The Directive (EU) 2025/1 establishes a comprehensive framework for the recovery and resolution of insurance and reinsurance undertakings, addressing the risks and systemic concerns that arise from the failure of these entities. It mandates the implementation of pre-emptive recovery and resolution plans, requiring authorities to assess the resolvability of undertakings and ensure appropriate tools for intervention. Resolution objectives prioritise the protection of policy holders and the maintenance of financial stability, alongside ensuring the continuity of critical functions and minimising reliance on public funds.