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08 October 2021

EIOPA: Failures and near misses in insurance

Overview of recovery and resolution actions and cross-border issues

The report aims at enhancing super­visory knowledge on the prevention and management of insurance failures, based on the information contained in the EIOPA data­base, which comprises a sample of 219 affected insurance undertakings in 31 European countries, dating back from 1999 to 2020.

The present paper strives to provide a better understanding of the kind of actions that are taken by
insurers and NCAs when the companies are entering into two specific stages of the crisis
management flow:
i. The recovery phase (going-concern basis). This covers measures taken before the breach of
the capital requirements (more specifically known as preventive measures) and measures
taken after the breach of the capital requirements.
ii. The resolution phase (gone-concern basis). This phase refers to actions that taken by the
authorities in charge of the resolution and/or liquidation process.

A number of additional issues such as potential policyholders’ loss, external funding and cross-
border aspects featuring insurers’ failures and near misses are also studied here.
EIOPA commenced in 2014 to create a dynamic database of insurance failures and near misses. The
objective was to gather relevant information from national competent authorities (NCAs) on
relevant cases of insurance failures and near misses occurred in the European Economic Area
(EEA),2 by means of gathering valuable information on the causes and early identification of
insurance failures or near misses, as well as gauging their impact and the supervisory actions taken.

Full paper



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