On 19 May 2022, the Dutch Minister of Finance (the Minister) published for public consultation a draft legislative proposal of the Amendment Act on the recovery and resolution of insurers (Wijzigingswet herstel en afwikkeling van verzekeraars, the Amendment Act). As also indicated in the legislative letter of the Dutch Central Bank (De Nederlandsche Bank, DNB) for 2022, there are a number of omissions in the resolution framework for insurers. This framework is based on the resolution framework for banks. The omissions in the framework for banks have recently been repaired as a result of the implementation of the revised Bank Recovery and Resolution Directive (BRRD II). With the Amendment Act, the Minister intends to repair these omissions in the framework for insurers as well.
In the explanatory memorandum to the Amendment Act, the Minister notes that the European Commission (EC) recently published the proposal for the Insurance Recovery and Resolution Directive (IRRD), which provides for a European framework on the recovery and resolution of insurers. However, the Minister has decided not to wait until the proposed IRRD is finalised. The Minister has, however, ensured that the Amendment Act is aligned with the IRRD as much as possible.
The Amendment Act repairs a number of omissions in the resolution framework for insurers. In particular, the Amendment Act introduces the possibility for DNB to dismiss the management board of the insurer and to appoint a special director or to take control of the insurer itself. In addition, the Amendment Act provides that the Dutch Authority for Financial Markets can suspend, interrupt or exclude the admission to trading on a regulated market or the official listing of a financial instrument at the request of DNB. This can be done if, in the opinion of DNB, it is appropriate in light of the resolution.
Furthermore, the Amendment Act determines that the resolution decision of DNB can be appealed directly to the Trade and Industry Appeals Tribunal (College van Beroep voor het bedrijfsleven). This ensures an expedited judgement on the legality of this decision, which is desirable given the protection of policyholders and the stability of the financial system.
The consultation and the draft Amendment Act are available here (Dutch only). The consultation period ends on 16 June 2022.