all or substantially all of the bridge undertaking’s assets, rights or liabilities are sold to a third-party purchaser;
(d)
the bridge undertaking’s assets are completely wound down and its liabilities are completely discharged.
4.   Subject to Article 26(2) and (5), any proceeds generated as a result of the termination of the operation of the bridge undertaking shall benefit the shareholders of the bridge undertaking.
Article 34
Transfer to insurance guarantee schemes
1.   By way of derogation from Articles 32 and 33, Member States may provide that an appropriate insurance guarantee scheme is assigned with the duties and rights of a bridge undertaking. While ensuring the interests of policy holders, continuity of insurance relationships and settlement of claims, and ensuring that the objectives of this Directive are still adequately met, Member States may provide for a transfer, to such insurance guarantee scheme, of:
(a)
shares or other instruments of ownership issued by one or more undertakings under resolution; or
(b)
all or any assets, rights or liabilities of one or more undertakings under resolution.
Resolution authorities shall ensure that the total value of liabilities transferred to the insurance guarantee scheme does not exceed the total value of the rights and assets transferred from the undertaking under resolution.
2.   Member States shall ensure that an insurance guarantee scheme assigned with the duties and rights of a bridge undertaking respects the following requirements:
(a)
the resolution authority has approved the constitutional documents of the bridge undertaking;
(b)
the resolution authority approves the remuneration of the members of the administrative, management or supervisory body and determines their responsibilities;
(c)
the bridge undertaking shall not conclude new insurance contracts, or change existing insurance contracts in a way that could increase the insurance claims against the bridge undertaking;
(d)
the insurance guarantee scheme is subject to general rules and objectives of insurance supervision to ensure an adequate level of policy holder protection.
Point (b) of the first subparagraph shall not apply to an insurance guarantee scheme assigned with the duties and rights of a bridge undertaking if any transferred assets, rights, liabilities or rights of ownership are segregated from the other assets, rights and liabilities of the insurance guarantee scheme and remuneration is not paid from the transferred assets.
3.   Member States shall ensure that the funding of an insurance guarantee scheme assigned with the duties and rights of a bridge undertaking is adequate to continue insurance relationships and guarantee the settlement of insurance claims.
Section 4
The write-down or conversion tool
Article 35
Objective and scope of the write-down or conversion tool
1.   Member States shall ensure that resolution authorities may apply the write-down or conversion tool to meet the resolution objectives for any of the following purposes:
(a)
to recapitalise an entity as referred to in Article 1(1), points (a) to (e), that meets the conditions for resolution referred to in Article 19(1) and Article 20(3) to the extent sufficient to apply the solvent run-off tool and to maintain its authorisation under Directive 2009/138/EC;
(b)
to convert to equity or reduce the principal amount of claims, including insurance claims, or debt instruments that are transferred:
(i)
to a bridge undertaking; or
(ii)
under the asset and liability separation tool or the sale-of-business tool.
When applying the write-down or conversion tool to insurance claims, resolution authorities may also restructure the terms of the related insurance contracts to achieve the resolution objectives more effectively. When doing so, resolution authorities shall take into account the impact on the collective interest of policy holders.
2.   Member States shall ensure that resolution authorities determine the amount by which capital instruments, debt instruments and other eligible liabilities are to be written down or converted for the purposes set out in paragraph 1 on the basis of the valuation carried out in accordance with Article 23.
3.   Member States shall ensure that resolution authorities may apply the write-down or conversion tool to all liabilities of entities referred to in Article 1(1), points (a) to (e), maintaining their current legal form or considering a change of their legal form where necessary.
4.   Member States shall ensure that the write-down or conversion tool may be applied to all capital instruments and all liabilities of an entity referred to in Article 1(1), points (a) to (e), that are not excluded from the scope of that tool pursuant to paragraphs 5 to 8 of this Article.
5.   Resolution authorities shall not apply the write-down or conversion tool in relation to the following liabilities whether they are governed by the law of a Member State or of a third country:
(a)
secured liabilities;
(b)
liabilities to credit institutions, investment firms and insurance or reinsurance undertakings, except for entities that are part of the same group, with an original maturity of less than seven days;
(c)
liabilities with a remaining maturity of less than seven days, owed to either systems or operators of systems designated in accordance with Directive 98/26/EC or to their participants and arising from the participation in such a system, or to CCPs authorised in the Union pursuant to Article 14 of Regulation (EU) No 648/2012 and third-country CCPs recognised by the European Supervisory Authority (European Securities and Markets Authority) (ESMA), established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council 
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, pursuant to Article 25 of Regulation (EU) No 648/2012;
(d)
a liability to any one of the following:
(i)
an employee, in relation to accrued salary, pension benefits or other fixed remuneration, except for the variable component of remuneration that is not regulated by a collective bargaining agreement;
(ii)
a commercial or trade creditor arising from the provision to an entity referred to in Article 1(1), points (a) to (e), of goods or services, such as IT services, utilities and the rental, servicing and upkeep of premises, that are needed to maintain the continuous functioning of the operations of that entity, or are needed for ensuring the continuity of insurance coverage;
(iii)
tax and social security authorities, provided that those liabilities are preferred under the applicable law;
(iv)
insurance guarantee schemes arising from contributions due in accordance with applicable national laws;
(e)
liabilities arising from compulsory insurance against civil liability in respect of the use of motor vehicles in accordance with Directive 2009/103/EC.
6.   Member States may provide that resolution authorities are not to apply the write-down or conversion tool in relation to:
(a)
liabilities arising from current and future insurance claims which are covered by assets in accordance with Article 275(1), point (a), of Directive 2009/138/EC;
(b)
liabilities arising under private health insurance contracts or private long-term care insurance contracts provided as an alternative to mandatory health or long-term care cover provided by the statutory social security system; the exclusion shall apply only to the part of the liability concerned that replaces the mandatory component of the statutory social security system.
7.   Paragraph 5, point (a), and paragraph 6, point (a), shall not prevent resolution authorities, where appropriate, from applying the write-down or conversion tool to any part of a secured liability or a liability for which collateral has been pledged that exceeds the value of the assets, pledge, lien or collateral against which it is secured or to any part of liabilities referred to in paragraph 6, point (a), that exceed the value of the assets entered into the special register referred to in Article 276(1) of Directive 2009/138/EC.
8.   In exceptional circumstances, where the write-down or conversion tool is applied, resolution authorities may exclude or partially exclude certain liabilities from the application of the write-down or conversion tool in any of the following situations:
(a)
it is not possible to write down or convert that liability within a reasonable time, notwithstanding the good faith efforts of the resolution authority;
(b)
the exclusion is strictly necessary and is proportionate to achieve the continuity of critical functions and core business lines in a manner that maintains the ability of the undertaking under resolution to continue key operations, services and transactions;
(c)
the exclusion is strictly necessary and proportionate to avoid giving rise to widespread contagion, in a manner that could cause a serious disturbance to the economy of a Member State or of the Union;
(d)
the application of the write-down or conversion tool to those liabilities would cause a destruction in value such that the losses borne by other creditors would be higher than if those liabilities were excluded from the application of the write-down or conversion tool; or
(e)
the exclusion is strictly necessary and proportionate to ensure that third parties are compensated for their personal injuries and damage covered by insurance contracts related to third-party liabilities where such contracts are compulsory under applicable law.
9.   Resolution authorities shall take into account that, where the write-down or conversion tool is applied, insurance contracts the terms of which were restructured pursuant to paragraph 1, second subparagraph, meet, after the contract is restructured, the compulsory minimum coverage levels under applicable law.
Article 36
Treatment of shareholders when applying the write-down or conversion tool
1.   Member States shall ensure that, when applying the write-down or conversion tool, resolution authorities take, in respect of shareholders, one or both of the following actions:
(a)
cancel existing shares or other instruments of ownership, or transfer them to creditors whose claims have been converted;
(b)
provided that the valuation carried out under Article 23 shows that the undertaking under resolution has a positive net value, dilute existing holdings of shares or other instruments of ownership by converting relevant capital instruments or debt instruments issued by the undertaking under resolution, or other eligible liabilities of the undertaking under resolution, into shares or other instruments of ownership pursuant to the application of the write-down or conversion tool.
With regard to point (b) of the first subparagraph, the conversion shall be conducted at a rate of conversion that severely dilutes existing holdings of shares or other instruments of ownership.
2.   When considering which of the actions referred to in paragraph 1 to take, resolution authorities shall have regard to:
(a)
the valuation carried out in accordance with Article 23;
(b)
the amount by which the resolution authority has assessed that Tier 1 items are to be reduced and relevant capital instruments written down or converted pursuant to Article 38(1).
3.   By way of derogation from Articles 57 to 62 of Directive 2009/138/EC, where the conversion of capital instruments, debt instruments issued by the undertaking under resolution, or other eligible liabilities of the undertaking under resolution, would result in the acquisition of or increase in a qualifying holding in an insurance or reinsurance undertaking as referred to in Article 57(1) of that Directive, supervisory authorities shall carry out the assessment required under those Articles in a timely manner that does not delay the conversion of capital instruments or prevent resolution action from achieving the relevant resolution objectives.
4.   Where the supervisory authority of that undertaking has not completed the assessment required under paragraph 3 on the date of the conversion of the capital instruments, Article 31(6) shall apply to any acquisition of or increase in a qualifying holding by an acquirer resulting from the conversion of capital instruments.
Article 37
Rate of conversion of debt to equity
Member States shall ensure that, when resolution authorities apply the write-down or conversion tool and exercise the power specified in Article 42(1), point (h), they may apply a different conversion rate to different classes of capital instruments and liabilities in accordance with one or both of the following principles:
(a)
the conversion rate represents appropriate compensation to the affected creditor for any loss incurred by virtue of the exercise of the write-down or conversion powers;
(b)
the conversion rate applicable to liabilities that are considered to be senior under applicable insolvency law is higher than the conversion rate applicable to subordinated liabilities.
Article 38
Additional provisions governing the write-down or conversion tool
1.   Resolution authorities shall apply the write-down or conversion tool in accordance with the priority of claims applicable under normal insolvency proceedings, in a way that produces the following results:
(a)
Tier 1 items are reduced first in proportion to the losses and to the extent of their capacity and the resolution authority takes one or both of the actions specified in Article 36(1) in respect of holders of Tier 1 instruments;
(b)
the principal amount of Tier 2 instruments is written down or converted into Tier 1 instruments or both, to the extent required to achieve the resolution objectives or to the extent of the capacity of the relevant capital instruments, whichever is lower;
(c)
the principal amount of Tier 3 instruments is written down or converted into Tier 1 instruments or both, to the extent required to achieve the resolution objectives or to the extent of the capacity of the relevant capital instruments, whichever is lower;
(d)
the principal amount of, or outstanding amount payable in respect of, the rest of eligible liabilities in accordance with the hierarchy of claims in normal insolvency proceedings, including the ranking of insurance claims provided for in Article 275(1) of Directive 2009/138/EC, is written down or converted into Tier 1 instruments or both, to the extent required to achieve the resolution objectives.
Where the level of write-down based on the provisional valuation as referred to in Article 25 is found to exceed requirements when assessed against the definitive valuation as referred to in Article 24(2), a write-up mechanism may be applied to reimburse creditors and, subsequently, shareholders to the extent necessary.
When deciding on whether liabilities are to be written down or converted into equity, resolution authorities shall not convert one class of liabilities, while a class of liabilities that is subordinated to the class remains unconverted into equity or not written down.
Member States shall ensure that all claims resulting from own-fund items have, in national laws governing normal insolvency proceedings, a lower priority ranking than any claim that does not result from an own-fund item. For the purposes of this subparagraph, to the extent that an instrument is only partly recognised as an own-fund item, the whole instrument shall be treated as a claim resulting from an own-fund items and shall rank lower than any claim that does not result from an own-fund item.
2.   Where the principal amount of a relevant capital instrument or the principal amount of a debt instrument or other eligible liability is written down, the following shall apply:
(a)
the reduction resulting from the application of the write-down or conversion tool shall be permanent, subject to any write-up in accordance with the reimbursement mechanism referred to in paragraph 1;
(b)
no liability to the holder of the relevant capital instrument, the debt instrument or other eligible liability shall remain under or in connection with that amount of the instrument, which has been written down, except for any liability already accrued, and any liability for damages that may arise as a result of an appeal challenging the legality of the exercise of the write-down power;
(c)
no compensation shall be paid to any holder of the relevant capital instrument, the debt instrument or other eligible liability other than in accordance with paragraph 3.
3.   In order to effect a conversion of the capital instruments, debt instruments or other eligible liabilities concerned in accordance with paragraph 1, points (b) and (c), resolution authorities may require entities referred to in Article 1(1), points (a) to (e), to issue Tier 1 instruments to the holders of the capital instruments, debt instruments or other eligible liabilities concerned.
The capital instruments, debt instruments or other eligible liabilities concerned may be converted provided that all of the following conditions are met:
(a)
the Tier 1 instruments are issued by the insurance or reinsurance undertaking, by the entity referred to Article 1(1), points (b) to (e), or by the parent undertaking with the agreement of the relevant resolution authority;
(b)
the Tier 1 instruments are issued prior to any issuance of shares or other instruments of ownership by that entity referred to in Article 1(1), points (a) to (e), for the purposes of the provision of own funds by the State or a government entity;
(c)
the Tier 1 instruments are awarded and transferred without delay following the exercise of the conversion power;
(d)
the conversion rate that determines the number of Tier 1 instruments that are provided in respect of each relevant capital instrument, debt instrument or other eligible liability complies with Article 37.
4.   For the purposes of the provision of Tier 1 instruments in accordance with paragraph 3, the resolution authority may require entities referred to in Article 1(1), points (a) to (e), to maintain at all times the necessary prior authorisation to issue the relevant number of Tier 1 instruments.
Article 39
Effect of write-down or conversion
1.   Member States shall ensure that, where a resolution authority applies the write-down or conversion tool and exercises the write-down or conversion powers in accordance with Article 35(1) and Article 42(1), points (g) to (k), the reduction of principal or outstanding amount due, conversion or cancellation takes effect and is immediately binding on the undertaking under resolution and affected creditors and shareholders.
2.   The resolution authority shall complete or require the completion of all the administrative and procedural tasks necessary to give effect to the application of the write-down or conversion tool, including:
(a)
the amendment of all registers concerned;
(b)
the delisting, or removal from trading of shares or other instruments of ownership or debt instruments;
(c)
the listing, or admission to trading of new shares or other instruments of ownership;
(d)
the relisting or readmission of any debt instruments which have been written down, without having to issue a prospectus as required by Regulation (EU) 2017/1129 of the European Parliament and of the Council 
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.
3.   Where a resolution authority reduces to zero the principal amount of, or outstanding amount payable in respect of, a liability by means of the power referred to in Article 42(1), point (g), that liability and any obligations or claims arising in relation to it that are not accrued at the time when the power is exercised shall be treated as discharged for all purposes, and shall not be provable in any subsequent proceedings in relation to the undertaking under resolution or any successor entity in any subsequent winding-up.
4.   Where a resolution authority reduces in part, but not in full, the principal amount of, or outstanding amount payable in respect of, a liability by means of the power referred to in Article 42(1), point (g):
(a)
the liability shall be discharged to the extent of the amount reduced;
(b)
the instrument concerned or the agreement that created the original liability shall continue to apply in relation to the residual principal amount of, or outstanding amount payable in respect of the liability, subject to any modification of the amount of interest payable to reflect the reduction of the principal amount, and any further modification of the terms that the resolution authority might make by means of the power referred to in Article 42(1), point (l).
Article 40
Write-down or conversion of liabilities arising from derivatives
1.   Member States shall ensure that resolution authorities exercise the write-down or conversion powers in relation to a liability arising from a derivative only upon or after closing out the derivatives. Upon entry into resolution, resolution authorities shall be empowered to terminate and close out any derivative contract for that purpose. Where a derivative liability has been excluded from the application of the write-down or conversion tool under Article 35(8), resolution authorities shall not be obliged to terminate or close out the derivative contract.
