Such firms operate on either a right of establishment basis or a freedom to provide services basis. The right of establishment basis involves the setting up of a branch in the host member state and providing insurance from that branch. The freedom to provide services basis involves the provision of insurance services directly from the home member state.
6 EIOPA  - Opinion to Institutions of the European Union on the harmonisation of recovery and resolution frameworks for (re)insurers across member states  7 European Systemic Risk Board – Advisory Technical Committee – Insurance Expert Group - Recovery and  resolution for the EU insurance sector: a macroprudential perspective August 2017 8 The Probability Risk and Impact System (PRISM) is the Central Bank’s risk-based framework for the supervision  of regulated firms.