1. Department of Finance launches public consultation on transposition of IRRD
On 14 July 2025, the Department of Finance ("Department") launched a public consultation ("Consultation") on the transposition of the Insurance Recovery and Resolution Directive ("IRRD").
The IRRD entered into force on 28 January 2025 and is required to be transposed into Irish law by 28 January 2027.
The IRRD brings insurance and reinsurance undertakings within scope for recovery and resolution planning in a proportionate and risk-based manner and gives national resolution authorities preventive powers to intervene at an early stage of a potential failure, allowing them to implement resolution actions in a coordinated and timely fashion.
Objective of Consultation
The Consultation aims to:
- provide an overview of IRRD;
- set out the provisions of IRDD where member states have a discretion;
- outline the financing arrangements required under IRRD and the proposals for their transposition into Irish law; and
- gather the views of relevant stakeholders on IRRD, particularly as regards its transposition into Irish law.
Central Bank
The Consultation sets out that the Central Bank of Ireland ("Central Bank") will be designated as the national resolution authority under the Irish transposing legislation.
Member State Discretions
The Consultation focuses on member state discretions ("Discretions") in section 3 and sets out that the Department has identified several Discretions in IRRD.
The Consultation seeks feedback on the following Discretions:
- Whether to adopt or maintain rules that are stricter or additional to those laid down in IRRD and in the related delegated and implementing acts, subject to a review of the recovery-planning requirements for the insurance industry under section 48 of Central Bank (Supervision and Enforcement) Act 2013 pursuant to the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Recovery Plan Requirements for Insurers) Regulations 2021 ("2021 Regulations"). The Consultation states that the Minister for Finance ("Minister") is not minded to adopt or maintain stricter or additional rules.
- Article 26(7) of IRRD permits member states togive additional powers and tools to national resolution authoritiesunder certain circumstances. The Minister has asked the Central Bank to consider whether it should be given such additional tools / powers and the Consultation sets out a proposed list of such powers / tools. The Consultation seeks feedback on this approach.
- As regards transfers to insurance guarantee schemes under article 34(1) of IRRD, the Consultation sets out that the Minister's initial view is that Ireland can already fulfil the objectives of such bridge undertaking, as envisaged in IRRD, by virtue of the Insurance Compensation Fund and the Motor Insurance Insolvency Compensation Fund and expects that the discretion under article 34(1) of IRRD will not be exercised. Again, views on this approach are welcomed
- Article 35(6) of IRRD allows member states to disapply
the write down or conversion
("WDC") tool as regards:
- liabilities arising from current and future insurance claims which are covered by assets in accordance with Article 275(1), point (a), of Solvency II; and
- liabilities arising under private health insurance contracts or
private long-term care insurance contracts provided as an
alternative to mandatory health or long-term care cover provided by
the statutory social security system. The exclusion shall apply
only to the part of the liability concerned that replaces the
mandatory component of the statutory social security system.
The Consultation seeks views on this discretion on the scope of the WDC.
- Article 52(2) of IRRD provides that member states may require that ultimate parent undertakings ensure that in-scope third-country subsidiary undertakings include specific terms in certain financial contracts. The Consultation states that the Minister's initial view on this discretion is that it should be exercised in order to enhance the effectiveness of the resolution framework by ensuring that counterparties in financial contracts cannot terminate their positions solely as a result of the entry into resolution of those institutions or entities. Observations as to this approach are welcomed.
- Article 67(1) of IRRD provides the option for member states to require resolution authorities to obtain judicial pre-approval before taking a crisis prevention measure or a crisis management measure. The Consultation highlights that the Department is considering the extent to which the transposing legislation will provide for judicial pre-approval for decisions under IRRD. However, the Consultation goes on to set out that the Minister's initial view, in this regard, is that crisis management measures and crisis prevention measures under IRRD will require judicial preapproval. It should be noted that legal analysis of this issue is ongoing, however, feedback is welcome.
