In a speech to the Pan-European Conglomerates Club, the Single Resolution Board (SRB) advocated separate but complementary bank and insurer resolution frameworks, with strategies tailored to each conglomerate and cooperation between authorities. The Insurance Recovery and Resolution Directive (IRRD) enters into full application on Jan. 30, 2027. The speech emphasized that banks generally require rapid stabilization and recapitalization, while insurers’ longer liability horizons allow approaches such as portfolio transfers and solvent run-off. The IRRD also imposes no equivalent to banks’ requirements for loss absorption capacity.
The SRB handles resolution planning for 27 banking groups that qualify as financial conglomerates. Their operational, financial and legal interdependencies influence which resolution tools are appropriate, but failure of one business does not automatically require resolution of the entire group. Where banking and insurance activities are closely integrated, transferring the resolution entity’s shares may be preferable to selling assets that are difficult to separate. The SRB is also exploring combinations of tools, including selling insurance activities to narrow the resolution perimeter and generate liquidity before executing a bail-in.
The emphasis on cooperation reiterates the SRB’s earlier call for joint crisis preparedness across banks, insurers and central counterparties. Possible arrangements include information sharing and observer participation in each other’s resolution colleges, particularly to prepare for disruptions affecting both banking and insurance operations. The speech expressed skepticism about a single group resolution strategy combining both frameworks, citing different valuation approaches and the contrast between centralized bank resolution in the Banking Union and national insurance resolution arrangements. Member states should have designated their insurance resolution authorities by the IRRD’s full application date.