Insurance Guarantee Schemes (IGSs) provide last-resort protection to consumers when insurance undertakings are unable to fulfill their contractual commitments. They thus protect people against the risk that claims will not be met if their insurance company becomes insolvent.
Guarantee schemes operate in other sectors of the financial services industry. In particular, deposit guarantee and investor compensation arrangements are in place in all EU Member States, and minimum protection standards have been harmonized at the EU level with the implementation of the 1994 Deposit Guarantee Scheme (DGS) Directive and of the 1997 Investor Compensation Scheme (ICS) Directive1. However, there is no such common European framework in the insurance sector.