2.   Where derivative transactions are subject to a netting agreement, the resolution authority or an independent valuer shall determine, as part of the valuation under Article 23, the liability arising from those transactions on a net basis in accordance with the terms of the netting agreement.
3.   Resolution authorities shall determine the value of liabilities arising from derivatives in accordance with all of the following:
(a)
appropriate methodologies for determining the value of classes of derivatives, including transactions that are subject to netting agreements;
(b)
principles for establishing the relevant point in time at which the value of a derivative position should be established;
(c)
appropriate methodologies for comparing the destruction in value that would arise from the closeout and write-down or conversion of derivatives with the amount of losses that would be borne by derivatives in a write-down or conversion.
4.   EIOPA, after consulting ESMA, shall develop draft regulatory technical standards specifying the methodologies and principles laid down in paragraph 3 on the valuation of liabilities arising from derivatives. In relation to derivative transactions that are subject to a netting agreement, EIOPA shall take into account the methodology for closeout set out in the netting agreement.
EIOPA shall submit those draft regulatory technical standards to the Commission by 29 July 2027.
Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.
Article 41
Removal of procedural obstacles for write-down or conversion
1.   Where the write-down or conversion tool is applied, Member States shall, where applicable, require the entities referred to in Article 1(1), points (a) to (e), to maintain at all times a sufficient amount of authorised share capital or of other Tier 1 instruments to ensure that those undertakings and entities are not prevented from issuing sufficient new shares or other instruments of ownership to ensure that the conversion of liabilities into shares or other instruments of ownership can be carried out effectively.
Resolution authorities shall assess compliance with the requirement laid down in the first subparagraph in the context of the development and maintenance of the resolution plans in accordance with Articles 9 and 10.
2.   Member States shall ensure that there are no procedural impediments to the conversion of liabilities to shares or other instruments of ownership that exist by virtue of their instruments of incorporation or statutes, including pre-emption rights for shareholders or requirements for the consent of shareholders to an increase in capital.
CHAPTER IV
Resolution powers
Article 42
General powers
1.   Member States shall ensure that resolution authorities have all the powers necessary to apply resolution tools to the entities referred to in Article 1(1), points (a) to (e), that meet the conditions for resolution laid down in Article 19(1) or 20(3), as applicable. In particular, resolution authorities shall have the following resolution powers, which they may exercise individually or in any combination:
(a)
the power to require any person to provide any information required for the resolution authority to decide upon and prepare a resolution action, including updates and supplements of information provided in the resolution plans and including information to be provided through on-site inspections;
(b)
the power to take control of an undertaking under resolution and exercise all the rights and powers conferred upon the shareholders, other owners and the administrative, management or supervisory body of the undertaking under resolution;
(c)
the power to prohibit to underwrite new insurance or reinsurance business and to place an undertaking under resolution into an orderly solvent run-off procedure and terminate its activities;
(d)
the power to authorise a bridge undertaking established and authorised without complying with Directive 2009/138/EC during the short period referred to in Article 33(1), second subparagraph, of this Directive to underwrite new insurance or reinsurance business, or renew existing business;
(e)
the power to transfer shares or other instruments of ownership issued by an undertaking under resolution;
(f)
the power to transfer to another entity, with the consent of that entity, rights, assets or liabilities of an undertaking under resolution;
(g)
the power to restructure insurance claims or reduce, including to reduce to zero, the principal amount of or outstanding amount due in respect of debt instruments and eligible liabilities, including insurance claims, of an undertaking under resolution;
(h)
the power to convert debt instruments and eligible liabilities, including insurance claims, of an undertaking under resolution into ordinary shares or other instruments of ownership of an entity referred to in Article 1(1), points (a) to (e), of a relevant parent undertaking or of a bridge undertaking to which assets, rights or liabilities of the entity referred to in Article 1(1), points (a) to (e), are transferred;
(i)
the power to cancel debt instruments issued by an undertaking under resolution, except for secured liabilities subject to Article 35(5);
(j)
the power to reduce, including to reduce to zero, the nominal amount of shares or other instruments of ownership of an undertaking under resolution and to cancel such shares or other instruments of ownership;
(k)
the power to require an undertaking under resolution or a relevant parent undertaking to issue new shares or other instruments of ownership or other capital instruments, including preference shares and contingent convertible instruments;
(l)
the power to amend or alter the maturity of debt instruments and other eligible liabilities issued by an undertaking under resolution or amend the amount of interest payable under such instruments and other eligible liabilities, or the date on which the interest becomes payable, including by suspending payment for a temporary period;
(m)
the power to close out and terminate financial contracts or derivatives;
(n)
the power to remove or replace the administrative, management or supervisory body and senior management of an undertaking under resolution;
(o)
the power to require the supervisory authority to assess the buyer of a qualifying holding in a timely manner by way of derogation from the time-limits laid down in Article 58 of Directive 2009/138/EC.
2.   Member States shall ensure that the measures taken by the supervisory authority are terminated, if their continuation would hinder the use of resolution tools.
3.   Member States shall take all measures necessary to ensure that, when applying resolution tools and exercising resolution powers, resolution authorities are not subject to any of the following requirements that would otherwise apply by virtue of national law or contract or otherwise:
(a)
subject to Article 3(8) and Article 67(1), requirements to obtain approval or consent from any person either public or private, including the shareholders, the creditors or the policy holders of the undertaking under resolution;
(b)
prior to the exercise of the power, procedural requirements to notify any person, including any requirement to publish any notice or prospectus or to file or register any document with any other authority.
Point (b) of the first subparagraph is without prejudice to the requirements laid down in Articles 63 and 65 and any notification requirements under the Union State aid framework.
4.   Member States shall ensure that, to the extent that any of the powers listed in paragraph 1 of this Article is not applicable to an entity within the scope of Article 1(1) as a result of its specific legal form of mutual undertaking or cooperative society, resolution authorities have powers which are as similar as possible to those listed in paragraph 1 of this Article, including in terms of their effects.
5.   Member States shall ensure that, when resolution authorities exercise the powers laid down in paragraph 4, the safeguards provided for in Chapter V of this Directive, or safeguards that deliver the same effect, are applied to the persons affected, including shareholders, creditors, policy holders and counterparties.
Article 43
Ancillary powers
1.   Member States shall ensure that resolution authorities, when exercising a resolution power, have the power to do all of the following:
(a)
subject to Article 60, provide for a transfer to take effect, free from any liability or encumbrance affecting the financial instruments, rights, assets or liabilities transferred;
(b)
remove rights to acquire any additional shares or other instruments of ownership;
(c)
require the authority concerned to discontinue or suspend the admission to trading on a regulated market or the official listing of financial instruments pursuant to Directive 2001/34/EC of the European Parliament and of the Council 
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;
(d)
provide for the recipient to be treated as if that recipient were the undertaking under resolution for the purposes of any rights or obligations of, or actions taken by, the undertaking under resolution, including, subject to the application of the sale-of-business tool and the bridge undertaking tool referred to in Articles 31 and 32, any rights or obligations relating to participation in a market infrastructure;
(e)
require the undertaking under resolution or the recipient to provide each other with information and assistance;
(f)
cancel or modify the terms of a contract to which the undertaking under resolution is a party, or substitute a recipient as a party;
(g)
transfer any reinsurance rights covering transferred insurance or reinsurance claims without the consent of the reinsurance undertaking where the resolution authority transfers assets and liabilities related to those reinsurance rights of the undertaking under resolution in whole or in part to another entity.
For the purposes of the first subparagraph, point (a), any right of compensation provided in accordance with this Directive shall not be considered to be a liability or an encumbrance.
2.   Resolution authorities shall exercise the powers specified in paragraph 1 where they consider such exercise to be appropriate to ensure that a resolution action is effective or to achieve one or more resolution objectives.
3.   Member States shall ensure that resolution authorities exercising a resolution power have the power to provide for continuity arrangements necessary to ensure that the resolution action is effective and, where relevant, to ensure that the business transferred may be operated by the recipient. Such continuity arrangements shall include, in particular:
(a)
the continuity of contracts entered into by the undertaking under resolution, so that the recipient assumes the rights and liabilities of the undertaking under resolution relating to any financial instrument, right, asset or liability that has been transferred and is substituted for the undertaking under resolution, expressly or implicitly in all relevant contractual documents;
(b)
the substitution of the recipient for the undertaking under resolution in any legal proceedings relating to any financial instrument, right, asset or liability that has been transferred.
4.   The powers referred to in paragraph 1, first subparagraph, point (d), and paragraph 3, point (b), shall not affect the following:
(a)
the right of an employee of the undertaking under resolution to terminate a contract of employment;
(b)
subject to Articles 49, 50 and 51, any right of a party to a contract to exercise rights under the contract, including the right to terminate, where entitled to do so in accordance with the terms of the contract by virtue of an act or omission by the undertaking under resolution prior to the relevant transfer, or by the recipient after the completion of the transfer concerned.
Article 44
Special management
1.   Member States shall ensure that resolution authorities may appoint a special manager to replace the administrative, management or supervisory body of the undertaking under resolution. Member States shall further ensure that the special manager has the qualifications, ability and knowledge to carry out his or her functions. Member States may provide that a resolution authority may appoint several special managers.
2.   The special manager shall have all the powers of the shareholders and of the administrative, management or supervisory body of the undertaking under resolution. The special manager shall exercise those powers under the control of the resolution authority. The resolution authority may limit the actions of the special manager or require prior consent for certain acts.
The resolution authority shall make public the appointment referred to in paragraph 1 and the terms and conditions attached to that appointment.
3.   The special manager shall have the statutory duty to take all the measures necessary to promote the resolution objectives and implement resolution actions taken by the resolution authority. In the event of inconsistency or conflict with any other duty of management laid down in the statutes of the undertaking or in national law, that statutory duty shall override such other duty.
4.   Member States shall require that the special manager draw up reports for the resolution authority that appointed him or her, at regular intervals set by the resolution authority and at the beginning and the end of his or her mandate. Those reports shall describe in detail the financial position of the undertaking under resolution and state the reasons for the measures taken.
5.   The special manager shall not be appointed for more than one year. That period may be renewed, if the resolution authority determines that the conditions for appointment of a special manager continue to be met.
6.   The resolution authority may remove the special manager at any time.
Article 45
Powers concerning the provision of operational services and facilities
1.   Member States shall ensure that resolution authorities have the power to require an undertaking under resolution, or any of its group entities, to provide any operational services or facilities that are necessary to enable a recipient to operate the business transferred to it effectively, including where the undertaking under resolution or relevant group entity has entered into normal insolvency proceedings.
2.   Member States shall ensure that resolution authorities have the powers necessary to ensure that the goods and services provided, directly or indirectly, by an essential service provider to an undertaking under resolution can continue to be provided by it after resolution action has been taken where:
(a)
the assets of the essential service provider are or there are objective elements to support a determination that the assets of the essential service provider will, in the near future, be less than its liabilities; or
(b)
the essential service provider is unable to pay its debts or other liabilities as they fall due, or there are objective elements to support a determination that the essential service provider will, in the near future, be in such a situation.
3.   Member States shall ensure that their resolution authorities have powers to enforce obligations imposed, pursuant to paragraph 1, on group entities established in their territory by resolution authorities established in other Member States.
4.   The operational services and facilities provided in accordance with paragraphs 1 and 3 shall be on the following terms:
(a)
where the operational services and facilities were provided to the undertaking under resolution under an agreement before resolution action was taken and for the duration of that agreement, on the same terms;
(b)
where there is no agreement or where the agreement has expired, on reasonable terms.
Article 46
Power to enforce crisis management measures by other Member States
1.   Member States shall ensure that, where a transfer of shares, other instruments of ownership, or assets, rights or liabilities includes assets that are located in a Member State other than the Member State of the resolution authority, or includes rights or liabilities under the law of a Member State other than the Member State of the resolution authority, the transfer has effect in or under the law of that other Member State.
2.   Member States shall provide the resolution authority that has made, or intends to make, the transfer, with all reasonable assistance to ensure that the shares or other instruments of ownership or assets, rights or liabilities are transferred to the recipient in accordance with any applicable requirements of national law.
3.   Member States shall ensure that shareholders, creditors and third parties that are affected by a transfer of shares, other instruments of ownership, assets, rights or liabilities as referred to in paragraph 1, are not entitled to prevent, challenge, or set aside the transfer under any provision of law of the Member State where the assets are located or of the law governing the shares, other instruments of ownership, rights or liabilities.
4.   Member States shall ensure that the principal amount of capital instruments, debt instruments or other eligible liabilities is reduced, or that such liabilities or instruments are converted, in accordance with the exercise of write-down or conversion powers by a resolution authority of another Member State to an undertaking under resolution, where the relevant liabilities or instruments:
(a)
are governed by the law of the Member State other than the Member State of the resolution authority that exercised the write-down or conversion powers;
(b)
are owed to creditors located in the Member State other than the Member State of the resolution authority that exercised the write-down or conversion powers.
5.   Member States shall ensure that shareholders and creditors that are affected by the exercise of write-down or conversion powers referred to in paragraph 4 are not entitled to challenge the reduction of the principal amount of the instrument or liability or its conversion, as the case may be, under any provision of law of the Member State other than the Member State of the resolution authority that exercised the write-down or conversion powers.
6.   Each Member State shall ensure that all of the following is determined in accordance with the law of the Member State of the resolution authority:
(a)
the right for shareholders, creditors and third parties to challenge, by way of appeal as laid down in Article 67, a transfer of shares, other instruments of ownership, assets, rights or liabilities referred to in paragraph 1 of this Article;
(b)
the right for creditors to challenge, by way of appeal as laid down in Article 67, the reduction of the principal amount, or the conversion, of an instrument or liability covered by paragraph 4, point (a) or (b), of this Article;
(c)
the safeguards for partial transfers, as referred to in Chapter V, in relation to the assets, rights or liabilities referred to in paragraph 1.
Article 47
Power in respect of assets, rights, liabilities, shares and other instruments of ownership located in or governed by the law of third countries
1.   Member States shall provide that, in cases in which resolution action involves action taken in respect of assets located in a third country or shares, other instruments of ownership, rights or liabilities governed by the law of a third country, resolution authorities may require that:
(a)
the person exercising control over the undertaking under resolution and the recipient take all steps necessary to ensure that the resolution action becomes effective;
(b)
the person exercising control over the undertaking under resolution hold the shares, other instruments of ownership, assets or rights or discharge the liabilities on behalf of the recipient until the resolution action becomes effective;
(c)
the reasonable expenses of the recipient properly incurred in carrying out any action required under points (a) and (b) are met in any of the ways referred to in Article 26(5).
2.   In order to facilitate potential action pursuant to paragraph 1 of this Article, Member States shall require entities referred to in Article 1(1), points (a) to (e), to include into the related agreements contractual terms by which shareholders, creditors or parties to the agreement creating the liability recognise that the liability may be subject to write-down or conversion powers and agree to be bound by any reduction of the principal or outstanding amount due, conversion or cancellation that is effected by the exercise of those powers by a resolution authority.
Member States shall ensure that resolution authorities may require entities referred to in Article 1(1), points (a) to (e), to provide those resolution authorities with a reasoned legal opinion by an independent legal expert confirming the legal enforceability and effectiveness of such contractual terms.
3.   Where a resolution authority assesses that, in spite of all the necessary steps taken by the person exercising control over the undertaking under resolution in accordance with paragraph 1, point (a), it is highly unlikely that the resolution action will become effective in relation to certain assets located in a third country or certain shares, other instruments of ownership, rights or liabilities governed by the law of a third country, the resolution authority shall not proceed with the resolution action. Where the resolution authority has already ordered the resolution action, that order shall be void in relation to the assets, shares, instruments of ownership, rights or liabilities concerned.
Article 48
Exclusion of certain contractual terms
1.   A crisis prevention measure or a crisis management measure taken in relation to an entity, including the occurrence of any event directly linked to the application of such a measure, shall not, per se, under a contract entered into by the entity concerned, be deemed to be an enforcement event within the meaning of Directive 2002/47/EC or insolvency proceedings within the meaning of Directive 98/26/EC, provided that the substantive obligations under that contract, including payment and delivery obligations and the provision of collateral, continue to be performed.