- Under article 81(1) of IRRD, each member state is required to
establish one or more financing arrangements to
ensure that the resolution authority has adequate funds at its
disposal. The purpose of the financing arrangements is to cover at
least the payment of the difference to shareholders, policy
holders, beneficiaries, claimants or other creditors referred to in
Article 57 of IRRD – the 'No Creditor Worse Off'
("NCWO") principle. Article 81(1) of
IRRD also provides that member states may provide for the possible
use of financing arrangements to cover other costs associated with
the use of resolution tools, insofar as the use of financing
arrangements is necessary for the achievement of the resolution
objectives. Further, member states may also use the same
administrative structure for their financing arrangements as for
their insurance guarantee schemes. The Consultation sets out that
the Minister is of the view that the financing arrangements to be
put in place should cover not only NCWO costs, but also other costs
associated with the use of resolution tools. Observations as to
this approach are sought. The Consultation states that, in
conjunction with the Central Bank, the Minister has considered a
number of policy options as regards the transposition of article 81
– these policy options are set out and considered in detail
in section 4 of the Consultation, under the following headings:
- the proposed ex-ante or ex-post nature of the financing arrangements under IRRD;
- the proposed target level for the financing arrangements under IRRD;
- the proposed vehicle structure for the proposed financing arrangements under IRRD;
- the scope of the proposed financing arrangements under IRRD; and
- the proposed metric for calculation of the financial contribution requirement under the transposing legislation.
Feedback is sought on all of the forgoing proposals as regards financing arrangements.
Next Steps
The Consultation is open for feedback until 5 September 2025. Feedback may be submitted via email at insurnace@finance.gov.ie or by post at the relevant address.
2. MiCA Updates: (1) ESMA publishes statement on guidance for CASPs offering unregulated services (2) ESMA publishes final report for criteria on knowledge and competence assessment under MiCA (3) ESMA publishes results of peer review on CASP authorisations under MiCA (4) ESMA publishes official translations of supervisory guidelines to prevent market abuse under MiCA
1. ESMA publishes statement on guidance for CASPs offering unregulated services
On 11 July 2025, the European Securities and Markets Authority ("ESMA") published a statement ("Statement") setting out guidance for crypto-asset service providers ("CASPs") offering services that do not fall within the scope of the markets in crypto-assets regulation ("MiCA") or other sectoral EU legislation.
The Statement warns that risks arise for investors from both MiCA regulated, and unregulated, products and services.
The Statement sets out some of the risks that are likely to arise stemming from the provision of unregulated products and services and further details issues that CASPs should particularly be aware of when providing such unregulated products and services.
The Statement highlights the risk posed to investors by situations where CASPs offer regulated and unregulated products / services whereby clients and prospective clients misunderstand the protection afforded to them as they may be unaware that MiCA protection does not extend to the unregulated products / services.
The potential for a 'halo effect' due to a CASP regulated status under MiCA may also provide false reassurance to investors as regards unregulated products / services.
ESMA has stated that CASPs should take all necessary measures to ensure that clients and prospective clients are fully aware of the regulatory status of the product / service they are receiving and in that regard, the Statement sets out a table identifying "dos and don'ts, some of which are as follows:
- the regulatory status of the product / service should be clearly and effectively communicated in all dealings with clients, and at every stage of the sales process;
- any information on a CASP's website regarding unregulated activity should be clearly distinguished from regulated activities, with separate sections on any website operated as regards regulated activity;
- the entity offering each product / service should be clearly communicated with the applicable legal and regulatory status established; and
- in advance of a client being provided with unregulated products / services, there should be a pop-up window stating that the product / service is unregulated.
Some of the practices that should be avoided, as per the Statement, are as follows:
- terminology used should not imply that a product or service falling outside of the scope of MiCA or other EU sectoral legislation is regulated in any way where that is not the case;
- the CASP's regulatory status should not be used as a promotional tool; and
- unregulated entities should not offer products / services, whether regulated or unauthorised under MiCA, through the CASP's interface with clients.
2. ESMA publishes final report for criteria on knowledge and competence assessment under MiCA
On 11 July 2025, the European Securities and Markets Authority ("ESMA") published a final report ("Report") on the guidelines ("Guidelines") for the criteria on the assessment of knowledge and competence under the markets in crypto-assets regulation ("MiCA").
ESMA is of the view that all crypto - asset service providers ("CASPs"), not just those engaged in providing advice, should ensure that natural persons giving information about crypto - assets or crypto - asset services possess the necessary knowledge and competence to fulfil their obligations. Against this background, ESMA consulted on the Guidelines in February 2025, for more information, see FIG Top 5 at 5 dated 20 February 2025.
