Article 37

Directive (EU) 2025/1 of the European Parliament and of the Council of 27 November 2024 establishing a framework for the recovery and resolution of insurance and reinsurance undertakings and amending Directives 2002/47/EC, 2004/25/EC, 2007/36/EC, 2014/59/EU and (EU) 2017/1132 and Regulations (EU) No 1094/2010, (EU) No 648/2012, (EU) No 806/2014 and (EU) 2017/1129 (Text with EEA relevance) · European Union

Member States shall ensure that, when resolution authorities apply the write-down or conversion tool and exercise the power specified in Article 42(1), point (h), they may apply a different conversion rate to different classes of capital instruments and liabilities in accordance with one or both of the following principles: the conversion rate represents appropriate compensation to the affected creditor for any loss incurred by virtue of the exercise of the write-down or conversion powers; the conversion rate applicable to liabilities that are considered to be senior under applicable insolvency law is higher than the conversion rate applicable to subordinated liabilities.

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Source: EUR-Lex (Cellar) · retrieved 2026-10-14 · Text as adopted (Official Journal); later amendments are not incorporated in this text.