In addition, a crisis prevention measure or a crisis management measure shall not, per se, be deemed to be an enforcement event within the meaning of Directive 2002/47/EC or insolvency proceedings within the meaning of Directive 98/26/EC under a contract entered into by:
(a)
a subsidiary undertaking, where the parent undertaking or any group entity guarantees or otherwise supports the obligations under that contract; or
(b)
any entity of a group, where the contract contains cross-default provisions.
2.   Where third-country resolution proceedings are recognised pursuant to Article 76, or, in the absence of such recognition, where a resolution authority so decides, third-country resolution proceedings shall for the purposes of this Article constitute a crisis management measure.
3.   Provided that the substantive obligations under the contract, including payment and delivery obligations, and provision of collateral, continue to be performed, a crisis prevention measure, or a crisis management measure, including any event directly linked to the application of such a measure, shall not, per se, make it possible for anyone to:
(a)
exercise any termination, suspension, modification, netting or set-off rights, including in relation to a contract entered into by:
(i)
a subsidiary undertaking, where the obligations under the contract are guaranteed or otherwise supported by a group entity;
(ii)
any group entity, where the contract contains cross-default provisions;
(b)
obtain possession, exercise control or enforce any security over any property of any of the entities referred to in Article 1(1), points (a) to (e), concerned or any group entity in relation to a contract which contains cross-default provisions;
(c)
affect any contractual rights of any of the entities referred to in Article 1(1), points (a) to (e), concerned or any group entity in relation to a contract which contains cross-default provisions.
4.   Paragraphs 1, 2 and 3 shall not affect the right of a person to take an action as referred to in paragraph 3, point (a), (b) or (c), where that right arises by virtue of an event other than the crisis prevention measure, the crisis management measure, or by virtue of any event directly linked to the application of such a measure.
5.   A suspension or restriction under Article 49 or 50 shall not constitute non-performance of a contractual obligation for the purposes of paragraphs 1 and 3 of this Article and of Article 51(1).
6.   The provisions contained in this Article shall be considered to be overriding mandatory provisions within the meaning of Article 9 of Regulation (EC) No 593/2008 of the European Parliament and of the Council 
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.
Article 49
Power to suspend certain obligations
1.   Member States shall ensure that resolution authorities have the power to suspend any payment or delivery obligations pursuant to any contract to which an undertaking under resolution is a party from the publication of a notice of the suspension in accordance with Article 65(3) until midnight in the Member State of the resolution authority of the undertaking under resolution at the end of the business day following that publication.
2.   A payment or delivery obligation that would have been due during the suspension period referred to in paragraph 1 shall be due immediately upon expiry of the suspension period.
3.   Where an undertaking under resolution’s payment or delivery obligations under a contract are suspended in accordance with paragraph 1, the payment or delivery obligations of the undertaking under resolution’s counterparties under that contract shall be suspended for the same period.
4.   Any suspension under paragraph 1 shall not apply to payment and delivery obligations owed to the following:
(a)
systems and operators of systems designated in accordance with Directive 98/26/EC;
(b)
CCPs authorised in the Union pursuant to Article 14 of Regulation (EU) No 648/2012 and third-country CCPs recognised by ESMA pursuant to Article 25 of that Regulation.
5.   When exercising a power under this Article, resolution authorities shall have regard to the impact the exercise of that power might have.
The resolution authorities shall set the scope of that power having regard to the circumstances of each case.
Article 50
Power to restrict the enforcement of security interests
1.   Member States shall ensure that resolution authorities have the power to restrict secured creditors of an undertaking under resolution from enforcing security interests in relation to any assets of that undertaking from the publication of a notice of the restriction in accordance with Article 65(3) until midnight in the Member State of the resolution authority of the undertaking under resolution at the end of the business day following that publication.
2.   Any restriction under paragraph 1 shall not apply to:
(a)
security interest of systems or operators of systems designated for the purposes of Directive 98/26/EC;
(b)
CCPs authorised in the Union pursuant to Article 14 of Regulation (EU) No 648/2012 and third-country CCPs recognised by ESMA pursuant to Article 25 of that Regulation.
3.   Where Article 62 applies, resolution authorities shall ensure that any restrictions imposed pursuant to the power referred to in paragraph 1 of this Article are consistent for all group entities in relation to which a resolution action is taken.
Article 51
Power to temporarily suspend termination rights
1.   Member States shall ensure that resolution authorities have the power to suspend the termination rights of any party to a contract with an undertaking under resolution from the publication of the notice in accordance with Article 65(3) until midnight in the Member State of the resolution authority of the undertaking under resolution at the end of the business day following that publication, provided that the payment and delivery obligations and the provision of collateral continue to be performed.
2.   Member States shall ensure that resolution authorities have the power to suspend the termination rights of any party to a contract with a subsidiary undertaking of an undertaking under resolution where any of the following applies:
(a)
the obligations under that contract are guaranteed or are otherwise supported by the undertaking under resolution;
(b)
the termination rights under that contract are based solely on the insolvency or financial condition of the undertaking under resolution;
(c)
in the case of a transfer power that has been or may be exercised in relation to the undertaking under resolution, either:
(i)
all the assets and liabilities of the subsidiary undertaking relating to that contract have been or may be transferred to and assumed by the recipient; or
(ii)
the resolution authority provides in any other way adequate protection for such obligations.
The suspension of the termination rights shall take effect from the publication of the notice in accordance with Article 65(3) until midnight in the Member State where the subsidiary undertaking of the undertaking under resolution is established on the business day following that publication.
3.   Any suspension under paragraph 1 or 2 shall not apply to:
(a)
systems or operators of systems designated for the purposes of Directive 98/26/EC; or
(b)
CCPs authorised in the Union pursuant to Article 14 of Regulation (EU) No 648/2012 and third-country CCPs recognised by ESMA pursuant to Article 25 of that Regulation.
4.   A person may exercise a termination right under a contract before the end of the period referred to in paragraph 1 or 2 where that person receives notice from the resolution authority that the rights and liabilities covered by the contract shall not be:
(a)
transferred to another entity; or
(b)
subject to write-down or conversion in accordance with Article 35(1), point (a).
5.   Where a resolution authority exercises the power specified in paragraph 1 or 2 of this Article to suspend termination rights, and where no notice has been given pursuant to paragraph 4 of this Article, those termination rights may be exercised on the expiry of the period of suspension, subject to Article 48, as follows:
(a)
where the rights and liabilities covered by the contract have been transferred to another entity, a counterparty may exercise those termination rights in accordance with the terms of that contract only on the occurrence of any continuing or subsequent enforcement event by the recipient;
(b)
where the rights and liabilities covered by the contract remain with the undertaking under resolution and the resolution authority has not applied the write-down or conversion tool to that contract for the purpose laid down in Article 35(1), point (a), a counterparty may exercise termination rights in accordance with the terms of that contract on the expiry of a suspension referred to in paragraph 1 of this Article.
Article 52
Contractual recognition of resolution stay powers
1.   Member States shall require entities referred to in Article 1(1), points (a) to (e), to include in any financial contract which they enter into and which is governed by third-country law, terms by which the parties recognise that the financial contract may be subject to the exercise of powers by the resolution authority to suspend or restrict rights and obligations under Articles 49, 50, and 51, and recognise that they are bound by the requirements of Article 48.
2.   Member States may also require that ultimate parent undertakings ensure that their third-country subsidiary undertakings which are entities referred to in Article 1(1), points (a) to (e), include, in the financial contracts referred to in paragraph 1, terms to exclude that the exercise of the power of the resolution authority to suspend or restrict rights and obligations of the ultimate parent undertaking, in accordance with paragraph 1, constitutes a valid ground for early termination, suspension, modification, netting, exercise of set-off rights or enforcement of security interests on those contracts.
3.   Paragraph 1 shall apply to any financial contract which:
(a)
creates a new obligation, or materially amends an existing obligation after the entry into force of the provisions adopted at national level to transpose this Article;
(b)
provides for the exercise of one or more termination rights or rights to enforce security interests to which Article 48, 49, 50 or 51 would apply if the financial contract were governed by the laws of a Member State.
4.   The fact that an entity as referred to in Article 1(1), points (a) to (e), does not include in its financial contracts the contractual terms referred to in paragraph 1 of this Article shall not prevent the resolution authority from applying the powers referred to in Articles 48, 49, 50 and 51 in relation to those financial contracts.
5.   EIOPA shall develop draft regulatory technical standards to specify the contents of the contractual terms referred to in paragraph 1, taking into account the different business models of the entities referred to therein.
EIOPA shall submit those draft regulatory technical standards to the Commission by 29 July 2027.
Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.
Article 53
Power to temporarily suspend redemption rights
1.   Member States shall ensure that resolution authorities have the power to temporarily restrict or suspend redemption rights of policy holders in relation to life insurance contracts written by the undertaking under resolution, provided that the substantive obligations under the contracts, and in particular payment obligations for the benefit of policy holders, beneficiaries or injured parties, continue to be performed.
2.   The power referred to in paragraph 1 shall be used only for as long as is necessary to facilitate the application of one or more resolution tools. That power shall be valid for the period specified in the notice of suspension published in accordance with Article 65(3).
Article 54
Exercise of the resolution powers
1.   Member States shall ensure that resolution authorities are able to exercise control over the undertaking under resolution, so as to:
(a)
operate and conduct the activities and services of the undertaking under resolution with all the powers of its shareholders and administrative, management or supervisory body;
(b)
manage and dispose of the assets and property of the undertaking under resolution.
The control referred to in the first subparagraph may be exercised directly by the resolution authority or indirectly by a person or persons appointed by the resolution authority. Member States shall ensure that voting rights conferred by shares or other instruments of ownership of the undertaking under resolution cannot be exercised during the period of resolution.
2.   Member States shall ensure that resolution authorities, subject to the right of appeal referred to in Article 67, are able to take a resolution action through executive order in accordance with national administrative competences and procedures, without exercising control over the undertaking under resolution.
3.   Resolution authorities shall decide in each particular case whether it is appropriate to carry out the resolution action through the means specified in paragraph 1 or in paragraph 2, having regard to the resolution objectives and the general principles governing resolution laid down in Article 22, the specific circumstances of the undertaking under resolution in question and the need to facilitate the effective resolution of cross-border groups.
4.   Resolution authorities shall not be deemed to be shadow directors or de facto directors under national law.
CHAPTER V
Safeguards
Article 55
Treatment of shareholders, policy holders, beneficiaries, claimants and other creditors in the case of partial transfers and application of the write-down or conversion tool
1.   Member States shall ensure that, where one or more resolution tools have been applied, except in a situation described in paragraph 2 of this Article, and where resolution authorities transfer only parts of the rights, assets and liabilities of the undertaking under resolution, the shareholders, policy holders, beneficiaries, claimants and other creditors whose claims have not been transferred receive in satisfaction of their claims at least as much as what they would have received if the undertaking under resolution had been wound up under normal insolvency proceedings at the time when the decision referred to in Article 64 was taken.
2.   Member States shall ensure that, where one or more resolution tools have been applied and where resolution authorities apply the write-down or conversion tool, the shareholders, policy holders, beneficiaries, claimants and other creditors whose claims have been written down or converted to equity do not incur greater losses than they would have incurred if the undertaking under resolution had been wound up under normal insolvency proceedings immediately at the time when the decision referred to in Article 64 was taken.
Article 56
Valuation of difference in treatment
1.   For the purpose of assessing whether shareholders, policy holders, beneficiaries, claimants and other creditors would have received better treatment if the undertaking under resolution had entered into normal insolvency proceedings, Member States shall ensure that an independent person carries out a valuation as soon as possible after the resolution action or actions have been effected. That valuation shall be distinct from the valuation carried out under Article 23.
2.   The valuation referred to in paragraph 1 shall determine:
(a)
the treatment that shareholders, policy holders, beneficiaries, claimants, other creditors or the relevant insurance guarantee schemes would have received if the undertaking under resolution with respect to which the resolution action or actions have been effected had entered normal insolvency proceedings at the time when the decision referred to in Article 64 was taken;
(b)
the actual treatment that shareholders, policy holders, beneficiaries, claimants and other creditors have received in the resolution of the undertaking under resolution;
(c)
whether there is any difference between the treatment referred to in point (a) and the treatment referred to in point (b).
3.   The valuation shall:
(a)
assume that the undertaking under resolution with respect to which the resolution action or actions have been effected would have entered normal insolvency proceedings at the time when the decision referred to in Article 64 was taken;
(b)
assume that the resolution action or actions had not been effected;
(c)
take into account a commercially reasonable estimate of the replacement costs, including brokerage and closing fees, of already purchased policies for appropriate cohorts of policy holders at the time when the decision referred to in Article 64 was taken;
(d)
disregard any provision of extraordinary public financial support to the undertaking under resolution.
4.   EIOPA shall develop draft regulatory technical standards to specify the methodology for carrying out the valuation referred to in this Article, in particular the methodology for assessing the treatment that shareholders, policy holders, beneficiaries, claimants and other creditors would have received if the undertaking under resolution had entered insolvency proceedings at the time when the decision referred to in Article 64 was taken and the methodology for the estimation of the replacement costs.
EIOPA shall submit those draft regulatory technical standards to the Commission by 29 July 2027.
Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.
Article 57
Safeguard for shareholders, policy holders, beneficiaries, claimants or other creditors
Member States shall ensure that, where the valuation carried out under Article 56 determines that any shareholder, policy holder, beneficiary, claimant or other creditor referred to in Article 55 or, where relevant, the insurance guarantee scheme in accordance with the applicable national law, has incurred greater losses than it would have incurred in a winding-up under normal insolvency proceedings, it is entitled to payment of the difference.
Article 58
Safeguard for counterparties in partial transfers
1.   Member States shall ensure appropriate protection of the following arrangements and of the counterparties to the following arrangements:
(a)
security arrangements, under which a person has by way of security an actual or contingent interest in the assets or rights that are subject to transfer, irrespective of whether that interest is secured by specific assets or rights or by way of a floating charge or similar arrangement;
(b)
title transfer financial collateral arrangements, under which collateral to secure or cover the performance of specified obligations is provided by a transfer of full ownership of assets from the collateral provider to the collateral taker, on terms providing for the collateral taker to transfer assets where those specified obligations are performed;
(c)
set-off arrangements, under which two or more claims or obligations owed between the undertaking under resolution and a counterparty can be set off against each other;
(d)
netting arrangements;
(e)
unit-linked policies or other ring-fenced portfolios;
(f)
reinsurance agreements;
(g)
structured finance arrangements, including securitisations and instruments used for hedging purposes which form an integral part of the cover pool and which according to national law are secured, and involve the granting and holding of security by a party to the arrangement or a trustee, agent or nominee.
The form of protection that is appropriate, for the classes of arrangements specified in the first subparagraph, points (a) to (g), shall be chosen in accordance with Articles 59 to 62.
2.   Member States shall ensure that the protections specified in paragraph 1 apply in the following circumstances:
(a)
a resolution authority transfers some but not all of the assets, rights or liabilities of an undertaking under resolution to another entity or, in the application of a resolution tool, from a bridge undertaking or asset and liability management vehicle to another person;
(b)
a resolution authority exercises the powers specified in Article 43(1), point (f).
3.   The requirement under paragraph 1 shall apply irrespective of the number of parties involved in the arrangements and of whether the arrangements:
(a)
are created by contract, trusts or other means, or arise automatically by operation of law;
(b)
arise under or are governed in whole or in part by the law of another Member State or of a third country.
Article 59
Protection for title transfer financial collateral arrangements, set-off arrangements, netting arrangements and reinsurance agreements
1.   Member States shall ensure that there is appropriate protection for title transfer financial collateral arrangements, set-off and netting arrangements, and reinsurance agreements so as to prevent the transfer of some, but not all, of the rights and liabilities that are protected under a title transfer financial collateral arrangement, a set-off arrangement, a netting arrangement or a reinsurance agreement between the undertaking under resolution and another person and the modification or termination of rights and liabilities that are protected under such a title transfer financial collateral arrangement, a set-off arrangement, a netting arrangement or a reinsurance agreement through the use of ancillary powers.