The Guidelines aim to:
- provide guidance on the minimum level of knowledge and competence of staff through examples, for example, on professional qualification and appropriate experience for the provision of information or advice; and
- address specific features and risks of crypto-assets markets and services, such as the high volatility of crypto-assets and cyber security risks, through the criteria for the assessment of the relevant staff's knowledge and competence.
The Guidelines will aid CASPs as regards meeting their obligations to act in the best interests of their clients and will also support competent authorities in adequately assessing how CASPs meet these obligations.
Next Steps
The Guidelines will be translated into all EU languages and published on ESMA's website – they will apply six months from the date of such publication.
3. ESMA publishes results of peer review on CASP authorisations under MiCA
On 10 July 2025, the European Securities and Markets Authority ("ESMA") published the executive summary of a peer review ("Review") on the authorisation and early supervision of a crypto-assets service provider ("CASP") by the Malta Financial Services Authority ("MFSA").
The Review highlights that although it was directed at one national competent authority ("NCA"), the findings are relevant to all other NCAs and regard should be had to such findings to ensure that authorisations are well assessed in this new and high-risk sector, where supervisory knowledge is still being acquired.
Additionally, the Review aims to foster supervisory convergence and to improve the supervisory practices of all NCAs.
Some of the recommendations identified by the Review, that are relevant to all NCAs in their ongoing and upcoming CASP authorisations, are as follows:
- business growth – NCAs are advised to assess CASPs' business plans in a forward-looking manner, paying particular attention to expected business growth and the underlying risks. NCAs are also encouraged to make use of the digital finance standing committee ("DFSC") to keep sharing information on their supervisory settings, resources and tools for CASPs supervision;
- conflicts of interest, including those related to the combination of CASPs services and the related disclosure requirements;
- governance and intragroup arrangements – NCAs are encouraged to use the principles on third-party risks supervision, recently published by ESMA, as a baseline for the supervision of intragroup arrangements;
- ICT architecture – the Review recommends that, in advance of granting an authorisation, NCAs should review ICT systems, including business continuity, in light of DORA requirements, particularly focusing on the functions and services that are most critical to the CASP business, for example, custody; and
- Web3 and decentralised products, including the promotion of unregulated services – the Review recommends that NCAs assess the inherent exposure to decentralised finance risks and whether CASPs have adequate controls in place to manage them. NCAs should also evaluate the promotion of any unregulated services to avoid any risk of customer confusion.
Next Steps
ESMAhas stated that NCAs are expected to integrate the recommendations in the Review in their internal processes and also in their ongoing and future CASP authorisations. Further, ESMA states that it will "continue promoting further discussion on the recommendations and cross border cooperation."
4. ESMA publishes official translations of supervisory guidelines to prevent market abuse under MiCA
On 9 July 2025, the European Securities and Markets Authority ("ESMA") published the official translations of its guidelines ("Guidelines") on supervisory practices to prevent and detect market abuse under the regulation on markets in crypto-assets ("MiCA").
The Guidelines aim to ensure consistency between competent authorities' supervisory practices to prevent and detect market abuse involving crypto-assets. The final report on the Guidelines was published by ESMA on 29 April 2025, for more information, see FIG Top 5 at 5 dated 1 May 2025.
Next Steps
The Guidelines will apply from 9 October 2025, being three months following the publication of the official translations on ESMA's website.
3. Operational Resilience Updates: (1) EBA launches consultation on draft guidelines on sound management of third party risk (2) ESAs publish guide on oversight activities under DORA
On 8 July 2025, European Banking Authority ("EBA") launched a public consultation ("Consultation") on draft guidelines ("Guidelines") on the sound management of non – ICT related third party risk.
Highlighting the increasing reliance by financial institutions on third party service providers ("TPSPs"), the Consultation notes that such reliance may result in increased risk, and exposure to significant harm, for financial entities, their customers and, in some cases, the wider financial system.
Against this background, the Consultation states the importance of financial entities continuing to strengthen their governance arrangements including their operational resilience.
