In June 2016, the FSB issued supplementary guidance on the development of effective resolution strategies and plans for systemically important insurers. In November 2019, the IAIS adopted the Insurance Core Principles for all insurance and reinsurance companies, a common framework for insurance groups with international operations detailing standards for preventive resolution planning.
https://www.iaisweb.org/uploads/2022/01/191115-IAIS-ICPs-and-ComFrame-adopted-in-November-2019.pdf
The IRRD provides for the preparation of pre-emptive recovery plans and resolution plans.
While the creation of pre-emptive recovery plans will be the domain of insurance market entities, the creation of resolution plans will be the responsibility of resolution authorities in individual countries. In the case of Poland, this will be the BFG.
A resolution plan is created for an insurer that is subject to the planning obligation regardless of its current financial position.
Resolution plans should include:
- a summary of the main elements of the plan
- a summary of significant changes to the entity that have occurred since the last resolution information was submitted
- an indication of how critical functions and core business lines can be legally and economically separated to the extent necessary to ensure their continuity with the insolvency of the entity
- identification of assets that could serve as collateral
- a projected timetable for implementation of each material aspect of the plan
- a detailed description of the assessment of the feasibility of an effective resolution
- a description of any measures required to reduce or remove impediments to resolvability
- an explanation of how resolution options can be financed without assuming any extraordinary public financial support other than the use, where available, of the IGS or any funding mechanisms
- a detailed description of the different resolution strategies that could be used for different possible scenarios and applicable timelines
- description of critical interdependencies
- an analysis of the impact of the resolution plan on the entity’s employees, including an assessment of any costs involved, and a description of the procedures envisaged for consulting employees during the resolution process, considering where appropriate, national systems for dialogue with social partners
- a plan for communication with the media and the general public
- a description of the essential operations and systems necessary to ensure the continuity of the entity’s operational processes
- where applicable, any views expressed by the entity in relation to the resolution plan.