For the purposes of the first subparagraph, rights and liabilities are to be treated as protected under a title transfer financial collateral arrangement, a set-off arrangement, a netting arrangement or a reinsurance agreement where the parties to the arrangement or agreement are entitled to set-off or net those rights and liabilities.
2.   Notwithstanding paragraph 1, where necessary to better protect policy holders by ensuring that insurance policies that are transferred continue to meet the relevant legal requirements with respect to compulsory minimum levels of coverage under applicable national law, resolution authorities may transfer those portfolios of contracts that are part of arrangements and agreements as referred to in paragraph 1 without transferring other assets, rights and liabilities that are part of the same arrangements and agreements, and may transfer, modify or terminate those assets, rights and other liabilities without transferring the portfolios of contracts.
Article 60
Protection for security arrangements
1.   Member States shall ensure that there is appropriate protection for liabilities secured under a security arrangement to prevent one or more of the following:
(a)
the transfer of assets against which the liability is secured, unless that liability and benefit of the security are also transferred;
(b)
the transfer of a secured liability, unless the benefit of the security are also transferred;
(c)
the transfer of the benefit of the security, unless the secured liability is also transferred;
(d)
the modification or termination of a security arrangement through the use of ancillary powers, where the effect of that modification or termination would be that the liability ceases to be secured.
2.   Notwithstanding paragraph 1, where necessary to better protect policy holders by ensuring that insurance policies that are transferred continue to meet the relevant legal requirements with respect to compulsory minimum levels of coverage under applicable national law, resolution authorities may transfer those portfolios of contracts which are part of arrangements mentioned in paragraph 1 without transferring other assets, rights and liabilities that are part of the same arrangements, and may transfer, modify or terminate those assets, rights and other liabilities without transferring the portfolios of contracts.
Article 61
Protection for structured finance arrangements and other ring-fenced portfolios
1.   Member States shall ensure that there is appropriate protection for structured finance arrangements or other ring-fenced portfolios, including arrangements referred to in Article 58(1), points (e) and (g), to prevent either of the following:
(a)
the transfer of some, but not all, of the assets, rights and liabilities which constitute or form part of a structured finance arrangement or other ring-fenced portfolios, including the arrangements referred to in Article 58(1), points (e) and (g), to which the undertaking under resolution is a party;
(b)
the termination or modification through the use of ancillary powers of the assets, rights and liabilities which constitute or form part of a structured finance arrangement or other ring-fenced portfolios, including arrangements referred to in Article 58(1), points (e) and (g), to which the undertaking under resolution is a party.
2.   Notwithstanding paragraph 1, where necessary to better achieve the resolution objectives referred to in Article 18 and in particular to ensure a better protection of policy holders, resolution authorities may transfer, modify or terminate assets, rights or liabilities that are part of the same arrangement.
Article 62
Partial transfers: protection of trading, clearing and settlement systems
1.   Member States shall ensure that the application of a resolution tool does not affect the operation of systems and rules of systems covered by Directive 98/26/EC, where the resolution authority does either of the following:
(a)
transfers some, but not all of the assets, rights or liabilities of an undertaking under resolution to another entity;
(b)
uses the ancillary powers referred to in Article 43 to cancel or amend the terms of a contract to which the undertaking under resolution is a party or to substitute a recipient as a party.
2.   A transfer, cancellation or amendment as referred to in paragraph 1 of this Article shall not:
(a)
revoke a transfer order in contravention of Article 5 of Directive 98/26/EC;
(b)
modify or negate the enforceability of transfer orders and netting as required by Articles 3 and 5 of Directive 98/26/EC, the use of funds, securities or credit facilities as required by Article 4 of that Directive or the protection of collateral security as required by Article 9 of that Directive.
CHAPTER VI
Procedural obligations
Article 63
Notification requirements
1.   Member States shall require the administrative, management or supervisory body of an entity as referred to in Article 1(1), points (a) to (e), to notify the supervisory authority where those bodies consider that the entity referred to in Article 1(1), points (a) to (e), is failing or likely to fail, within the meaning specified in Article 19(4).
2.   Supervisory authorities shall inform the resolution authorities concerned of:
(a)
any notifications received under paragraph 1 of this Article, under Article 136, Article 138(1) and Article 139(1) of Directive 2009/138/EC;
(b)
any actions the supervisory authority requires the entity referred to in Article 1(1), points (a) to (e), to take pursuant to the exercise of the powers it has under Article 15 or 16 of this Directive, and under Article 136a, Article 137, Article 138(3) and (5), Article 139(3), and Articles 140, 141 and 144 of Directive 2009/138/EC;
(c)
any extension of the recovery period pursuant to Article 138(4) of Directive 2009/138/EC.
The supervisory authorities shall also provide the resolution authorities with a copy of the recovery plan that the entity referred to in Article 1(1), points (a) to (e), of this Directive has submitted pursuant to Article 138(2) of Directive 2009/138/EC, a copy of the finance scheme that the entity referred to in Article 1(1), points (a) to (e), of this Directive has submitted pursuant to Article 139(2) of Directive 2009/138/EC and the supervisory authorities’ opinion on those documents, as applicable.
3.   A supervisory authority or resolution authority that determines that the conditions referred to in Article 19(1), points (a) and (b), are met in relation to an entity referred to in Article 1(1), points (a) to (e), shall communicate that determination without delay to the following authorities, if different:
(a)
the resolution authority for that entity;
(b)
the supervisory authority for that entity;
(c)
the supervisory authority of any Member State where that entity carries out significant cross-border activities;
(d)
the resolution authority of any Member State where that entity carries out significant cross-border activities;
(e)
the insurance guarantee scheme to which that entity is affiliated, where applicable and where necessary to enable the functions of the insurance guarantee scheme to be discharged;
(f)
where applicable, the group-level resolution authority;
(g)
the competent ministry;
(h)
where applicable, the group supervisor;
(i)
the European Systemic Risk Board and the designated national macroprudential authority;
(j)
where the entity is part of a financial conglomerate, the relevant resolution authority designated in accordance with Article 3 of Directive 2014/59/EU and the relevant competent authority within the meaning of Directive 2013/36/EU of the European Parliament and of the Council 
(
24
)
 and Regulation (EU) No 575/2013.
Article 64
Decision of the resolution authority
1.   On receiving a communication from the supervisory authority pursuant to Article 63(3), or on its own initiative, the resolution authority shall determine whether the conditions of Article 19(1) or Article 20(3) are met in respect of the entity referred to in Article 1(1), points (a) to (e), in question.
2.   A decision to take or not to take resolution action in relation to an entity as referred to in Article 1(1), points (a) to (e), shall contain the reasons for that decision.
Where a decision to take a resolution action is taken, the decision shall also include the following information: the resolution action, and, where appropriate, the determination to apply for winding-up, the appointment of an administrator or any other measure under applicable normal insolvency proceedings or other resolution measures, subject to Article 26(7), under national law.
Article 65
Procedural obligations of resolution authorities
1.   Member States shall ensure that, as soon as reasonably practicable after taking a resolution action, resolution authorities comply with the requirements laid down in paragraphs 2 and 3.
2.   Resolution authorities shall notify the undertaking under resolution and the following authorities, if different, of the resolution action referred to in paragraph 1:
(a)
the supervisory authority for the undertaking under resolution;
(b)
the supervisory authority of any branch of the undertaking under resolution;
(c)
the central bank of the Member State in which the undertaking under resolution is established;
(d)
where applicable, the insurance guarantee scheme to which the undertaking under resolution is affiliated;
(e)
where applicable, the group-level resolution authority;
(f)
the competent ministry;
(g)
where applicable, the group supervisory authority;
(h)
the European Systemic Risk Board and the designated national macroprudential authority;
(i)
the Commission, the European Central Bank, EIOPA, ESMA and EBA;
(j)
where the undertaking under resolution is an institution as defined in Article 2, point (b), of Directive 98/26/EC, the operators of the systems in which it participates;
(k)
where the undertaking in resolution is part of a financial conglomerate, the relevant resolution authority designated in accordance with Article 3 of Directive 2014/59/EU and the relevant competent authority within the meaning of Directive 2013/36/EU and Regulation (EU) No 575/2013.
3.   The resolution authority shall publish or ensure the publication of a copy of the order or instrument by which the resolution action is taken, or a notice summarising the effects of the resolution action, including the effects on policy holders and, where applicable, the terms and period of suspension or restriction referred to in Articles 49, 50 and 51, by the following means:
(a)
on its official website;
(b)
on the website of the supervisory authority, if different from the resolution authority, and on the website of EIOPA;
(c)
on the website of the undertaking under resolution;
(d)
where the shares, other instruments of ownership or debt instruments of the undertaking under resolution are admitted to trading on a regulated market, the means used for the disclosure of regulated information concerning the undertaking under resolution in accordance with Article 21(1) of Directive 2004/109/EC of the European Parliament and of the Council 
(
25
)
.
4.   Where the shares, instruments of ownership or debt instruments are not admitted to trading on a regulated market, the resolution authority shall ensure that the documents providing proof of the instruments referred to in paragraph 3 are sent to the shareholders and creditors of the undertaking under resolution that are known through the registers or databases of the undertaking under resolution and which are available to the resolution authority.
Article 66
Confidentiality
1.   Member States shall ensure that the requirements of professional secrecy are binding in respect of the following persons, authorities and bodies and that no confidential information is disclosed by any of them:
(a)
resolution authorities;
(b)
supervisory authorities and EIOPA;
(c)
competent ministries;
(d)
special managers appointed in accordance with Article 44 of this Directive;
(e)
potential acquirers that have been contacted by the supervisory authorities or solicited by the resolution authorities, irrespective of whether that contact or solicitation was made as a preparation for the use of the sale-of-business tool, and irrespective of whether the solicitation resulted in an acquisition;
(f)
auditors, accountants, legal and professional advisors, valuers and other experts directly or indirectly engaged by the resolution authorities, supervisory authorities, competent ministries or by the potential acquirers referred to in point (e);
(g)
bodies which administer insurance guarantee schemes;
(h)
the body in charge of the financing arrangements;
(i)
central banks and other authorities involved in the resolution process;
(j)
a bridge undertaking or an asset and liability management vehicle;
(k)
any other person who provides or has provided services directly or indirectly, permanently or occasionally, to persons referred to in points (a) to (j);
(l)
senior management, members of the administrative, management and supervisory body, and employees of the bodies or entities referred to in points (a) to (j) before, during and after their appointment.
(m)
the relevant resolution authority designated in accordance with Article 3 of Directive 2014/59/EU and the competent authority within the meaning of Regulation (EU) No 575/2013.
2.   Without prejudice to the generality of the requirements under paragraph 1, Member States shall ensure that the persons referred to in paragraph 1 are prohibited from disclosing confidential information received during the course of their professional activities, or received from a supervisory authority or resolution authority in connection with that authority’s functions, to any person or authority, unless in the following situations:
(a)
the disclosure is made in the exercise of their functions under this Directive;
(b)
the disclosure is made in summary or collective form in such a way that individual entities referred to in Article 1(1), points (a) to (e), cannot be identified;
(c)
the disclosure is made with the express and prior consent of the authority or the entity referred to in Article 1(1), points (a) to (e), which provided the information.
Member States shall ensure that the persons referred to in paragraph 1 assess the possible effects of disclosing information on the public interest in relation to financial, monetary or economic policy, on the commercial interests of natural and legal persons, on the purposes of inspections, on investigations and on audits.
The procedure for assessing the effects referred to in the second subparagraph shall include a specific assessment of the effects of any disclosure of the contents and details of pre-emptive recovery plans and resolution plans as referred to in Articles 5, 7, 9, 10 and 12 and the result of any assessment carried out under Articles 6, 8 and 13.
Member States shall ensure that any person or entity referred to in paragraph 1 is subject to civil liability in the event of an infringement of this Article.
3.   Member States shall ensure that the persons referred to in paragraph 1, points (a), (b), (c), (g), (i) and (j), have internal rules in place to ensure compliance with the confidentiality requirements laid down in paragraphs 1 and 2, including rules to secure secrecy of information between persons directly involved in the resolution process.
4.   Paragraphs 1 to 3 of this Article shall not prevent:
(a)
employees and experts of the bodies or entities referred to in paragraph 1, points (a) to (i), from sharing information among themselves within each body or entity;
(b)
resolution authorities and supervisory authorities, including their employees and experts, from sharing information with each other and with other Union resolution authorities, other Union supervisory authorities, competent ministries, central banks, insurance guarantee schemes, authorities responsible for normal insolvency proceedings, authorities responsible for maintaining the stability of the financial system in Member States through the use of macroprudential rules, persons charged with carrying out statutory audits of accounts, EIOPA, or, subject to Article 80, third-country authorities that carry out functions that are equivalent to the functions carried out by resolution authorities, or, subject to strict confidentiality requirements, to a potential acquirer for the purpose of planning or carrying out a resolution action;
(c)
the exchange of information between resolution authorities and tax authorities in the same Member State to the extent that such exchange is allowed by national law; where that information originates in another Member State, it shall be exchanged only with the express consent of the authority from which the information originates.
5.   Member States may authorise the exchange of information with any of the following:
(a)
subject to strict confidentiality requirements, any other person where necessary for the purpose of planning or carrying out a resolution action;
(b)
parliamentary enquiry committees in their Member State, courts of auditors in their Member State and other entities in charge of enquiries in their Member State, under appropriate conditions;
(c)
national authorities responsible for overseeing payment systems, the authorities responsible for normal insolvency proceedings, the authorities entrusted with the public duty of supervising other financial sector entities, the authorities responsible for the supervision of financial markets, credit institutions and investment firms and inspectors acting on their behalf, the authorities of Member States responsible for maintaining the stability of the financial system in Member States through the use of macroprudential rules, the authorities responsible for protecting the stability of the financial system, and persons charged with carrying out statutory audits.
6.   Paragraphs 1 to 5 shall be without prejudice to national law concerning the disclosure of information for the purposes of legal proceedings in criminal or civil cases.
7.   EIOPA shall, by 29 January 2027, issue guidelines in accordance with Article 16 of Regulation (EU) No 1094/2010 to specify how information should be provided in summary or collective form for the purposes of paragraph 2, point (b), of this Article.
CHAPTER VII
Right of appeal and exclusion of other actions
Article 67
Ex ante
 judicial approval and rights to challenge decisions
1.   Member States may require that a decision to take a crisis prevention measure or a crisis management measure is subject to 
ex ante
 judicial approval, provided that in respect of a decision to take a crisis management measure, in accordance with national law, the procedure relating to the application for approval and the court’s consideration is expeditious.
2.   Member States shall provide in national law for a right of appeal against a decision to take a crisis prevention measure or a decision to exercise any power, other than a crisis management measure, under this Directive.
3.   Member States shall ensure that all persons affected by a decision to take a crisis management measure have the right to appeal against that decision.
Member States shall ensure that the review of a crisis management measure is expeditious and that national courts use the economic assessments of the facts carried out by the resolution authority as a basis for their own assessment.
4.   The right to appeal referred to in paragraph 3 shall be subject to the following requirements:
(a)
the lodging of an appeal shall not entail any automatic suspension of the effects of the challenged decision;
(b)
the decision of the resolution authority shall be immediately enforceable and shall give rise to a rebuttable presumption that a suspension of its enforcement would be against the public interest.
Where it is necessary to protect the interests of third parties acting in good faith who have acquired shares, other instruments of ownership, assets, rights or liabilities of an undertaking under resolution by virtue of the use of resolution tools or the exercise of resolution powers by a resolution authority, the annulment of a decision of a resolution authority shall not affect any subsequent administrative acts or transactions concluded by the resolution authority concerned which were based on the annulled decision. In that case, remedies for a wrongful decision or action by the resolution authorities shall be limited to compensation for the loss suffered by the applicant as a result of the annulled decision or act.
