Press Release: Financial Services: Commission welcomes political agreement on the winding up of insurance institutions

The Commission welcomed the political agreement reached by the Council of Ministers on 25.5.00 on a common position for the proposed Directive on the Reorganisation and Compulsory Winding Up of Insurance Institutions. The proposed Directive is an important element for the completion of a single legal framework for insurance in the Internal Market and the importance of its implementation was reiterated at the Lisbon Summit. Currently, if an insurance undertaking with branches across Europe has to be wound up and its assets divided among its creditors, the authorities in each Member State where the undertaking is represented can open separate insolvency proceedings which will be run according to local legislation. This can lead to conflicts of jurisdiction and means that creditors are not equally treated. The proposal also ensures protection of insurance creditors (policyholders, insured persons, etc.) by granting them a preferential treatment in case of winding up of an insurance undertaking. While winding up proceedings are, hopefully, rare, the Commission proposal is designed to guarantee consumer protection in such instances.

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