Application
The Guidelines update the EBA guidelines on outsourcing arrangements, that were issued in 2019, in line with DORA. The scope of the Guidelines has been widened and they will now apply to:
- institutions subject to directive 2013/36/EU ("CRD");
- investment firms that do not meet all the conditions to qualify as small and non-interconnected under article 12(1) of regulation (EU) 2019/2033 ("IFR");
- payment and electronic money institutions;
- issuers of asset-referenced tokens ("ARTs") subject to MiCA; and
- creditors as defined in point (2) of article 4 of directive 2014/17/EU ("MCD") which are financial institutions.
Contents
The Guidelines set out the steps that are to be taken by financial entities for the life cycle of third party arrangements ("TPAs") and address matters related to risk assessment, due diligence, contractual phase, sub-contracting, monitoring, termination rights, exit strategies. The aim is to ensure consistency with the DORA framework in so far as is possible.
Further, the EBA has stated that the Guidelines aim to achieve consistency with DORA by allowing financial entities to store consistent information as regards ICT and non-ICT services, to include the possibility of using a single register.
The Guidelines also take proportionality into account by limiting the level of information required to be documented, with the aim of reducing the burden on financial entities and competent authorities.
Transitional Period
Financial entities that come within the scope of the Guidelines will have a two year transitional period to review and amend their existing TPAs and to update the register for non-ICT TPAs.
Next Steps
The Consultation is open for feedback until 8 October 2025. The EBA will hold a virtual public hearing on 5 September 2025, registration for which is open until 1 September 2025, via this link.
2. ESAs publish guide on oversight activities under DORA
On 15 July 2025, the European Supervisory Authorities ("ESAs") published a guide ("Guide") on oversight activities under DORA.
The purpose of the Guide is to explain the critical third-party service providers ("CTPPs") oversight framework including, its objectives / underlying principles / structure / activities / implementing processes / and expected outcomes.
Accordingly, the Guide provides an overview of:
- the governance structure;
- the oversight processes;
- the founding principles;
- the tools available to the overseers; and
- the adoption process.
The Guide is addressed to CTPPs, financial entities and competent authorities, however, the Guide states that it should be read by anyone seeking to understand the DORA oversight framework and activities.
4. EIOPA Updates: (1) EIOPA launches consultation on amendments to supervisory reporting and public disclosure requirements under Solvency II (2) EIOPA publishes first batch of technical standards under amended Solvency II Directive (3) EIOPA launches consultation on revised guidelines on exchange of information within colleges under Solvency II (4) EIOPA publishes guidance on supervision of mass-lapse reinsurance and reinsurance termination clauses
1. EIOPA launches consultation on amendments to supervisory reporting and public disclosure requirements under Solvency II
On 10 July 2025, the European Insurance and Occupational Pensions Authority ("EIOPA") launched a consultation ("Consultation") on amendments to supervisory reporting and public disclosure requirements under Solvency II.
The Consultation package includes proposals regarding the following:
- draft implementing technical standards ("ITS") as regards templates for the submission by insurance and reinsurance undertakings to their supervisory authorities ("ITS on Supervisory Reporting"). These ITS will repeal implementing regulation (EU) 2023/894. The draft RTS are set out in a separate zip file to the Consultation paper;
- draft ITS with regard to the procedures, formats and templates for the disclosure by insurance and reinsurance undertakings of their report on their solvency and financial condition ("ITS on Public Disclosure"). These ITS will repeal implementing regulation (EU) 2023/895. The draft RTS are set out in a separate zip file to the Consultation paper;
- draft revised guidelines on reporting for financial stability purposes (included as a separate annex to the Consultation paper); and
- Draft revised Guidelines on the supervision of branches of third country insurance undertakings (included as a separate annex to the Consultation paper).
The ITS on Public Disclosure and the ITS on Supervisory Reporting include changes in the following areas:
- changes of the reporting obligations stemming from the change of level 1 and level 2 text;
- the correction of errors / inconsistencies identified in the first year of the application of the latest ITS on supervisory reporting and ITS on public disclosure (applicable since December 2023); and
- new limited information requests in areas where new supervisory needs have been identified to ensure that the supervisory reporting remains fit for purpose.
EIOPA has stated that all the documents, above, include proposals for the reduction of the reporting burden in line with the European Commission's aim to reduce the reporting burden by at least 25% for all companies.
In a related press release, EIOPA stated that the overall reduction in reporting is achieved by reducing the frequency of certain templates, deleting some annual templates, making greater use of proportionality principles and introducing technical simplifications across the framework.
