European insurance guarantee schemes

A common insurance guarantee
scheme is not necessary
– existing national solutions are enough

  • There is no need for EU-wide arrangements regarding insolvent insurers. 
  • The Finnish insurance guarantee schemes cover statutory lines of insurance well. Consumers’ receivables are also protected with priority rules. 
  • Solvency II, insurers’ EU-level regulatory regime, already prevents bankruptcies quite effectively. 

Insurance guarantee schemes (IGS) provide last-resort protection to consumers when insurance companies are unable to fulfil their contractual commitments. Other companies party to the scheme share the liability by paying compensation to policyholders or beneficiaries, or by securing the continuation of insurance contracts.

IGSs at member state level currently vary significantly across EU countries. To address this issue, EU-level legislative proposals have been envisaged that would require every member state to set up an IGS that allows cross-border coordination if necessary. Some plans have even envisaged a so-called mutual bailout system. This system would require all national IGS in other member states to support the scheme of another member state lacking sufficient funds to perform its duties.

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