Article 68
Restrictions on other proceedings
1.   Without prejudice to Article 64(2), second subparagraph, Member States shall ensure with respect to an undertaking under resolution or an entity referred to in Article 1(1), points (a) to (e), in relation to which the conditions for resolution referred to in Article 19(1) or Article 20(3) have been determined to be met, that normal insolvency proceedings shall not be commenced except at the initiative of the resolution authority and that a decision placing an entity referred to in Article 1(1), points (a) to (e), into normal insolvency proceedings shall be taken only with the consent of the resolution authority.
2.   For the purposes of paragraph 1, Member States shall ensure that:
(a)
supervisory authorities and resolution authorities are notified without delay of any application for the opening of normal insolvency proceedings in relation to an entity referred to in Article 1(1), points (a) to (e), irrespective of whether that undertaking or entity is under resolution or whether a decision has been made public in accordance with Article 65(3) and (4);
(b)
the application for the opening of normal insolvency proceedings is not determined unless the notifications referred to in point (a) have been made and either of the following occurs:
(i)
the resolution authority has notified the authorities responsible for normal insolvency proceedings that it does not intend to take any resolution action in relation to the entity referred to in Article 1(1), points (a) to (e);
(ii)
a period of seven days beginning with the date on which the notifications referred to in point (a) were made has expired.
3.   Without prejudice to any restriction on the enforcement of security interests imposed pursuant to Article 50, Member States shall ensure that, if necessary for the effective application of resolution tools and the effective exercise of resolution powers, resolution authorities may request a court to apply a stay for an appropriate period in accordance with the objective pursued, on any judicial action or proceeding in which an undertaking under resolution is or becomes a party.
TITLE IV
CROSS-BORDER GROUP RESOLUTION
Article 69
General principles regarding decision-making involving more than one Member State
Member States shall ensure that, when making decisions or taking action pursuant to this Directive which may have an impact in one or more other Member States, their authorities have regard to the following general principles:
(a)
when taking resolution action, decision-making is efficient and resolution costs are kept as low as possible;
(b)
decisions are made and action is taken in a timely manner and with due urgency when required;
(c)
resolution authorities, supervisory authorities and other authorities cooperate with each other to ensure that decisions are made and action is taken in a coordinated and efficient manner;
(d)
the roles and responsibilities of relevant authorities within each Member State are defined clearly;
(e)
due consideration is given to the interests, potential impact of any decisions, actions or inactions and negative effects on policy holders, financial stability, fiscal resources, insurance guarantee schemes, financing arrangements and negative economic and social effects in all the Member States where the ultimate parent undertaking and its subsidiary undertakings operate or where they carry out significant cross-border activities;
(f)
due consideration is given to the objectives of balancing the interests of the various Member States involved and of avoiding unfairly prejudicing or unfairly protecting the interests of particular Member States;
(g)
resolution authorities, when taking resolution actions, take into account and follow the group resolution plans, unless the resolution authorities consider, taking into account the circumstances of the case, that the resolution objectives will be achieved more effectively by taking actions which are not provided for in the resolution plans;
(h)
a proposed decision or action is transparent whenever that decision or action is likely to have implications on the policy holders, real economy, financial stability, fiscal resources, and, where relevant, insurance guarantee schemes and financing arrangements of any Member State concerned.
Article 70
Resolution colleges
1.   Group-level resolution authorities shall establish resolution colleges to carry out the tasks referred to in Articles 10, 11, 14, 16, 73 and 74, and, where appropriate, to ensure cooperation and coordination with third-country resolution authorities.
In particular, resolution colleges shall provide a framework for the group-level resolution authority, the other resolution authorities and, where appropriate, supervisory authorities and group supervisors concerned, to perform the following tasks:
(a)
exchanging information that is relevant for the development of group resolution plans and for the exercise of resolution powers with respect to groups;
(b)
developing group resolution plans;
(c)
assessing the resolvability of groups pursuant to Article 14;
(d)
exercising powers to address or remove impediments to the resolvability of groups pursuant to Article 16;
(e)
deciding on the need to establish a group resolution scheme as referred to in Article 73 or 74;
(f)
reaching the agreement on a group resolution scheme proposed in accordance with Article 73 or 74;
(g)
coordinating public communication of group resolution strategies and schemes;
(h)
coordinating the use of any insurance guarantee schemes or financing arrangements.
In addition, resolution colleges may be used as a forum to discuss any issues relating to cross-border group resolution.
2.   The following shall be members of the resolution college:
(a)
the group-level resolution authority;
(b)
the resolution authorities of each Member State in which a subsidiary undertaking covered by group supervision is established;
(c)
the resolution authorities of Member States where a parent undertaking of one or more undertakings of the group that is an entity as referred to in Article 1(1), point (b), (d) or (e), are established;
(d)
the group supervisor and the supervisory authorities of the Member States where the resolution authority is a member of the resolution college;
(e)
the competent ministries, where the resolution authorities which are members of the resolution college are not the competent ministries;
(f)
where relevant, the authority that is responsible for the insurance guarantee scheme of a Member State, where the resolution authority of that Member State is a member of the resolution college;
(g)
EIOPA, subject to the second subparagraph;
(h)
the resolution authorities in Member States where the insurance or reinsurance undertakings of the group carry out significant cross-border activities.
For the purposes of the first subparagraph, point (g), EIOPA shall contribute to promoting and monitoring the efficient, effective and consistent functioning of resolution colleges and convergence across resolution colleges. EIOPA shall be invited to attend the meetings of the resolution college for that purpose. EIOPA shall not have any voting rights.
For the purposes of the first subparagraph, point (h), the participation of the resolution authorities shall be limited to achieving the objectives of an efficient exchange of information.
3.   The resolution authorities of third countries where a parent undertaking or an undertaking established in the Union has a subsidiary insurance or reinsurance undertaking or a branch that would be considered to be significant were it located in the Union may be invited to participate in the resolution college as observers, provided that those authorities are subject to confidentiality requirements that are, in the opinion of the group-level resolution authority, equivalent to those laid down in Article 80.
4.   Where the group is or is part of a financial conglomerate, the authorities designated in accordance with Article 3 of Directive 2014/59/EU concerned shall be invited to the resolution college as observers.
5.   The group-level resolution authority shall be the chair of the resolution college. In that capacity it shall:
(a)
establish written arrangements and procedures for the functioning of the resolution college, after having consulted the other members of the resolution college;
(b)
coordinate all activities of the resolution college;
(c)
convene and chair all the meetings of the resolution college and keep all members of the resolution college fully informed in advance of the organisation of meetings of the resolution college, of the main issues to be discussed and of the items to be considered;
(d)
notify the members of the resolution college of any planned meetings so that they can request to participate;
(e)
decide which members and observers shall be invited to attend particular meetings of the resolution college, on the basis of specific needs, taking into account the relevance of the issue to be discussed for those members and observers;
(f)
keep all of the members of the college informed, in a timely manner, of the decisions and outcomes of those meetings.
Notwithstanding the first subparagraph, point (e), resolution authorities shall be entitled to participate in resolution college meetings whenever matters subject to joint decision-making or relating to a group entity located in their Member State are on the agenda.
6.   Group-level resolution authorities shall not be obliged to establish a resolution college if other groups or colleges perform the same functions and carry out the same tasks specified in paragraph 1 and comply with all the conditions and procedures, including those covering membership and participation in resolution colleges, laid down in this Article and in Article 72. In such a case, all references to resolution colleges in this Directive shall be understood as references to those other groups or colleges.
7.   EIOPA shall develop draft regulatory technical standards to specify the operational functioning of the resolution colleges for the performance of the tasks referred to in paragraph 1.
EIOPA shall submit those draft regulatory technical standards to the Commission by 29 July 2026.
Power is delegated to the Commission to supplement this Directive by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.
Article 71
European resolution colleges
1.   Where a third-country insurance or reinsurance undertaking or third-country parent undertaking has Union subsidiary undertakings established in two or more Member States, or two or more Union branches of a third-country undertaking that are regarded as significant by two or more Member States, the resolution authorities of the Member States where those Union subsidiary undertakings are established or where those Union branches of a third-country undertaking are located may establish a European resolution college.
2.   The European resolution college shall perform the functions and carry out the tasks specified in Article 70 with respect to the Union subsidiary undertakings and, insofar as those tasks are relevant, to Union branches of a third-country undertaking referred to in paragraph 1 of this Article and shall otherwise function in accordance with the rules laid down in Article 70.
3.   Where only one parent undertaking established in a Member State holds all Union subsidiary undertakings of a third-country insurance or reinsurance undertaking or third-country parent undertaking, the European resolution college shall be chaired by the resolution authority of the Member State where that parent undertaking is established.
Where the first subparagraph does not apply, the resolution authority of the Member State in which a Union subsidiary undertaking with the highest value of total on-balance sheet assets is established shall chair the European resolution college.
Article 72
Information exchange
1.   Subject to Article 66, resolution authorities and supervisory authorities shall provide one another on request with all the information relevant for the exercise of the other authorities’ tasks under this Directive.
2.   The group-level resolution authority shall coordinate the flow of all relevant information between resolution authorities. In particular, the group-level resolution authority shall provide the resolution authorities in other Member States with all the relevant information in a timely manner to facilitate the exercise of the tasks referred to in Article 70(1), second subparagraph, points (b) to (h).
3.   A resolution authority shall not transmit information that has been provided by a third-country supervisory or resolution authority unless that third-country supervisory or resolution authority has consented to such transmission.
Article 73
Group resolution involving a subsidiary undertaking of the group
1.   A resolution authority shall notify the information listed in paragraph 2 without delay to the group-level resolution authority, if different, to the group supervisor, and to the members of the resolution college concerned where:
(a)
the resolution authority decides that an insurance or reinsurance undertaking that is a subsidiary undertaking of a group, is failing or likely to fail; or
(b)
the resolution authority has been informed by the supervisory authority that a decision has been made that an insurance or reinsurance undertaking that is a subsidiary undertaking of a group, is failing or likely to fail; or
(c)
a resolution authority decides that an entity as referred to in Article 1(1), points (a) to (e), that is a subsidiary undertaking of a group, meets the conditions for resolution laid down in Article 19(1) or Article 20(3).
2.   The information to be notified pursuant to paragraph 1 shall be the following:
(a)
the decision determining that the insurance or reinsurance undertaking is failing or likely to fail;
(b)
the decision that the entity referred to in Article 1(1), points (a) to (e), meets the conditions for resolution laid down in Article 19(1) or Article 20(3);
(c)
the resolution actions or insolvency measures that the resolution authority considers to be appropriate for the entity referred to in Article 1(1), points (a) to (e).
3.   On receiving the notification referred to in paragraph 1, the group-level resolution authority, after having consulted the other members of the resolution college concerned, shall assess the likely impact of the resolution actions or other measures notified pursuant to paragraph 2, point (c), on the group and on group entities in other Member States, and whether the resolution actions or other measures would make it likely that the conditions for resolution referred to in Article 19(1) or Article 20(3) would be satisfied in relation to a group entity in another Member State.
4.   Where the group-level resolution authority assesses that the resolution actions or other measures notified pursuant to paragraph 2, point (c), would not make it likely that the conditions laid down in Article 19(1) or Article 20(3) would be satisfied in relation to a group entity in another Member State, the resolution authority responsible for the entity referred to in Article 1(1), points (a) to (e), may take the resolution actions or other measures that it notified.
5.   Where the group-level resolution authority assesses that the resolution actions or other measures notified pursuant to paragraph 2, point (c), would make it likely that the conditions laid down in Article 19(1) or Article 20(3) would be satisfied in relation to a group entity in another Member State, the group-level resolution authority shall, after receiving the notification referred to in paragraph 1, propose a group resolution scheme within five days and submit that scheme to the resolution college. That five-day period may be extended with the consent of the resolution authority which made the notification.
6.   In the absence of an assessment by the group-level resolution authority within five days, or a longer period that has been agreed, after having received the notification referred to in paragraph 1, the resolution authority which made the notification may take the resolution actions or other measures that it notified.
7.   The group resolution scheme referred to in paragraph 5 shall:
(a)
outline the resolution actions that the resolution authorities concerned should take in relation to the ultimate parent undertaking or particular group entities to meet the resolution objectives and to comply with the general principles governing resolution laid down in Article 22;
(b)
specify how the resolution actions referred to in point (a) should be coordinated;
(c)
establish a financing plan which takes into account the group resolution plan and the principles for sharing responsibility set out in that group resolution plan in accordance with Article 10(2), point (e).
8.   Subject to paragraph 9, the group resolution scheme shall take the form of a joint decision of the group-level resolution authority and the resolution authorities responsible for the subsidiary undertakings that are covered by the group resolution scheme.
EIOPA may, at the request of a resolution authority, assist the resolution authorities in reaching a joint decision in accordance with Article 31(2), point (c), of Regulation (EU) No 1094/2010.
9.   A resolution authority that disagrees with the group resolution scheme proposed by the group-level resolution authority or that considers that, for reasons of protection of the collective interest of policy holders, the real economy and financial stability, it needs to take independent resolution actions or measures other than those proposed in the group resolution scheme in relation to an entity referred to in of Article 1(1), points (a) to (e), shall:
(a)
set out in detail the reasons for the disagreement or the reasons to depart from the group resolution scheme;
(b)
notify the group-level resolution authority and the other resolution authorities that are covered by the group resolution scheme of the reasons referred to in point (a);
(c)
inform the group-level resolution authority and the other resolution authorities that are concerned by the group resolution scheme about the resolution actions or measures it will take.
When setting out the reasons for its disagreement, the resolution authority shall take into consideration the group resolution plans, the potential impact of the resolution actions or measures it will take on policy holders, the real economy and financial stability in the Member States concerned, and the potential effect of those resolution actions or measures on other parts of the group.
10.   Resolution authorities that agree with the group resolution scheme proposed by the group-level resolution authority may reach a joint decision on a group resolution scheme covering group entities in those resolution authorities’ Member States without the participation of the disagreeing resolution authorities.
11.   The joint decisions referred to in paragraphs 8 and 10 and the resolution actions or measures taken in accordance with paragraph 9 shall be recognised as conclusive and applied by the resolution authorities in the Member States concerned.
12.   Resolution authorities shall take all resolution actions and measures referred to in this Article without delay, and with due regard to the urgency of the situation.
13.   Where a group resolution scheme is not implemented, resolution authorities shall, when taking resolution actions in relation to any group entity, cooperate closely within the resolution college to achieve a coordinated resolution strategy for all the group entities that are failing or likely to fail.
14.   Resolution authorities that take any resolution action in relation to any group entity shall inform the members of the resolution college regularly and fully about those actions or measures and their on-going progress.
Article 74
Group resolution involving an ultimate parent undertaking
1.   A group-level resolution authority that decides that an ultimate parent undertaking for which it is responsible meets the conditions referred to in Article 19(1) or Article 20(3) shall notify the information referred to in Article 73(2) to the group supervisor and to the other members of the resolution college of the group in question without delay.
The resolution actions or insolvency measures referred to in Article 73(2), point (c), may include the implementation of a group resolution scheme drawn up in accordance with Article 73(7) in any of the following circumstances:
(a)
the resolution actions or measures at parent level notified in accordance with Article 73(2), point (c), make it likely that the conditions laid down in Article 19(1) or Article 20(3) would be fulfilled in relation to a group entity in another Member State;
(b)
resolution actions or other measures at parent level only are not sufficient to stabilise the situation or are not likely to provide an optimum outcome;
(c)
the resolution authorities have determined that one or more subsidiary undertakings for which they are responsible meet the conditions referred to in Article 19(1) or Article 20(3);
(d)
resolution actions or other measures at group level will benefit the subsidiary undertakings of the group in a way that makes a group resolution scheme appropriate.
2.   Where the actions or measures proposed by the group-level resolution authority do not contain a group resolution scheme, the group-level resolution authority shall take its decision after having consulted the members of the resolution college.
3.   Where the actions or measures proposed by the group-level resolution authority do contain a group resolution scheme, the group resolution scheme shall take the form of a joint decision of the group-level resolution authority and the resolution authorities responsible for the subsidiary undertakings that are covered by the group resolution scheme.