Next Steps
The Consultation is open for feedback until 10 October 2025. It is intended that the ITS and the guidelines will be applicable from 30 January 2027.
2. EIOPA publishes first batch of technical standards under amended Solvency II Directive
On 14 July 2025, the European Insurance and Occupational Pensions Authority ("EIOPA") published three draft technical standards and one set of revised guidelines as part of the implementation of the revised Solvency II Directive.
The following is a high-level overview of the published technical standards and guidelines:
- Final Report on draft regulatory technical standards ("RTS") on factors for identifying undertakings under dominant or significant influence and undertakings managed on a unified basis. These draft RTS specify factors for identifying insurance undertakings that are under dominant or significant influence, as well as those managed on a unified basis. These factors are relevant for supervisory authorities to identify and effectively supervise insurance groups.
- Final Report on draft RTS on the relevance of cross-border activities of undertakings for the host market. The Solvency II review introduces new rules to enhance cooperation and information exchange between home and host supervisors in case of significant cross-border activities. These RTS set out the conditions and criteria that need to be considered by host supervisors when determining the relevance of cross-border activities for their market.
- Final Report on revised implementing technical standards ("ITS") on the lists of regional governments and local authorities' exposures. These ITS provide updates to the list of regional governments and local authorities. Insurers' exposures to entities in the list should be treated like exposures to central governments when calculating capital requirements, meaning that they should receive a risk factor of 0% for spread risk and concentration risk in the standard formula.
- Final Report on revised guidelines ("Guidelines") on undertaking-specific parameters.
The Guidelines, which can replace standards parameters in standard formula capital requirement calculations, correct outdated legal references and streamline the guidelines without changing their intended meaning.
It is highlighted that, as per EIOPA's approach to simplifying regulation, the number of individual guidelines has been reduced by 21%. For more information on EIOPA's approach regarding simplifying regulation, see FIG Top 5 at 5 dated 10 April 2025.
Next Steps
The three draft technical standards have been submitted to the European Commission, who will decide within three months, whether or not to adopt the draft technical standards.
The Guidelines will be applicable two months following the publication of the official translations on EIOPA's website. In the interim, the guidelines issued in 2015 are applicable.
3. EIOPA launches consultation on revised guidelines on exchange of information within colleges under Solvency II
On 14 July 2025, the European Insurance and Occupational Pensions Authority ("EIOPA") launched a consultation ("Consultation") on its proposal for revised guidelines ("Guidelines") concerning the exchange of information on a systematic basis within colleges of supervisors.
The current guidelines on exchange of information within colleges have been applicable since 2015 ("2015 Guidelines"). These Guidelines supplement the 2015 Guidelines on operational functioning of colleges and are addressed to supervisory authorities within the colleges of EEA groups.
The Guidelines aim at facilitating activities of colleges in the field of exchange of information on a systematic basis. By developing common practices in this area, the Guidelines ensure a consistent approach in deciding upon the scope of information to be exchanged within colleges on a regular basis. The Guidelines also aim to enhance the single market level playing field through a proportionate approach in their application.
The 2015 Guidelines are supplemented as follows:
- a new guideline on the exchange of group own risk and solvency assessment ("ORSA") report has been added; and
- the technical annexes I to III were streamlined; and
- legal references were updated to reflect regulatory changes.
Guidelines 1, 2, 3, and 4 remain unchanged.
Next Steps
The Consultation is open for feedback until 14 October 2025. The Guidelines will apply from 30 January 2027.
4. EIOPA publishes guidance on supervision of mass-lapse reinsurance and reinsurance termination clauses
On 15 July 2025, the European Insurance and Occupational Pensions Authority ("EIOPA") published two annexes to its 2021 opinion on the use of risk mitigation techniques by insurance undertakings ("Opinion").
This latest publication comes on foot of the closure of a consultation on the matter earlier this year. For more information on EIOPA's consultation on mass-lapse reinsurance and reinsurance termination clauses, see FIG Top 5 at 5 dated 14 November 2024.
The following is a high-level overview of the annexes published this week:
- Annex I re mass-lapse
reinsurance: This annex aims to ensure a common European approach
regarding the supervision of mass-lapse reinsurance, particularly
in view of high lapse risk in several markets over the past years.
