On 14 April 2022, the Dutch Central Bank (De Nederlandsche Bank, DNB) published its annual legislative letter (wetgevingsbrief) for 2022. DNB annually submits this letter to the Dutch Minister of Finance (the Minister). The letter describes European and national developments relevant to the supervision on the financial sector and the legislative changes desired by DNB to address bottlenecks in Dutch legislation. The Minister published the response to this letter, which describes the intentions and actions undertaken by the Minister to address the issues raised by DNB.
In the letter, DNB addresses three legislative requests to improve the legal framework for its supervision and the resolution of financial institutions.
- Strengthen the supervision framework for branch office of third country insurers
DNB requests the Minister to strengthen its supervisory powers with regard to the supervision of Dutch branch offices of third country insurers. DNB would appreciate supplemental conditions for authorisation and ongoing supervision to ensure that the assets of these branches are available to Dutch policyholders, by requiring:
- that the assets must be held in the Netherlands;
- that DNB can verify the availability of these assets; and
- by expanding the reporting obligations of the branch offices.
In addition, DNB requests the Minister to examine how Dutch policyholders can be better protected in case of insolvency of the branch office or the third-country insurer. The Minister recognises the importance of the protection of Dutch policyholders and states that the proposal is feasible and practicable. The consultation with DNB will be continued.
- Implement Member State option Directive on Deposit Guarantee Schemes
DNB requests the Minister to implement the Member State option of Article 11 (6) of the Directive on Deposit Guarantee Schemes (Directive 2014/49/EU, the Directive). This Member State option provides that Member States may decide that the funds in the Deposit Guarantee Scheme can also be used to finance measures to preserve the access of depositors to covered deposits in the context of national insolvency proceedings. Currently, this is only possible for banks that are in a resolution procedure, but not in case of insolvency of a bank.
DNB request the Minister to implement this in the short term and not to await the proposed revision of the Directive. However, the Minister notes that she does not want to interfere the revision procedure initiated by the European Commission. If at a later point in this procedure, it appears that the implementation of this option does not interfere with this procedure, the Minister will reconsider.
- Strengthen resolution framework for insurers
The implementation of the revised Bank Recovery and Resolution Directive (Directive 2019/879, BRRD II) repairs a number of omissions in the resolution framework for banks. The resolution framework for insurers is based on this framework for banks, but the omissions in the framework for insurers have not been repaired yet. DNB now requests the Minister to remove these inconsistencies. The Minister acknowledges this point and indicates that a proposal for an Amendment Act on the Resolution of Insurers (Wijzigingswet herstel en afwikkeling verzekeraars) will be introduced in the near future.