EIOPA may, at the request of a resolution authority, assist the resolution authorities in reaching a joint decision in accordance with Article 31(2), point (c), of Regulation (EU) No 1094/2010.
4.   A resolution authority that disagrees with or departs from the group resolution scheme proposed by the group-level resolution authority or considers that, for reasons of financial stability, it needs to take independent resolution actions or measures other than those proposed in the group resolution scheme in relation to an entity as referred to in Article 1(1), points (a) to (e) shall:
(a)
set out in detail the reasons for the disagreement or the reasons to depart from the group resolution scheme;
(b)
notify the group-level resolution authority and the other resolution authorities that are covered by the group resolution scheme of the reasons referred to in point (a);
(c)
inform the group-level resolution authority and the other resolution authorities that are covered by the group resolution scheme about the actions or measures it intends to take.
When setting out the reasons for its disagreement, the resolution authority concerned shall give due consideration to the group resolution plans, the potential impact of the independent resolution actions or measures it will take on financial stability, fiscal resources, insurance guarantee schemes and any financing arrangements in the Member States concerned and the potential effect of the resolution actions or other measures on other parts of the group.
5.   Resolution authorities that agree with the group resolution scheme proposed by the group-level resolution authority may reach a joint decision on a group resolution scheme covering group entities in their respective Member States without the participation of the disagreeing resolution authorities.
6.   The joint decision referred to in paragraph 3 or 5 and the resolution actions and measures referred to in paragraph 4 shall be recognised as conclusive and applied by the resolution authorities in the Member States concerned.
7.   Authorities shall perform all resolution actions and measures referred to in paragraphs 1 to 6 without delay, and with due regard to the urgency of the situation.
8.   Where a group resolution scheme is not implemented, resolution authorities shall, when taking resolution action in relation to any group entity, cooperate closely within the resolution college to achieve a coordinated resolution strategy for all affected group entities.
9.   Resolution authorities that take resolution action in relation to any group entity shall inform the members of the resolution college regularly and fully about those actions or measures and their on-going progress.
TITLE V
RELATIONS WITH THIRD COUNTRIES
Article 75
Agreements with third countries
1.   In accordance with Article 218 TFEU, the Commission may submit to the Council proposals for the negotiation of agreements with one or more third countries regarding the means of cooperation between the resolution authorities and the third-country authorities concerned, including the sharing of information in connection with recovery and resolution planning in relation to insurance and reinsurance undertakings, third-country insurance and reinsurance undertakings, and groups.
2.   The agreements referred to in paragraph 1 shall seek to ensure the establishment of processes and arrangements between resolution authorities and the third-country authorities concerned for cooperation in carrying out some or all of the tasks and exercising some or all of the powers referred to in Article 79.
3.   Member States may enter into bilateral agreements with a third country, to the extent that such bilateral agreements are not inconsistent with this Title, regarding the matters referred to in paragraphs 1 and 2 until the entry into force of an agreement as referred to in paragraph 1 with the relevant third country.
Article 76
Recognition and enforcement of third-country resolution proceedings
1.   This Article shall apply in respect of third-country resolution proceedings unless and until an international agreement as referred to in Article 75(1) enters into force with the third country concerned. It shall also apply following the entry into force of such an international agreement with the third country concerned to the extent that recognition and enforcement of third-country resolution proceedings is not governed by that agreement.
2.   The resolution authority concerned shall decide whether to recognise and enforce, except as provided for in Article 77, third-country resolution proceedings relating to a Union subsidiary undertaking or a Union branch of a third-country undertaking or a parent undertaking.
The decision shall give due consideration to the interests of each Member State where a third-country insurance or reinsurance undertaking or parent undertaking operates, and in particular to the potential impact of the recognition and enforcement of the third-country resolution proceedings on the other parts of the group and on the policy holders, the real economy and the financial stability in those Member States.
3.   Member States shall ensure that resolution authorities are, as a minimum, empowered to do the following:
(a)
exercise the resolution powers in relation to the following:
(i)
assets of a third-country insurance or reinsurance undertaking or parent undertaking that are located in their Member State or governed by the law of their Member State;
(ii)
rights or liabilities of a third-country insurance or reinsurance undertaking that are booked by the Union branch of a third-country undertaking in their Member State or governed by the law of their Member State, or where claims in relation to such rights and liabilities are enforceable in their Member State;
(b)
perfect, including to require another person to take action to perfect, a transfer of shares or other instruments of ownership in a Union subsidiary undertaking established in that Member State;
(c)
exercise the powers in Article 49, 50 or 51 in relation to the rights of any party to a contract with an entity referred to in paragraph 1 of this Article, where such powers are necessary in order to enforce third-country resolution proceedings; and
(d)
render unenforceable any right to terminate or accelerate contracts, or affect the contractual rights, of entities referred to in paragraph 2 and of other group entities, where such a right arises from resolution action taken in respect of the third-country insurance or reinsurance undertaking, the parent undertaking of such entities, or other group entities, whether taken by the third-country resolution authority itself or otherwise pursuant to legal or regulatory requirements concerning resolution arrangements in that country, provided that the substantive obligations under the contract, including payment and delivery obligations, and provision of collateral, continue to be performed.
4.   Resolution authorities may take, where necessary in the public interest, resolution action with respect to a parent undertaking where the relevant third-country authority determines that an insurance or reinsurance undertaking that is a subsidiary undertaking of that parent undertaking and that is incorporated in that third country meets the conditions for resolution under the law of that third country. To that end, Member States shall ensure that resolution authorities are empowered to use any resolution power in respect of that parent undertaking, and Article 48 shall apply.
5.   The recognition and enforcement of third-country resolution proceedings shall be without prejudice to any normal insolvency proceedings under national law applicable, where appropriate, in accordance with this Directive.
Article 77
Right to refuse recognition or enforcement of third-country resolution proceedings
The resolution authority may refuse to recognise or to enforce third-country resolution proceedings pursuant to Article 76 if it considers:
(a)
that the third-country resolution proceedings would have adverse effects on financial stability in the Member State in which the resolution authority is based or that the proceedings would have adverse effects on financial stability in another Member State;
(b)
that independent resolution action under Article 78 in relation to a Union branch of a third-country undertaking is necessary to achieve one or more of the resolution objectives;
(c)
that creditors would not receive the same treatment as third-country creditors with similar legal rights under the third-country home resolution proceedings;
(d)
that recognition or enforcement of the third-country resolution proceedings would have material fiscal implications for the Member State; or
(e)
that the effects of such recognition or enforcement would be contrary to the national law.
Article 78
Resolution of Union branches of third-country undertakings
1.   Member States shall ensure that resolution authorities have the powers necessary to act in relation to a Union branch of a third-country undertaking that is not subject to any third-country resolution proceedings or that is subject to third-country proceedings and one of the circumstances referred to in Article 77 applies.
Member States shall ensure that Article 48 applies to the exercise of such powers.
2.   Member States shall ensure that the powers required in paragraph 1 may be exercised by resolution authorities where the resolution authority considers that action is necessary in the public interest and one or more of the following conditions is met:
(a)
the Union branch of a third-country undertaking no longer meets, or is likely not to meet, the conditions imposed by national law for its authorisation and operation within that Member State and there is no prospect that any private sector, supervisory or relevant third-country action would restore the branch to compliance or prevent failure in a reasonable timeframe;
(b)
the third-country insurance or reinsurance undertaking is, in the opinion of the resolution authority, unable or unwilling, or is likely to be unable, to pay its obligations to Union creditors, or obligations that have been created or booked through the branch, such as payments to policy holders or beneficiaries, as they fall due and the resolution authority is satisfied that no third-country resolution proceedings or insolvency proceedings have been or will be initiated in relation to that third-country insurance or reinsurance undertaking in a reasonable timeframe;
(c)
the relevant third-country authority has initiated third-country resolution proceedings in relation to the third-country insurance or reinsurance undertaking, or has notified to the resolution authority its intention to initiate such a proceeding.
3.   Where a resolution authority takes an independent action in relation to a Union branch of a third-country undertaking, it shall have regard to the resolution objectives and take the action in accordance with the following principles and requirements, insofar as they are relevant:
(a)
the principles set out in Article 22;
(b)
the requirements relating to the application of the resolution tools in Title III, Chapter II.
Article 79
Cooperation with third-country authorities
1.   This Article shall apply in respect of cooperation with a third country unless and until an international agreement as referred to in Article 75(1) enters into force with the relevant third country. It shall also apply following the entry into force of such an international agreement to the extent that the subject matter of this Article is not governed by that agreement.
2.   EIOPA may conclude non-binding framework cooperation arrangements with relevant third-country authorities. The framework cooperation agreements shall establish processes and arrangements between the participating authorities for sharing information necessary for and cooperation in carrying out some or all or the following tasks and exercising some or all of the following powers in relation to insurance or reinsurance undertakings or groups:
(a)
the development of resolution plans in accordance with Articles 9 to 12 and similar requirements under the law of the relevant third countries;
(b)
the assessment of the resolvability of such insurance and reinsurance undertakings and groups, in accordance with Articles 13 and 14 and similar requirements under the law of the relevant third countries;
(c)
the application of powers to address or remove impediments to resolvability pursuant to Articles 15 and 16 and any similar powers under the law of the relevant third countries;
(d)
the application of preventive measures pursuant to Article 141 of Directive 2009/138/EC and similar powers under the law of the relevant third countries;
(e)
the application of resolution tools and exercise of resolution powers and similar powers exercisable by the relevant third-country authorities.
3.   Supervisory or resolution authorities, where appropriate, may conclude cooperation arrangements with relevant third-country authorities in line with the EIOPA framework arrangement referred to in paragraph 2.
4.   Member States shall notify EIOPA of any cooperation arrangements that resolution authorities and supervisory authorities have concluded in accordance with this Article.
Article 80
Exchange of confidential information
1.   Member States shall ensure that resolution authorities, supervisory authorities and competent ministries exchange confidential information, including pre-emptive recovery plans, with relevant third-country authorities only if the following conditions are met:
(a)
those third-country authorities are subject to requirements and standards of professional secrecy at least considered to be equivalent, in the opinion of all the authorities concerned, to those imposed by Article 66.
(b)
the information is necessary for the performance by the relevant third-country authorities of their resolution functions under national law that are comparable to those under this Directive and, subject to point (a), is not used for any other purposes.
For the purposes of point (a), insofar as the exchange of information relates to personal data, the handling and transmission of such personal data to third-country authorities shall be governed by the applicable Union and national data-protection law.
2.   Where confidential information originates in another Member State, resolution authorities, supervisory authorities and competent ministries shall not disclose that information to relevant third-country authorities unless the following conditions are met:
(a)
the relevant authority of the Member State where the information originated (the originating authority) agrees to that disclosure;
(b)
the information is disclosed only for the purposes permitted by the originating authority.
Article 81
Financing arrangements
1.   Each Member State shall establish one or more financing arrangements to ensure that the resolution authority has at its disposal adequate funds through 
ex ante
 or 
ex post
 contributions or a combination thereof from insurance and reinsurance undertakings authorised in that Member State and from Union branches of third-country undertakings located in the territory of that Member State to cover at least the payment of the difference to shareholders, policy holders, beneficiaries, claimants or other creditors referred to in Article 57.
Member States may provide for the possibility to use financing arrangements referred to in the first subparagraph also to cover other costs associated with the use of resolution tools, insofar as the use of financing arrangements is necessary for the achievement of the resolution objectives.
Member States may use the same administrative structure for their financing arrangements as for their insurance guarantee schemes, taking into account Regulation (EC) No 883/2004 of the European Parliament and of the Council 
(
26
)
.
2.   Member States shall ensure that the use of financing arrangements complies with the principles laid down in Article 22.
3.   Where the undertaking under resolution operates within the Union under the right of establishment or the freedom to provide services, the relevant financing arrangement of the Member State in which the undertaking is authorised shall be used to provide compensation to shareholders, policy holders, beneficiaries, claimants or other creditors in accordance with Article 57.
4.   Member States shall notify the Commission and EIOPA of the established financing arrangements.
TITLE VI
PENALTIES
Article 82
Administrative penalties and other administrative measures
1.   Without prejudice to the powers of resolution and supervisory authorities laid down in this Directive and Directive 2009/138/EC and the right of Member States to provide for and impose criminal penalties, Member States shall lay down rules on administrative penalties and other administrative measures applicable where the national provisions transposing this Directive have not been complied with, and shall take all measures necessary to ensure that they are implemented.
Member States that decide not to lay down rules for administrative penalties or other administrative measures for infringements which are subject to national criminal law shall communicate to the Commission the criminal law provisions concerned.
The administrative penalties and other administrative measures provided for shall be effective, proportionate and dissuasive.
2.   Member States shall ensure that, in the event of an infringement, administrative penalties or other administrative measures can be applied, subject to the conditions laid down in national law, to the members of the administrative, management or supervisory body, and to other natural persons who under national law are responsible for the infringement.
3.   The powers to impose administrative penalties and other administrative measures provided for in this Directive shall be attributed to resolution authorities or to supervisory authorities, depending on the type of infringement. Resolution authorities and supervisory authorities shall have all information-gathering and investigatory powers that are necessary for the exercise of their respective functions. In the exercise of their powers to impose administrative penalties or other administrative measures, resolution authorities and supervisory authorities shall cooperate closely to ensure that administrative penalties or other administrative measures produce the desired results and coordinate their action when dealing with cross-border cases.
4.   Resolution authorities and supervisory authorities shall exercise their administrative powers to impose penalties and other administrative measures in accordance with this Directive and national law in any of the following ways:
(a)
directly;
(b)
in collaboration with other authorities;
(c)
under their responsibility by delegation to other authorities;
(d)
by application to the competent judicial authorities.
5.   Member States shall ensure that decisions taken by the resolution authorities and supervisory authorities in accordance with this Title are subject to a right of appeal.
Article 83
Specific provisions on administrative penalties and other administrative measures
1.   Member States shall ensure that their laws, regulations and administrative provisions provide for administrative penalties and other administrative measures at least in respect of the following situations:
(a)
an infringement of Articles 5 or 7 by failing to draw up, maintain and update pre-emptive recovery plans and group pre-emptive recovery plans;
(b)
an infringement of Article 12 by failing to provide all the information necessary for the development of resolution plans;
(c)
an infringement of Article 63(1) by the failure of the administrative, management or supervisory body of an entity referred to in Article 1(1), points (a) to (e), to notify the supervisory authority when that entity is failing or likely to fail.
2.   Member States shall ensure that, in the cases referred to in paragraph 1, the administrative penalties and other administrative measures that can be applied include at least the following:
(a)
a public statement indicating the natural person, the entity as referred to in Article 1(1), points (a) to (e), an ultimate parent undertaking or other legal person responsible for the infringement and the nature of the infringement;
(b)
an order requiring the natural or legal person responsible to cease the conduct and to desist from a repetition of that conduct;
(c)
a temporary ban on any member of the administrative, management or supervisory body or senior management of the entity referred to in Article 1(1), points (a) to (e), or any other natural person, who is held responsible, to exercise functions in an entity referred to in Article 1(1), points (a) to (e);
(d)
in the case of a legal person, administrative fines of up to 10 % of the total annual turnover of that legal person in the preceding business year;
(e)
in the case of a natural person, administrative fines of up to EUR 5 000 000, or in the Member States where the Euro is not the official currency, the corresponding value in the national currency on 28 January 2025;
(f)
administrative fines of up to twice the amount of the benefit derived from the infringement where that benefit can be determined.
For the purposes of the first subparagraph, point (d), where the legal person is a subsidiary undertaking of a parent undertaking, the relevant turnover shall be the total annual turnover resulting from the consolidated accounts of the ultimate parent undertaking in the preceding business year.
Article 84
Publication of administrative penalties and other administrative measures
1.   Member States shall ensure that resolution authorities and supervisory authorities publish on their official website at least any administrative penalties and other administrative measures imposed by those authorities for infringing the national provisions transposing this Directive where such administrative penalties or other administrative measures have not been the subject of an appeal or where the right of appeal has been exhausted. Such publication shall be made without undue delay after the natural or legal person is informed of that administrative penalty or other administrative measure. The publication shall contain information on the type and nature of the infringement and the identity of the natural or legal person on whom the administrative penalty or other administrative measure is imposed.