The annex also acknowledges that complex ad-hoc treaties like
mass-lapse reinsurance require case-by-case analysis to ensure fair
treatment. Some of the matters addressed by the annex include:
- the main elements of mass-lapse reinsurance treaties;
- Solvency II standard formula SCR calculation;
- valuation of reinsurance recoverables;
- calculation of risk margin; and
- supervisory reporting and public disclosures.
- Annex II re reinsurance agreements' termination clauses:
This annex considers certain features of reinsurance agreements' termination clauses that may undermine the effective transfer of risk. The annex highlights provisions that release a reinsurer from any responsibility for their portion of legitimately incurred losses during the period covered by the reinsurance treaty.
This annex also examines situations where reinsurance contracts involve asset transfers and include terms that, when terminated, allow the reinsurer to retain all transferred assets and premiums unconditionally, while at the same time, being relieved of any remaining obligations.
5. CRD / CRR Updates: (1) EBA launches three consultations on RTS and guidelines on third country branches under CRD (2) EBA launches consultation on amendments to RTS on own funds and eligible liabilities under CRR
1. EBA launches three consultations on RTS and guidelines on third country branches under CRD
On 11 July 2025, the European Banking Authority ("EBA") launched three consultations on regulatory technical standards ("RTS") and guidelines ("Guidelines") on third country branches under the capital requirements directive ("CRD") as regards booking arrangements, capital endowment and supervisory colleges.
The EBA has stated that the RTS and the Guidelines, set out in the consultations, are aimed at:
- fostering the harmonised and consistent implementation of the new EU framework for third-country branches;
- enhancing comparability across member states; and
- promoting effective supervisory cooperation.
The consultations are as follows:
- Consultation on draft RTS specifying the booking arrangements that third-country branches are to apply for the purposes of Article 48h of CRD. These draft RTS elaborate on the methodology that third-country branches should follow to track and keep a precise and comprehensive record of all assets, liabilities and off-balance sheet items that arise from the activities of third-country branches;
- Consultation on draft Guidelines on instruments available for third country branches for unrestricted and immediate use to cover risks or losses under Article 48e(2)(c) of CRD. The draft Guidelines include the list of instruments that third country branches can use - in addition to cash and debt securities issued by central governments or central banks of member states - to meet their capital endowment requirement and set out minimum operational conditions that third country branches should respect in order to ensure that the capital endowment instruments serve their purpose; and
- Consultation on draft RTS on cooperation and colleges of supervisors for third-country branches under Article 48p(7) of CRD.
These draft RTS set out the procedures for cooperation and the conditions for the functioning of the colleges of supervisors for competent authorities supervising third-country branches and subsidiary institutions of the same third-country group. They aim to ensure efficient and effective supervision of third country groups in the EU.
Next Steps
The consultations, above, are open for feedback until 10 October 2025. The EBA will hold a public hearing addressing the subject matters of the consultations on 3 September 2025 – registration for which is open until 1 September 2025.
The EBA is required to submit the draft RTS to the European Commission by 10 January 2026. It is intended that the Guidelines will be applicable from 11 January 2027.
2. EBA launches consultation on amendments to RTS on own funds and eligible liabilities under CRR
On 9 July 2025, the European Banking Authority ("EBA") launched a consultation ("Consultation") on draft regulatory technical standards ("RTS") to amend the delegated regulation ("Delegated Regulation") on the timing for the application for prior permission to reduce own funds and eligible liabilities under the capital requirements regulation ("CRR").
Background
The Delegated Regulation was published on 26 May 2021, with an extended prior permission timeline of four months. Feedback received during the corresponding consultationwas to the effectthat the four month period was too long and that the original time of three months should be preserved.
At that time, the EBA undertook to monitor the practical implementation and the practices of the various authorities.
Amendment
The Consultation notes that, as a result of such monitoring referred to above, the EBA is now of the view that the relevant authorities are able to process applications in a shorter period of time. Consequently, the draft RTS propose a reversion to the shortened time frame of three months in order to process applications to reduce own funds and eligible liabilities instruments.
Next Steps
The Consultation is open for feedback until 9 October 2025. The EBA will hold a virtual public hearing on 2 September 2025, registration for which closes on 28 August 2025.
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