EIOPA published the results of a peer review on the EIOPA Decision on the collaboration between authorities in EU on the supervision of cross-border activities of insurance undertakings. The peer review focuses on how national supervisory authorities approach insurance cross-border activities, how they exchange supervisory information and collaborate, how data is stored, and practices regarding portfolio transfers. Following the assessment, EIOPA has set out 60 recommended actions and four best practices for the national supervisory authorities. EIOPA plans to closely monitor the implementation of the recommendations and will also follow-up with own specific actions. EIOPA issue updates and clarifications to also reflect recent amendments in the Solvency II Directive and proposals for the Solvency II 2020 Review in the Decision.
The recommendations are focused on closing the gaps that may have a negative impact on the effectiveness of the supervisory process and are necessary to further improve cooperation among national supervisory authorities. The recommendations address those main areas:
- Information needed in case of authorization of a new undertaking in case of previous authorizations sought in other member states or where the applicant intends to operate exclusively (or almost exclusively) in another member state
- Information exchange and procedures in case of notification process for activities such as freedom of establishment and freedom to provide services
- Improvements and updates of the data storage tools aiming to keep readily available all necessary information to share with other authorities concerning cross-border activity
Increased cross-border activity in the EU internal market makes the EIOPA Decision on the collaboration of the insurance supervisory authorities a fundamental tool for reinforcing collaboration and building a common European supervisory culture. In this peer review, EIOPA has analyzed legal and regulatory frameworks and national supervisory practices across 32 national supervisory authorities with regard to the application of the Decision. Differences in national supervisory authorities’ approaches and practices in this area were found, and as a result, EIOPA issued a high number of recommended actions (60 recommended actions to 26 national supervisory authorities with the aim of achieving greater supervisory convergence. EIOPA identified several best practices in relation to four aspects of the collaboration that are being applied by national supervisory authorities. These practices are related to effective implementation of the Decision, the notification processes, and ongoing supervision divided into informal regular information exchange between authorities and supervisory activities to support the ongoing supervision.
The national supervisory authorities are expected to implement the recommended actions by the fourth quarter of 2022. EIOPA will take the follow-up actions starting in 2021 and 2022. Regarding the follow-up, starting by the end of 2022, EIOPA will, in line with the EIOPA Regulation, assess how national supervisory authorities have implemented the recommended actions. EIOPA will in its assessment take into account the way national supervisory authorities have implemented improvements after the reference period, as an immediate response to the peer review or to the issued recommended actions.
Keywords: Europe, EU, Insurance, Solvency II, Cross-Border Cooperation, National Supervision, Solvency II Review, EIOPA
Previous ArticleEBA Issues Further Clarifications as End of Brexit Transition Nears
BIS Innovation Hub published the work program for 2021, with focus on suptech and regtech, next-generation financial market infrastructure, central bank digital currencies, open finance, green finance, and cyber security.
In an article published by SRB, Mairead McGuinness, the European Commissioner for Financial Services, Financial Stability, and Capital Markets Union, discussed the progress and next steps toward completion of the Banking Union.
EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).
EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.
BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.
PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).
FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.
FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.
Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.