A Cross Border Insurance Market

Danish insurance companies operate in an open and integrated European insurance market. The internal market creates good conditions for competition within the EU, which in turn encourages an effective and innovative insurance market to the benefit of consumers.

The internal market gives insurance companies the opportunity to establish agencies in different countries and sell insurance products across borders. Whilst this is generally to the benefit of consumers, it is at the same time important to ensure a uniform enforcement of EU-regulation.

Supervisory authorities in Denmark and the EU

In Denmark our National Supervisory Authority is responsible for supervision of financial institutions. At EU-level, The European Insurance and Occupational Pensions Authority (EIOPA) establishes standards on how to carry out supervision in the Member States.

Insurance and Pension Denmark believes there is a need for greater cooperation between the different European supervisory authorities. Stronger cross border cooperation between national supervisory authorities in Europe on companies that sell insurances across borders will play an important role preventing future bankruptcies. Cross border cooperation between national supervisory authorities can be in the form of establishing common supervisory platforms, coordinated by EIOPA.

It is important that consumer protection does not stop at the border, given that insurances are sold across borders. Cross border cooperation is necessary to avoid insurance companies going bankrupt in the future.

The Danish non-life guarantee fund is well-functioning

Regardless of financial legislation and supervision, there is always the danger that an insurance company might go bankrupt. In such cases, it is important that consumers are protected. In Denmark, we have a national guarantee fund for non-life insurance companies based on the host-country principle. 

According to Article 98 of the Directive on the recovery and resolution of insurance and reinsurance companies (IRRD), the European Commission is required to submit a report by 29 January 2027, following consultation with EIOPA (the European Insurance and Occupational Pensions Authority), assessing the appropriateness of common minimum standards for insurance guarantee schemes in the EU. The report shall, if relevant, be accompanied by a legislative proposal.

Given that we have a well-functioning guarantee fund in Denmark, it is important for Insurance and Pension Denmark that any potential future minimum EU-harmonization does not leave Danish consumers worse off. We strive to keep our high level of consumer protection and not passing on additional costs to the Danish consumers.

Position of Insurance and Pension Denmark on harmonisation at EU-level

Insurance and Pension Denmark is strongly against any common standards for Insurance Guarantee Schemes (IGS) and, thereby harmonisation at EU-level. Introducing common standards for IGS will run counter to the European Commission’s commitments to simplify and reduce burden of regulations, without any evident benefits for policyholders. The current guarantee schemes vary significantly across Europe, but generally function well within their local context. Any decision to establish an IGS or to change the design of existing IGS must be left to the Member States based on what is best suited to each market.

Instead of harmonization IGS, it is much more efficient:

• to enhance collaboration between the Member States’ national supervisors (which the supervisors already do to some extent, especially for cross-border groups).
• to ensure that the Solvency II framework, which provides strong consumer protection, is fully implemented in all Member States. This protection will be come even stronger when the amendments to Solvency II ((EU) 2025/2) enter into force 30 January 2027, particularly through enhanced supervision of insurance companies conducting cross-border business and strengthened supervisory cooperation.
• to prioritize preventive supervisory efforts across the EU, especially increased monitoring of cross-border insurers with rapid growth, unusually low premiums, or narrow product ranges.

If the EU nonetheless decides to introduce minimum common standards for IGS, Member States must have wide flexibility to design systems suited to their markets, deciding which products and policyholders to cover and how to fund the scheme. Such flexibility is essential to reflect the diversity of insurance markets and welfare systems across Europe and to minimise the new regulatory burdens.