The general objectives of a resolution process against an insurance or reinsurance company are:

Resolution is used when an insurance or reinsurance company is unable, either alone or with the help of the supervisory authority, to improve its financial position and its failure would lead to undue negative social and financial consequences (public interest risk). In order to assess the impact of a possible disorderly failure of an insurer on the environment, factors are considered including:

  • the size of the insurer
  • the number of customers
  • the types of insurance offered
  • the insurer’s links to the financial system
  • its relevance to the economy or the local market
  • whether and how quickly the critical functions it provides can be replaced.