EIOPA Recommends Ways to Address Issues Identified by EU Stress Test

The five EIOPA recommendations have been categorized as follows: 

• Supervisory convergence and financial stability (Recommendations 1 to 3). EIOPA highlights the need to strengthen the supervision of the affected groups and requests the national competent authorities to review and, where necessary, to challenge capital and risk management strategies of those groups. Furthermore, the national competent authorities should require groups to identify the range of possible management actions, assess whether these actions are realistic, and consider potential second-round effects.
• Efficiency and enhancing the stress test exercise process (Recommendation 4). EIOPA requests national competent authorities to check the adequacy and flexibility of systems and risk models used by groups for stress testing.
• Cross-sectoral coordination (Recommendation 5). EIOPA calls on national competent authorities to enhance cooperation and information-sharing with relevant authorities, such as the ECB Single Supervisory Mechanism and/or other national supervisory authorities of affected insurers that are part of a financial conglomerate.

Related Links

• News Release
• Recommendations (PDF)
• Results of Stress Test (PDF)

Keywords: Europe, EU, Insurance, Stress Testing, Recommendations, Financial Stability, Risks and Vulnerabilities, EIOPA