Where Member States permit publication of administrative penalties and other administrative measures against which there is an appeal, resolution authorities and supervisory authorities shall, without undue delay, publish on their official websites information on the status of that appeal and the outcome thereof.
2.   Where the resolution authority or supervisory authority considers that the publication of the identity of the legal persons, or identity or personal data of natural persons would be disproportionate following a case-by-case assessment conducted on the proportionality of the publication of such data, or where such a publication would jeopardise the stability of financial markets or an ongoing investigation, the resolution authority or supervisory authority shall do any of the following:
(a)
defer the publication of the decision imposing the administrative penalty or other administrative measures until the reasons for that deferral cease to exist;
(b)
publish the decision imposing the administrative penalty or other administrative measures on an anonymous basis in accordance with national law where such anonymous publication would ensure the effective protection of the personal data concerned;
(c)
not publish the decision imposing the administrative penalty or other administrative measures where the resolution authority or supervisory authority is of the opinion that publication in accordance with point (a) or (b) would be insufficient to ensure either of the following:
(i)
that the stability of financial markets is not jeopardised;
(ii)
the proportionality of the publication of such data with regard to measures which are deemed to be of a minor nature.
Resolution authorities and supervisory authorities shall ensure that any publication in accordance with this Article remains on their official website for a period of at least five years. Personal data contained in the publication shall be kept on the official website of the resolution authority or the supervisory authority only for the period which is necessary according to applicable data-protection rules.
Article 85
Maintenance of central database by EIOPA
1.   Subject to the professional secrecy requirements referred to in Article 66, resolution authorities and supervisory authorities shall inform EIOPA of all administrative penalties and other administrative measures imposed by them under Article 83 and of the status of that appeal and outcome thereof.
EIOPA shall maintain and keep updated a central database of penalties and other administrative measures reported to it by resolution authorities, solely to enable those resolution authorities to exchange information, which shall be accessible to those resolution authorities only.
EIOPA shall maintain and keep updated a central database of penalties and other administrative measures reported to it by supervisory authorities, solely to enable those supervisory authorities to exchange information, which shall be accessible to those supervisory authorities only.
2.   EIOPA shall maintain and keep updated a webpage with the following information or links to that information:
(a)
each resolution authority’s publication of penalties;
(b)
each supervisory authority’s publication of penalties under Article 84;
(c)
the period for which each Member State publishes penalties.
Article 86
Effective application of penalties and exercise of powers to impose penalties by supervisory authorities and resolution authorities
Member States shall ensure that, when determining the type of administrative penalties or other administrative measures and the level of administrative fines, the supervisory authorities and resolution authorities take into account all relevant circumstances, including where appropriate:
(a)
the gravity and the duration of the infringement;
(b)
the degree of responsibility of the natural or legal person responsible;
(c)
the financial strength of the natural or legal person responsible;
(d)
the amount of profits gained or losses avoided by the natural or legal person responsible, insofar as those profits or losses can be determined;
(e)
the losses for third parties, including policy holders, caused by the infringement, insofar as those losses can be determined;
(f)
the level of cooperation of the natural or legal person responsible with the supervisory authority and the resolution authority;
(g)
previous infringements by the natural or legal person responsible.
For the purposes of the first subparagraph, point (c), the indicators of financial strength of a natural or legal person shall include the total turnover of the responsible legal person or the annual income of the responsible natural person.
TITLE VII
AMENDMENTS TO DIRECTIVES 2002/47/EC, 2004/25/EC, 2007/36/EC, 2014/59/EU, (EU) 2017/1132 AND TO REGULATIONS (EU) No 1094/2010, (EU) No 648/2012, (EU) No 806/2014 AND (EU) 2017/1129
Article 87
Amendments to Directive 2002/47/EC
Directive 2002/47/EC is amended as follows:
(1)
in Article 1, paragraph 6 is replaced by the following:
‘6.   Articles 4 to 7 of this Directive shall not apply to any restriction on the enforcement of financial collateral arrangements or any restriction on the effect of a security financial collateral arrangement, any close out netting or set-off provision that is imposed by virtue of Title IV, Chapter V or VI, of Directive 2014/59/EU of the European Parliament and of the Council
 (
*1
)
, or of Title V, Chapter III, Section 3, or Chapter IV of Regulation (EU) 2021/23 of the European Parliament and of the Council
 (
*2
)
, or of Title III, Chapter III, Section 4, or Chapter IV of Directive (EU) 2025/1 of the European Parliament and of the Council
 (
*3
)
, or to any such restriction that is imposed by virtue of similar powers in the law of a Member State to facilitate the orderly resolution of any entity as referred to in paragraph 2, point (d), of this Article which is subject to safeguards at least equivalent to those set out in Title IV, Chapter VII, of Directive 2014/59/EU and in Title V, Chapter V, of Regulation (EU) 2021/23.
(
*1
)
  Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council (
OJ L 173, 12.6.2014, p. 190
)."
(
*2
)
  Regulation (EU) 2021/23 of the European Parliament and of the Council of 16 December 2020 on a framework for the recovery and resolution of central counterparties and amending Regulations (EU) No 1095/2010, (EU) No 648/2012, (EU) No 600/2014, (EU) No 806/2014 and (EU) 2015/2365 and Directives 2002/47/EC, 2004/25/EC, 2007/36/EC, 2014/59/EU and (EU) 2017/1132 (
OJ L 22, 22.1.2021, p. 1
)."
(
*3
)
  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
).’;"
(2)
Article 9a is replaced by the following:
‘Article 9a
Directive 2008/48/EC, Directive 2014/59/EU, Regulation (EU) 2021/23 and Directive (EU) 2025/1
This Directive is without prejudice to Directive 2008/48/EC, Directive 2014/59/EU, Regulation (EU) 2021/23 and Directive (EU) 2025/1.’
Article 88
Amendment to Directive 2004/25/EC
In Article 4(5) of Directive 2004/25/EC, the third subparagraph is replaced by the following:
‘Member States shall ensure that Article 5(1) of this Directive does not apply in the case of application of resolution tools, powers and mechanisms provided for in Title IV of Directive 2014/59/EU of the European Parliament and of the Council
 (
*4
)
, in Title V of Regulation (EU) 2021/23 of the European Parliament and of the Council
 (
*5
)
 or in Title III of Directive (EU) 2025/1 of the European Parliament and of the Council
 (
*6
)
.
Article 89
Amendments to Directive 2007/36/EC
In Article 1 of Directive 2007/36/EC, paragraph 4 is replaced by the following:
‘4.   Member States shall ensure that this Directive does not apply in the case of the application of resolution tools, powers and mechanisms provided for in Title IV of Directive 2014/59/EU of the European Parliament and of the Council
 (
*7
)
, in Title V of Regulation (EU) 2021/23 of the European Parliament and of the Council
 (
*8
)
 or in Title III of Directive (EU) 2025/1 of the European Parliament and of the Council
 (
*9
)
.
Article 90
Amendments to Directive 2014/59/EU
Directive 2014/59/EU is amended as follows:
(1)
in Article 2(1) the following points are added:
‘(110)
“insurance resolution authority” means a resolution authority as defined in Article 2, point (12), of Directive (EU) 2025/1 of the European Parliament and of the Council
 (
*10
)
;
(111)
“insurance supervisory authority” means a supervisory authority as defined in Article 13, point (10), of Directive 2009/138/EC of the European Parliament and of the Council
 (
*11
)
;
(112)
“financial conglomerate” means a financial conglomerate as defined in Article 2, point (14), of Directive 2002/87/EC of the European Parliament and of the Council
 (
*12
)
;
(
*10
)
  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
)."
(
*11
)
  Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (
OJ L 335, 17.12.2009, p. 1
)."
(
*12
)
  Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC, and Directives 98/78/EC and 2000/12/EC of the European Parliament and of the Council (
OJ L 35, 11.2.2003, p. 1
).’;"
(2)
in Article 7(3), the following point is added:
‘(e)
where the group as a whole is, or any institution within the group is part of, a financial conglomerate, the insurance resolution authority and the insurance supervisory authority concerned.’
;
(3)
in Article 14, the following paragraph is added:
‘3.   Where the institution or entity or group is or is part of a financial conglomerate, the resolution authority or the group-level resolution authority shall also transmit the resolution plans or group resolution plans to the insurance resolution authority and the insurance supervisory authority concerned.’
;
(4)
in Article 81(3), the following point is added:
‘(l)
where the institution or entity is part of a financial conglomerate, the insurance supervisory authorities and insurance resolution authorities concerned.’
;
(5)
in Article 83(2), the following point is added:
‘(l)
where the institution under resolution is part of a financial conglomerate, the insurance supervisory authorities and insurance resolution authorities concerned.’
;
(6)
in Article 84(1) the following point is added:
‘(n)
insurance supervisory authorities and insurance resolution authorities informed or notified on the basis of this chapter.’
;
(7)
in Article 88, the following paragraph is inserted:
‘3a.   Where the institution or entity or group is or is part of a financial conglomerate, the insurance resolution authorities concerned shall be invited to participate in the resolution college as observers, provided that those authorities are subject to confidentiality requirements equivalent, in the opinion of the group-level resolution authority, to those established by Article 90.’.
Article 91
Amendment to Directive (EU) 2017/1132
Directive (EU) 2017/1132 is amended as follows:
(1)
in Article 84, paragraph 3 is replaced by the following:
‘3.   Member States shall ensure that Article 49, Article 58(1), Article 68(1), (2) and (3), the first subparagraph of Article 70(2), and Articles 72 to 75, 79, 80 and 81 of this Directive do not apply in the case of application of the resolution tools, powers and mechanisms provided for in Title IV of Directive 2014/59/EU of the European Parliament and of the Council
 (
*13
)
, in Title V of Regulation (EU) 2021/23 of the European Parliament and of the Council
 (
*14
)
 or in Title III of Directive (EU) 2025/1 of the European Parliament and of the Council
 (
*15
)
.
(
*13
)
  Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council (
OJ L 173, 12.6.2014, p. 190
)."
(
*14
)
  Regulation (EU) 2021/23 of the European Parliament and of the Council of 16 December 2020 on a framework for the recovery and resolution of central counterparties and amending Regulations (EU) No 1095/2010, (EU) No 648/2012, (EU) No 600/2014, (EU) No 806/2014 and (EU) 2015/2365 and Directives 2002/47/EC, 2004/25/EC, 2007/36/EC, 2014/59/EU and (EU) 2017/1132 (
OJ L 22, 22.1.2021, p. 1
)."
(
*15
)
  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
).’;"
(2)
Article 86a is amended as follows:
(a)
in paragraph 3, point (b) is replaced by the following:
‘(b)
the company is subject to resolution tools, powers and mechanisms provided for in Title IV of Directive 2014/59/EU, in Title V of Regulation (EU) 2021/23 or in Title III of Directive (EU) 2025/1.’
;
(b)
in paragraph 4, point (c) is replaced by the following:
‘(c)
the subject of crisis prevention measures as defined in Article 2(1), point (101), of Directive 2014/59/EU, in Article 2, point (48), of Regulation (EU) 2021/23 or Article 2, point (79), of Directive (EU) 2025/1.’
;
(3)
in Article 87, paragraph 4 is replaced by the following:
‘4.   Member States shall ensure that this Chapter does not apply to companies which are the subject of the application of resolution tools, powers and mechanisms provided for in Title IV of Directive 2014/59/EU, in Title V of Regulation (EU) 2021/23 or in Title III of Directive (EU) 2025/1.’
;
(4)
Article 120 is amended as follows:
(a)
in paragraph 4, point (b) is replaced by the following:
‘(b)
the company is subject to resolution tools, powers and mechanisms provided for in Title IV of Directive 2014/59/EU, in Title V of Regulation (EU) 2021/23 or in Title III of Directive (EU) 2025/1.’
;
(b)
in paragraph 5, point (c) is replaced by the following:
‘(c)
the subject of crisis prevention measures as defined in Article 2(1), point (101), of Directive 2014/59/EU, in Article 2, point (48), of Regulation (EU) 2021/23 or in Article 2, point (79), of Directive (EU) 2025/1.’
;
(5)
Article 160a is amended as follows:
(a)
in paragraph 4, point (b) is replaced by the following:
‘(b)
the company is subject to resolution tools, powers and mechanisms provided for in Title IV of Directive 2014/59/EU, in Title V of Regulation (EU) 2021/23 or in Title III of Directive (EU) 2025/1.’
;
(b)
in paragraph 5, point (c) is replaced by the following:
‘(c)
the subject of crisis prevention measures as defined in Article 2(1), point (101), of Directive 2014/59/EU, in Article 2, point (48), of Regulation (EU) 2021/23 or in Article 2, point (79), of Directive (EU) 2025/1.’.
Article 92
Amendment to Regulation (EU) No 1094/2010
Regulation (EU) No 1094/2010 is amended as follows:
(1)
in Article 4, point (2), point (i) is replaced by the following:
‘(i)
supervisory authorities as defined in Article 13, point (10), of Directive 2009/138/EC, resolution authorities as defined in Article 2, point (12), of Directive (EU) 2025/1 of the European Parliament and of the Council
 (
*16
)
, and competent authorities as defined in Article 6, point (8), of Directive (EU) 2016/2341 of the European Parliament and of the Council
 (
*17
)
 and as referred to in Directive (EU) 2016/97 of the European Parliament and of the Council
 (
*18
)
;
(
*16
)
  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
)."
(
*17
)
  Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (IORPs) (
OJ L 354, 23.12.2016, p. 37
)."
(
*18
)
  Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (
OJ L 26, 2.2.2016, p. 19
).’;"
2)
in Article 40(6), the following subparagraph is added:
‘For the purpose of acting within the scope of Directive (EU) 2025/1, the member of the Board of Supervisors referred to in paragraph 1, point (b), may, where appropriate, be accompanied by a representative from the resolution authority in each Member State, who shall be non-voting.’.
Article 93
Amendment to Regulation (EU) No 648/2012
In Article 81(3), first subparagraph, of Regulation (EU) No 648/2012, the following point is added:
‘(s)
the resolution authorities designated under Article 3 of Directive (EU) 2025/1 of the European Parliament and of the Council
 (
*19
)
.
Article 94
Amendment to Regulation (EU) No 806/2014
In Article 88 of Regulation (EU) No 806/2014, paragraph 6 is replaced by the following:
‘6.   This Article shall not prevent the Board, the Council, the Commission, the ECB, the national resolution authorities or the national competent authorities, including their employees and experts, from sharing information with each other and with competent ministries, central banks, deposit guarantee schemes, investor compensation schemes, authorities responsible for normal insolvency proceedings, insurance resolution authorities, insurance supervisory authorities, resolution and competent authorities from non-participating Member States, EBA, or, subject to Article 33 of this Regulation, third-country authorities that carry out functions equivalent to those of a resolution authority, or, subject to strict confidentiality requirements, with a potential purchaser for the purposes of planning or carrying out a resolution action.’.
Article 95
Amendment to Regulation (EU) 2017/1129
In Article 1(5) of Regulation (EU) 2017/1129, point (c) is replaced by the following:
‘(c)
securities resulting from the conversion or exchange of other securities, own funds, or eligible liabilities by a resolution authority due to the exercise of a power referred to in Article 53(2), Article 59(2) or Article 63(1) or (2) of Directive 2014/59/EU or the exercise of a power referred to in Article 39(2) or Article 42(1) or (2) of Directive (EU) 2025/1 of the European Parliament and of the Council
 (
*20
)
;
TITLE VIII
FINAL PROVISIONS
Article 96
EIOPA Resolution Committee
1.   EIOPA shall create a permanent internal committee pursuant to Article 41 of Regulation (EU) No 1094/2010 to prepare EIOPA decisions as referred to in Article 44 of that Regulation, including decisions about draft regulatory technical standards and draft implementing technical standards concerning tasks that have been conferred on resolution authorities in accordance with this Directive. That internal committee shall be composed of the resolution authorities referred to in Article 3 of this Directive.
