Featured Product

    EIOPA Examines National Compliance with Prudent Person Rule in EU

    April 15, 2019

    EIOPA published a report presenting results of the peer review examining supervisory practices on the application of the Prudent Person Rule for Institutions for Occupational Retirement Provision (IORPs). The report identifies best practices and outlines recommended actions based on the review. EIOPA will assess the compliance of the national competent authorities with the recommended actions and continue its work to improve supervisory practices in this area at European level.

    In this report, EIOPA identified six best practices in relation to the supervisory assessment processes adopted by some national competent authorities and to the manner in which the national competent authorities interpret the Prudent Person Rule. The review found that supervisory approaches are largely determined by the manner in which the Prudent Person Rule is embedded in national legislation. Supervisory approaches also vary according to the type of scheme (defined benefit or defined contribution) and the maturity of the pension industry. National competent authorities that have adopted a risk-based approach or a prudent person plus approach—that is a risk-based approach complemented with quantitative limits—use more sophisticated tools and perform their supervisory activities in a risk-based and forward-looking manner. 

    The report highlights that the national competent authorities using a compliance-based approach can enhance their supervision by including risk-based and forward-looking tools in their supervisory practices. EIOPA proposed several recommended actions, which concern:

    • The frequency and granularity of the data collected
    • The manner in which national competent authorities conduct their supervisory assessment
    • The regular application of the look-through approach
    • The appropriate consideration of interest rate risks for defined benefit schemes
    • Supervisory practices of national competent authorities with regard to the governance of IORPs
    • The frequency of on-site inspections

    The peer review considered the basis for the interpretation of the Prudent Person Rule, legal and regulatory frameworks, information gathered for assessment, assessment methods, and supervisory actions taken. The review was conducted among 27 national competent authorities from 24 European Economic Area countries.

     

    Related Links

    Keywords: Europe, EU, Insurance, Pension Funds, Peer Review, Supervisory Practices, Prudent Person Rule, IORP, EIOPA

    Related Articles
    News

    HKMA on Fintech Adoption and Innovation by Banks in Hong Kong

    HKMA announced the publication of a report on fintech adoption and innovation in the banking industry in Hong Kong.

    May 20, 2020 WebPage Regulatory News
    News

    BIS on Impact of Increasing Use of Cloud Technology on Cyber Risk

    BIS published a working paper that examines the drivers of cyber risk, especially in context of the cloud services.

    May 20, 2020 WebPage Regulatory News
    News

    ECB Consults on Guide for Managing Climate and Environmental Risks

    ECB launched consultation on a guide specifying how the Banking Supervision expects banks to consider climate-related and environmental risks in their governance and risk management frameworks and when formulating and implementing their business strategy.

    May 20, 2020 WebPage Regulatory News
    News

    ECB Issues Opinion on Revisions to CRR in Response to COVID Crisis

    ECB published an opinion (CON/2020/16) on amendments to the prudential framework in EU in response to the COVID-19 pandemic.

    May 20, 2020 WebPage Regulatory News
    News

    EBA Assesses Interlinkages Between Recovery and Resolution Planning

    EBA published a report that examines the interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD).

    May 20, 2020 WebPage Regulatory News
    News

    SRB Publishes Final MREL Policy Under the Banking Package

    SRB published the final Minimum Requirements for Own Funds and Eligible Liabilities (MREL) policy under the Banking Package.

    May 20, 2020 WebPage Regulatory News
    News

    EIOPA Risk Assessment Shows Increase in Credit and Market Risks

    EIOPA published its risk dashboard based on Solvency II data from the fourth quarter of 2019.

    May 18, 2020 WebPage Regulatory News
    News

    MNB Issues Statement on Loan Payments After Moratorium Expires

    MNB published a statement on loan payments post the announced moratorium, in addition to a set of new questions and answers (Q&A) on supervisory measures and requirements announced amid COVID-19 pandemic.

    May 18, 2020 WebPage Regulatory News
    News

    EBA Single Rulebook Q&A: Second Update for May 2020

    EBA updated the Single Rulebook question and answer (Q&A) tool for banks.

    May 15, 2020 WebPage Regulatory News
    News

    US Agencies Temporarily Amend Supplementary Leverage Ratio Calculation

    US Agencies (FDIC, FED, and OCC) published an interim final rule that temporarily revises the supplementary leverage ratio calculation for depository institutions.

    May 15, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5195