EIOPA provides updated information to policyholders affected by FWU AG’s insolvency

What happened?

On 1 December 2024, the Local Court of Munich ordered the opening of insolvency proceedings for the German holding company FWU AG and appointed an insolvency administrator (seehere). The Court had already ordered provisional insolvency administration for FWU AG on 19 July 2024 (see here).

The holding company owns two insurance undertakings that have policyholders in Austria, Belgium, France, Germany, Italy, Luxembourg and Spain.

On 19 July 2024, FWU Luxembourg informed its national supervisor, the Commissariat aux Assurances (CAA), also acting as group supervisor, that the company no longer complied with the legal requirements relating to the coverage of the minimum capital requirement (the “MCR”), the solvency capital requirement (the “SCR”) under the Solvency II Directive and the coverage of insurance liabilities by eligible representative assets, which is a requirement under national law (see here). To protect the interests of policyholders and beneficiaries, CAA decided on 23 July  2024 to freeze FWU Luxembourg’s representative assets held with credit institutions and suspended all outgoing payments.

On 24 July, 2024, FWU Luxembourg filed for a suspension of payments with the District Court of Luxembourg. On August 2, 2024, the Court of Luxembourg accepted the suspension of payments filed by the undertaking and appointed Maître Yann Baden as administrator to monitor the insurer’s management of the assets and liabilities (see here). The administrator has to give written authorisation for all acts and decisions of FWU Luxembourg. The suspension of payments is limited to a period of up to six months.

On 22 October 2024, FWU Luxembourg formally informed the CAA that it had regained compliance with the MCR coverage requirements (seehere). However, a number of uncertainties remain concerning the assumptions underlying the calculation of this ratio and impacting the calculation of the SCR ratio, in particular:

• the existence of tax liabilities in several European Union countries;
• the contractual right of reinsurers to terminate reinsurance treaties;
• the assessment of the cost of implementing a compensation plan for policyholders who have been subject to mis-selling.

These uncertainties are currently being analysed by the CAA in order to assess the exact coverage rate of the MCR.

As for the SCR and the coverage of insurance liabilities by eligible representative assets, these requirements need to be met by 19 January 2025 at the latest (within six months of the date of 19 July 2024; seehere) and are under CAA’s assessment.

The other subsidiary of the FWU Group, FWU Austria, is supervised by the Austrian Financial Market Authority (FMA). The FMA is in intensive contact with the group supervisor (CAA) and with FWU Austria’s management (see here). It has put measures in place to ensure FWU Austria’s ongoing operations and protect the Austrian subsidiary’s insurance policyholders. FWU Austria is not in insolvency and is continuing its regular business activities.

What can consumers do?

Supervisors have a mandate to act in the best interest of policyholders and have already taken measures to address the situation, such as by freezing assets or halting the underwriting of new business.

Still, the best course of action for policyholders to make an informed financial decision depends on various factors, including the financial situation of the undertaking (currently under review), the terms and conditions of their insurance contract, the specific provisions of contract and insolvency laws that may vary between Member States, as well as other relevant national laws.

Before making decisions, EIOPA therefore encourages policyholders to carefully read the terms and conditions of their contracts and seek professional advice (e.g. from their insurer, their intermediary, dedicated contact points when available in the relevant national market and consumer associations as relevant depending on the market).

For FWU Luxembourg an independent special administrator has been appointed by the Court to temporarily manage the subsidiary. The special administrator is assessing the financial situation of the undertaking and has up to six months to identify a solution, which could range from restructuring to liquidation.

For more information, policyholders are invited to consult the information available on the website the Luxembourgish supervisory authority and the national supervisory authority of their country of residence.

• Austria – Finanzmarktaufsicht
• Belgium – L’Autorité des services et marchés financiers
• France – L’Autorité de contrôle prudentiel et de résolution
• Germany – Bundesanstalt für Finanzdienstleistungsaufsicht
• Italy – Istituto per la vigilanza sulle assicurazioni
• Luxembourg – Commissariat aux Assurances
• Spain – Dirección General de Seguros y Fondos de Pensiones

As the situation evolves, it is important to stay up to date. EIOPA will refresh this page as more information becomes available.

Who is supervising?

Under the current EU supervisory system, the day-to-day supervision lays with the national competent authorities, split between home (including prudential aspects) and host authorities (mostly for distribution aspects). Additional responsibilities for group supervisors include the activities of branches and those carried out based on the principle of ‘free provision of services’. All competent authorities have the responsibility to cooperate and exchange information in the context of supervising cross-border business, where relevant. Under the existing supervisory framework, the European Insurance and Occupational Pensions Authority (EIOPA) has limited intervention powers and performs the role of a coordinator, overseer and mediator.

In cross-border instances, EIOPA closely coordinates with the relevant national competent authorities including via colleges of supervisors and collaboration platforms. EIOPA’s main role in colleges is to promote effective and efficient supervisory activities, evaluate risks to which groups are or might be exposed, oversee the tasks carried out by national supervisors and foster the convergence of supervisory practices related to group supervision. EIOPA sets up and coordinates collaboration platforms to strengthen the exchange of information and to enhance collaboration between the relevant supervisory authorities. EIOPA can request NCAs to provide necessary and timely information for the proper functioning of the platform. However, supervision and enforcement decisions are and remain within the competence of the home supervisor(s).

In particular, in the current case EIOPA is coordinating with the relevant national competent authorities to promote good cooperation and information exchange among supervisors, with the goal of ensuring that all affected European policyholders are treated equitably and fairly, regardless of where they live or purchased their insurance.

It is important to note that the authorisations of both the Luxembourgish and Austrian undertakings have not been withdrawn. As such, they are still listed in EIOPA’s Register of Insurance Undertakings.