2.   For the purposes of this Directive, EIOPA shall cooperate with EBA and ESMA within the framework of the Joint Committee of the European Supervisory Authorities established in Article 54 of Regulation (EU) No 1093/2010, of Regulation (EU) No 1094/2010 and of Regulation (EU) No 1095/2010.
3.   For the purposes of this Directive, EIOPA shall ensure structural separation between the resolution committee and other functions referred to in Regulation (EU) No 1094/2010. The resolution committee shall promote the development and coordination of resolution plans and develop methods for the resolution of entities as referred to in Article 1(1) of this Directive that are failing.
Article 97
Cooperation with EIOPA
1.   Member States shall ensure that the supervisory and resolution authorities cooperate with EIOPA for the purposes of this Directive in accordance with Regulation (EU) No 1094/2010.
2.   Member States shall ensure that the supervisory and resolution authorities, without delay, provide EIOPA with all the information necessary to carry out its duties in accordance with Article 35 of Regulation (EU) No 1094/2010.
Article 98
Insurance guarantee schemes
By 29 January 2027, the Commission, after having consulted EIOPA, shall submit a report to the European Parliament and to the Council assessing the appropriateness of minimum common standards for insurance guarantee schemes within the Union. That report shall at least:
(a)
assess the state of play of insurance guarantee schemes in Member States (coverage level, types of insurance covered, triggers);
(b)
discuss policy options, including the different policy options such as using insurance guarantee schemes to continue or to liquidate insurance policies, thereby taking due account of the differences in insurance products in various Member States;
(c)
assess the necessity of introducing and, where appropriate, outline the steps necessary to introduce a minimum baseline for insurance guarantee schemes across the Union.
The report shall be accompanied by a legislative proposal where appropriate.
Article 99
Review
By 29 January 2030, the Commission, after having consulted EIOPA, shall submit a report to the European Parliament and to the Council on the application of this Directive. The report shall in particular:
(a)
evaluate whether, and to what extent, the objectives of this Directive have been achieved with regard to the functioning of the internal market and the strengthening of the financial system in the Union in the light of market and economic developments;
(b)
assess the state of play of resolution financing arrangements;
(c)
assess the necessity of introducing, and, where appropriate, outline the steps necessary to introduce, minimum harmonised definitions on the level of covered policies and eligible claimants and policies;
(d)
analyse the experience of information sharing between authorities competent for the supervision or resolution of insurance and reinsurance undertakings and credit institutions in cases where the entity referred to in Article 1(1), points (a) to (e), is part of a financial conglomerate;
(e)
assess the feasibility of and the preconditions for allowing financial conglomerates to draft single group (pre-emptive) recovery plans for the entire conglomerate as well as for resolution authorities to draft single group resolution plans for the entire financial conglomerate;
(f)
analyse the merits of a further harmonisation of the crisis management framework for insurance and reinsurance undertakings.
The report shall be accompanied by a legislative proposal where appropriate.
Article 100
Transposition
1.   By 29 January 2027, Member States shall adopt and publish the measures necessary to comply with Articles 1 to 91, 96 and 97 of this Directive. They shall immediately inform the Commission thereof.
They shall apply those measures from 30 January 2027.
When Member States adopt those measures, they shall include a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.
2.   Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.
Article 101
Entry into force and application
1.   This Directive shall enter into force on the twentieth day following that of its publication in the 
Official Journal of the European Union
.
2.   Articles 92 to 95 shall apply from 30 January 2027.
Article 102
Addressees
This Directive is addressed to the Member States.
Done at Strasbourg, 27 November 2024.
For the European Parliament
The President
R. METSOLA
For the Council
The President
BÓKA J.
(
1
)
  
            
OJ C 275, 18.7.2022, p. 45
.
(
2
)
  Position of the European Parliament of 23 April 2024 (not yet published in the Official Journal) and decision of the Council of 5 November 2024.
(
3
)
  Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (
OJ L 335, 17.12.2009, p. 1
).
(
4
)
  Directive 2009/103/EC of the European Parliament and of the Council of 16 September 2009 relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to insure against such liability (
OJ L 263, 7.10.2009, p. 11
).
(
5
)
  Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC, and Directives 98/78/EC and 2000/12/EC of the European Parliament and of the Council (
OJ L 35, 11.2.2003, p. 1
).
(
6
)
  Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (
OJ L 331, 15.12.2010, p. 48
).
(
7
)
  Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (
OJ L 173, 12.6.2014, p. 1
).
(
8
)
  Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems (
OJ L 166, 11.6.1998, p. 45
).
(
9
)
  Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids, (
OJ L 142, 30.4.2004, p. 12
).
(
10
)
  Directive 2007/36/EC of the European Parliament and of the Council of 11 July 2007 on the exercise of certain rights of shareholders in listed companies (
OJ L 184, 14.7.2007, p. 17
).
(
11
)
  Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law (
OJ L 169, 30.6.2017, p. 46
).
(
12
)
  Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council (
OJ L 173, 12.6.2014, p. 190
).
(
13
)
  Regulation (EU) 2021/23 of the European Parliament and of the Council of 16 December 2020 on a framework for the recovery and resolution of central counterparties and amending Regulations (EU) No 1095/2010, (EU) No 648/2012, (EU) No 600/2014, (EU) No 806/2014 and (EU) 2015/2365 and Directives 2002/47/EC, 2004/25/EC, 2007/36/EC, 2014/59/EU and (EU) 2017/1132 (
OJ L 22, 22.1.2021, p. 1
).
(
14
)
  Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (
OJ L 201, 27.7.2012, p. 1
).
(
15
)
  Directive 2002/47/EC of the European Parliament and of the Council of 6 June 2002 on financial collateral arrangements (
OJ L 168, 27.6.2002, p. 43
).
(
16
)
  Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (
OJ L 173, 12.6.2014, p. 349
).
(
17
)
  Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012 (
OJ L 176, 27.6.2013, p. 1
).
(
18
)
  Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (
OJ L 12, 17.1.2015, p. 1
).
(
19
)
  Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses (
OJ L 82, 22.3.2001, p. 16
).
(
20
)
  Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (
OJ L 331, 15.12.2010, p. 84
).
(
21
)
  Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (
OJ L 168, 30.6.2017, p. 12
).
(
22
)
  Directive 2001/34/EC of the European Parliament and of the Council of 28 May 2001 on the admission of securities to official stock exchange listing and on information to be published on those securities (
OJ L 184, 6.7.2001, p. 1
).
(
23
)
  Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) (
OJ L 177, 4.7.2008, p. 6
).
(
24
)
  Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (
OJ L 176, 27.6.2013, p. 338
).
(
25
)
  Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (
OJ L 390, 31.12.2004, p. 38
).
(
26
)
  Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (
OJ L 166, 30.4.2004, p. 1
).
ANNEX
Resolvability dimensions
When performing the resolvability assessment, resolution authorities and group-level resolution authorities shall, taking to account the undertaking nature, scale and complexity, examine the following dimensions:
1.
Operational continuity
(a)
the extent to which all relevant internal and external, financial and operational interdependencies have been identified by reference to all relevant services, roles, including staff, and mapped to legal entities, critical functions, core business lines and related contractual arrangements;
(b)
the extent to which adequate operational arrangements are in place to ensure the continuity of relevant services that are necessary for preserving critical functions, and the core business lines necessary for the effective implementation of the resolution action and any consequent restructuring, in particular by facilitating possible transfers of assets, rights or liabilities, roles and staff;
(c)
the extent to which risks to operational continuity in resolution have been comprehensively assessed, including qualitative and quantitative information that allows to identify the criticality of relevant services, including the impact of interruption or discontinuance of relevant services in resolution and their substitutability;
(d)
the extent to which risks to operational continuity have been effectively mitigated and the presence of measures to improve preparedness for resolution, including with regards to the enforcement of continuity arrangements with external third-party providers of relevant services;
2.
Access to financial market infrastructures
The extent to which undertakings or groups have established the processes and arrangements necessary to maintain access, ahead of, during and after resolution, to financial market infrastructures and to payment, clearing, settlement and custody services provided by intermediaries.
3.
Separability
(a)
the extent to which undertakings or groups have identified, reduced and, where necessary, removed sources of undue complexity in their structure and information systems, which pose a risk to the implementation of the resolution action, in particular with the objective of facilitating the separation and transfer of critical functions and core business lines;
(b)
the extent to which a transferee or purchaser are available for the undertaking’s portfolio or business;
4.
Loss-absorption and recapitalisation capacity
(a)
the extent to which a loss-absorption and recapitalisation capacity exists and the assessment whether such capacity is sufficient for the implementation of the resolution plan, including the availability of any insurance guarantee schemes or financing arrangements and the credibility that the holder of loss-absorbing capacity will be able to absorb losses;
(b)
the extent to which adequate arrangements exist to ensure the cross-border recognition and effectiveness of resolution actions;
(c)
the extent to which adequate governance arrangements, internal processes and management information systems exist to support the operational execution of the write-down or conversion, including to support the transfer of portfolios;
5.
Liquidity and funding in resolution
(a)
the extent to which the business model of the undertaking or of the group may give rise to liquidity needs in resolution;
(b)
the extent to which processes and capabilities to (i) estimate the liquidity and funding needs for the implementation of the resolution strategy; (ii) measure and report the liquidity position in resolution; and (iii) identify and mobilise available collateral exist and can be used to obtain funding during and after resolution.
6.
Information systems and data requirements
The extent to which undertakings or groups have in place adequate management information systems, valuation capabilities and technological infrastructure to provide the information necessary for (i) the development and maintenance of resolution plans; (ii) the execution of a fair, prudent and realistic valuation; and (iii) the effective application of resolution actions, also under rapidly changing conditions.
7.
Communication
The extent to which undertakings or groups have in place communication plans to ensure timely, robust and consistent communication to relevant stakeholders, and to support the implementation of the resolution action, as well as governance arrangements to ensure an effective execution of these plans.
8.
Governance
The extent to which robust governance processes exist that facilitate the preparation as well as the implementation of the resolution action, including (i) a timely and accurate provision of relevant information on a regular and ad hoc basis; (ii) effective oversight during resolution planning and in crisis; and (iii) efficient decision-making at the time of resolution.
9.
Credibility and impact
(a)
the extent to which the resolution action meets the resolution objectives and is credible, including the evaluation of likely impacts on policy holder, creditors, counterparties, and employees;
(b)
the extent to which the impact of the undertaking’s or group’s resolution on the real economy or financial stability can be adequately evaluated and contagion be contained, taking into account possible actions that third-country authorities may take;
(c)
the extent to which any arrangements and means exist that could facilitate resolution in the cases of groups that have subsidiary undertakings established in different jurisdictions.
ELI: http://data.europa.eu/eli/dir/2025/1/oj
ISSN 1977-0677 (electronic edition)

Summary:
Insurance recovery and resolution framework
SUMMARY OF:
Directive (EU) 2025/1 on the recovery and resolution of insurance and reinsurance undertakings
WHAT IS THE AIM OF THE DIRECTIVE?
Directive (EU) 2025/1 sets up a harmonised 
European Union
 (EU) framework for the recovery and resolution of insurance and reinsurance undertakings, protecting policyholders and financial stability while limiting public financial support.
KEY POINTS
Scope and proportionality
The 
directive
 applies to:
insurance
 and 
reinsurance undertakings
 authorised under the 
Solvency II
 Directive (see 
summary
), except those already exempted as small undertakings;
insurance holding companies
 and 
mixed financial holding companies
;
EU branches of non-EU-country insurance and reinsurance undertakings
.
Measures may also extend to essential service providers, where necessary, to ensure continuity of provision of essential goods and services to the undertaking under resolution.
EU 
Member States
 may adopt stricter or additional rules consistent with the directive.
Pre-emptive recovery planning
Supervisory authorities select undertakings on the basis of predefined criteria, and those undertakings must prepare 
pre-emptive
 
recovery plans
 to restore financial soundness under stress.
At least 60 % of a Member State’s life
 and 
non-life markets
, 
respectively
, must be subject to pre-emptive recovery planning.
Resolution planning
Each Member State designates a resolution authority.
Resolution authorities select undertakings on the basis of predefined criteria for which they need to prepare resolution plans.
At least 40 % of a Member State’s life
 and 
non-life markets
, 
respectively
, must be subject to resolution planning.
Plans identify critical functions, resolution strategies and measures to address obstacles to resolvability.
Resolution authorities carry out resolvability assessments and have the power to require proportionate measures to remove or reduce obstacles to resolution, where necessary.
Conditions and objectives of resolution
Resolution may be applied only when:
the undertaking is failing or likely to fail;
no private or supervisory action can prevent it; and
resolution is required in the public interest.
Its objectives are to:
protect policyholders, beneficiaries and claimants;
ensure continuity of critical functions;
preserve financial stability; and
minimise recourse to public financial support.
Losses are borne first by shareholders and then by creditors, with equal treatment within each class.
The 
no creditor worse off (NCWO) principle
 ensures no shareholder, creditor or policy holder is worse off in resolution than in insolvency.
Resolution tools and financing
Resolution measures must rely on fair and prudent valuations of assets and liabilities.
Resolution authorities may use the following tools:
solvent run-off 
– a supervised winding down of the business;
sale of business 
– the transfer of shares, assets or liabilities to another company;
bridge undertaking 
– a temporary entity created to maintain operations until a buyer is found;
asset-and-liability separation 
– the transfer of assets and liabilities to a special vehicle to preserve value;
write-down or conversion of liabilities 
– the reduction or conversion of certain liabilities to absorb losses.
Resolution authorities may temporarily suspend payments or contract termination to support resolution.
Each Member State may set up financing arrangements funded by insurers and reinsurers to cover at least payments under the NCWO principle.
Cooperation, review and amendments
National authorities
 must cooperate with each other and with the 
European Insurance and Occupational Pensions Authority
 
(EIOPA)
.
The authority coordinates through a 
Resolution Committee
 and maintains a 
central database
 and 
single access point
 for national measures.
By 
29 January 2027
, the 
European Commission
 must report on the possible creation of an EU framework for insurance guarantee schemes; then, by 
29 January 2030
, it must evaluate the functioning of the directive.
The directive amends Directives 
2002/47/EC
, 
2004/25/EC
, 
2007/36/EC
, 
2014/59/EU
 and (EU) 
2017/1132
, Regulations (EU) 
No 
1094/2010
, 
No 
648/2012
 and 
No 
806/2014
 and Regulation (EU) 
2017/1129
.
FROM WHEN DO THE RULES APPLY?
The directive has to be 
transposed
 into national law by 
29 January 2027
. The rules will apply from 
30 January 2027
.
BACKGROUND
For further information, see:
Solvency II and IRRD: Council signs off new rules for the insurance sector
 (Council of the European Union).
MAIN DOCUMENT
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
).
RELATED DOCUMENTS
Directive (EU) 
2017/1132
 relating to certain aspects of company law.
Successive amendments to Directive (EU) 2017/1132 have been incorporated into the original text. This 
consolidated version
 is of documentary value only.
Regulation (EU) 
2017/1129
 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market.
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.
Regulation (EU) 
No 
806/2014
 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund (SRM regulation).
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.
Directive 
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 establishing a framework for the recovery and resolution of credit institutions and investment firms (BRRD).
See 
consolidated version
.
Regulation (EU) 
No 
648/2012
 on OTC derivatives, central counterparties and trade repositories (EMIR).
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consolidated version
.
Regulation (EU) 
No 
1094/2010
 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority (EIOPA)).
See 
consolidated version
.
Directive 
2009/138/EC
 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II).
See 
consolidated version
.
Directive 
2007/36/EC
 on the exercise of certain rights of shareholders in listed companies.
See 
consolidated version
.
Directive 
2004/25/EC
 on takeover bids.
See 
consolidated version
.
Directive 
2002/47/EC
 on financial collateral arrangements (Financial Collateral Directive (FCD)).
See 
consolidated version
.
last update 
26.1.2026

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