Insolvency crisis – The recent declaration of insolvency by the German holding company FWU AG has had repercussions throughout Europe, affecting thousands of policyholders in Austria, Belgium, France, Germany, Italy, Luxembourg and Spain. This decision was accompanied by a suspension of payment filed by its Luxembourg subsidiary, FWU Life Insurance Lux SA (FWU Luxembourg), with the District Court of Luxembourg.
Events that took place
On 19 July 2024, FWU AG filed for insolvency due to over-indebtedness with the local court in Munich. On the same day, FWU Luxembourg informed its national supervisory body, the Commissariat aux Assurances (CAA), of its inability to meet regulatory capital requirements. In response, the CAA decided to freeze the subsidiary’s assets and suspend disbursements to protect the interests of policyholders.
Shortly thereafter, FWU Luxembourg requested a formal suspension of payments, a request which was accepted by the Luxembourg court on 2 August 2024. Maître Yann Baden was appointed as administrator in charge of supervising the asset-liability management of the company, with the suspension being limited to a six-month period.
Meanwhile, in Austria, FWU Life Insurance Austria AG continues to operate under the supervision of the Austrian Financial Market Authority (FMA), but has stopped writing new business. Unlike its Luxembourg counterpart, FWU Austria is not in insolvency proceedings.
What this means for policyholders
European policyholders affected by the insolvency of FWU AG are facing great uncertainty. To inform guidance and coordinate cross-border responses, the European Insurance and Occupational Pensions Authority (EIOPA) has stepped in. Although little known to the general public, EIOPA plays a crucial role in ensuring fair treatment and collaboration between national regulators. It provides a framework to protect the interests of policyholders during financial crises.
EIOPA advises affected policyholders to read their insurance contracts carefully and to seek professional advice from insurers, intermediaries or consumer associations. The appointed administrator is exploring solutions for FWU Luxembourg, potentially involving restructuring or liquidation.
Supervision and coordination efforts
National regulators across Europe are working collaboratively to manage the impact of the FWU situation. EIOPA’s role, while non-interventionist, facilitates effective cooperation between these authorities through supervision and information exchange. Regulators involved in this effort include:
Austria: Finanzmarktaufsicht (FMA) Belgium: Financial Services and Markets Authority (FSMA) France: Prudential Supervision and Resolution Authority (ACPR) Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) Italy: Insurance Monitoring Institute (IVASS) Luxembourg: Insurance Commission (CAA) Spain: Dirección General de Seguros y Fondos de Pensiones (DGSFP)
EIOPA serves primarily as a coordinator, supporting national efforts and promoting fairness in the way policyholders are treated across jurisdictions.
Save as PDFOriginally published in The European Times.
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