Public Consultation on the transposition of the (EU) Insurance Recovery and Resolution Directive

The Department of Finance invites interested parties to make submissions in relation to the transposition of the Insurance Recovery and Resolution Directive (EU) 2025/1 (“IRRD”). This legislation aims to establish harmonised recovery and resolution tools and procedures, to ensure that insurers and relevant authorities in the European Union are better prepared for situations of significant financial distress and to facilitate the early and quick intervention of the authorities, especially in cross-border contexts.

The IRRD entered into force on 28 January 2025 and is required to be transposed into Irish law by 28 January 2027. The IRRD establishes a framework for the recovery and resolution of insurance and reinsurance undertakings established in the EU.

It aims to ensure that (re)insurers and relevant authorities in the EU are better prepared in cases of significant financial distress, so that intervention can occur sufficiently early and quickly in a crisis situation.

The Directive’s key objectives are to:

• Protect policyholders, beneficiaries, and claimants;
• Maintain financial stability;
• Ensure the continuity of the (re)insurer’s critical functions; and
• Protect public funds by minimising reliance on extraordinary public financial support.

The IRRD provides National Resolution Authorities with an array of resolution tools that can be used in the event of a failure. This ‘toolbox approach’ allows the National Resolution Authority to exercise discretion in deciding which approach to resolution is most suitable in each specific circumstance.

In order to transpose this Directive, Member States are required to establish a financial arrangement to ensure that the national resolution authority (NRA) has at its disposal adequate funding, in line with the ‘No Creditor Worse Off’ principle; and for the use of resolution tools. Ireland has the discretion to decide whether such a funding mechanism utilises ex-ante or ex-post contributions (or a hybrid of these approaches) and whether other costs associated with resolution can be covered under such a funding regime.

The Department of Finance now invites interested parties to make submissions in relation to the transposition of the IRRD, specifically the Member State discretions included in the Directive.

Submissions received in response to this public consultation will be taken into consideration when drafting the proposed regulations.

As the consultation period falls around Summer holiday periods, the public consultation will run for an extended period of 8 weeks, until 5 September 2025. Submissions received after this deadline may not be considered.

The preferred means of response is by email to:
insurance@finance.gov.ie
Alternatively, you may respond by post to the postal address mentioned in the Public Consultation paper.
Please include contact details in your response.
When responding, please indicate whether you are contributing to the consultation process as a professional adviser, representative body, business representative, or member of the public.

Responses to this consultation are subject to the provisions of the Freedom of Information Act 2014. Parties should also note that responses to the consultation may be published on the Department’s website.