EIOPA Amends Decision on Cross-Border Supervisory Cooperation in EU
EIOPA published a report that examines the key financial stability risks in the insurance and pensions sector in EU. The report includes two thematic articles on the impact of insurance stress tests on equity prices and systemic risk and on the potential mitigating role of insurance with respect to the risks of climate change. EIOPA also announced that it amended its Decision on the collaboration of the insurance supervisory authorities of the member states in the European Economic Area. The Decision became applicable from July 01, 2021.
The amended Decision takes into account the requirements defined in the Solvency II Directive, the recommendations to EIOPA from the Peer Review on Collaboration, and EIOPA’s own experience in the implementation of the previous Decision. In December 2019, the Solvency II Directive had introduced new notifications requirements for national competent authorities in case of an undertaking carrying out cross-border activities in another member state (Article 152a) and defined the regulatory framework for the cooperation platforms (Article 152b) previously established on the basis of the Decision on collaboration. In this context, the amended Decision will further strengthen and enhance the cooperation between the national competent authorities in relation to cross-border activities through:
- the introduction of three new notifications requirements for national competent authorities: notification in case of intention to authorize an undertaking with cross-border activities, in case an undertaking carrying out cross-border activity shows deteriorating financial conditions or other emerging risks that may have cross-border effects, and in case of serious and reasoned concerns with regard to consumer protection
- a more active role of EIOPA in the information exchange to allow the identification of potential risks at the earliest possible stage as well as to foster proactive supervision and timely supervisory actions
- the clarification of the role of national competent authorities and EIOPA in the process of setting up and running cooperation platforms
The Decision states that supervisory authorities shall perform the notifications and information exchange set out in its Annex by e-mails, until EIOPA develops an appropriate IT tool for this purpose. EIOPA shall provide an e-mail address to the supervisory authorities to enable them to perform the notifications and information exchange. If certain supervisory tasks fall under the competence of other supervisory authorities that are not members of the Board of Supervisors, those supervisory authorities may, subject to approval by the Board of Supervisors, apply this Decision by signing a declaration of commitment, if this contributes to further strengthening cross-border cooperation. EIOPA will continue to monitor the implementation of the Decision and will use its supervisory convergence tools to ensure a consistent application across EU.
Related Links
- Press Release on Financial Stability Report
- Financial Stability Report (PDF)
- Thematic Article on Insurance Stress Tests
- Thematic Article on Climate change
- Press Release on Decision
- Decision and Annex
Effective Date: July 01, 2021 (Decision)
Keywords: Europe, EU, Insurance, Financial Stability Report, Stress Testing, Climate Change Risk, Solvency II, Cross Border Cooperation, Supervisory Convergence, EIOPA
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