European countries are considering introducing a standard guarantee scheme that applies in all EU member countries. But the logistics of how it would work, and the benefits for consumers, are still to be determined.
The EU already operates a system by which insurers from one country have the right to sell cover in all member countries. However, in countries making up a third of the population there is no guarantee scheme to protect customers against insurers going bust, while in the remaining countries the schemes vary widely.
There's also inconsistencies about which schemes operate. In some countries the policy comes under the scheme in the country where the customer lives, while in others the policy comes under the scheme in the country where the insurer is based.
The European Commission is currently working on a scheme that means all countries must have a scheme offering at least a minimum level of protection. However, the current proposal is that customers would only automatically be protected if they dealt with an insurer in their own country. If they took out a policy with a foreign firm, any protection would be dependent on the rules of the foreign country concerned.
There's also debate on exactly what would be covered. Insurers have argued it is only appropriate to apply the rules to life insurance as most other types of policy only last for a set period, thus limiting the potential damage in the event of a collapse.