Featured Product

    EIOPA Reviews Supervisory Practices of National Competent Authorities

    November 15, 2018

    EIOPA published a peer review report assessing how national competent authorities supervise and determine whether an insurer's setting of key functions fulfills the legal requirements of Solvency II, with an emphasis on proportionality. The report includes findings from a comparative analysis of the key functions, identifies best practices and, presents an overview of recommended actions addressed to the national competent authorities and EIOPA.

    The peer review examines the practices regarding the following:

    • Combining key functions under one holder
    • Combining key functions with administrative, management, or supervisory body (AMSB) membership or with carrying out operational tasks
    • Subordination of one key function under another key function
    • Split of one key function among several holders
    • Assessment of the fitness of key function holders
    • Outsourcing of key functions

    The review finds that the national competent authorities have adopted similar approaches in assessing how insurers manage key functions and applied the principle of proportionality in their assessment. Four best practices have been identified, providing guidance to the national competent authorities for a more systematic approach on the principle of proportionality and ensuring consistent and effective supervisory approaches. Additionally, the report identifies certain weaknesses and presents the resulting recommendations for the national competent authorities. It was found that certain national competent authorities had not yet assessed key functions according to the Solvency II requirements. Other national competent authorities had weaknesses regarding the depth assessment and mitigating measures demanded from insurers—for example, in cases where combinations exist.

    The areas of recommended actions have been linked with the supervisory approach of national competent authorities, the different combinations of key function holders including the internal audit function and AMSB membership, and the fitness of the key function holders and outsourcing. Consequent to this peer review, many national competent authorities have already undertaken actions to improve supervisory practices. These improvements will be taken into consideration in the follow-up to this review. The period examined under the scope of this peer review was 2016 but also covered supervisory practices executed before 2016 in the preparatory stage of Solvency II. The peer review was conducted among national competent authorities from the European Economic Area on the basis of the EIOPA Methodology for conducting Peer Reviews.


    Related Links

    Keywords: Europe, EU, Insurance, Solvency II, Peer Review, Supervisory Practices, Proportionality, EIOPA

    Featured Experts
    Related Articles
    News

    PRA Consults on Implementation of Certain Provisions of CRD5

    PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).

    July 31, 2020 WebPage Regulatory News
    News

    EIOPA Report Identifies Key Financial Stability Risks for Insurers

    EIOPA published the financial stability report that provides detailed quantitative and qualitative assessment of the key risks identified for the insurance and occupational pensions sectors in the European Economic Area.

    July 30, 2020 WebPage Regulatory News
    News

    EBA Publishes Risk Dashboard for First Quarter of 2020

    EBA published its risk dashboard for the first quarter of 2020 together with the results of the risk assessment questionnaire.

    July 30, 2020 WebPage Regulatory News
    News

    EBA Issues Updates on Stress Test Exercise for Banks in EU

    EBA announced that the next stress testing exercise is expected to be launched at the end of January 2021 and its results are to be published at the end of July 2021.

    July 30, 2020 WebPage Regulatory News
    News

    PRA Proposes Guidance Related to Matching Adjustment under Solvency II

    PRA published the consultation paper CP11/20 that sets out its expectations and guidance related to auditors’ work on the matching adjustment under Solvency II.

    July 30, 2020 WebPage Regulatory News
    News

    MAS Issues Guidance on Dividend Distributions by Banks

    MAS published a statement guidance on dividend distribution by banks.

    July 30, 2020 WebPage Regulatory News
    News

    APRA Updates Guidance on Capital Management for Banks

    APRA updated its capital management guidance for banks, particularly easing restrictions around paying dividends as institutions continue to manage the disruption caused by COVID-19 pandemic.

    July 29, 2020 WebPage Regulatory News
    News

    FSB Report Reviews Macro-Prudential Framework and Tools in Germany

    FSB published a report that reviews the progress on data collection for macro-prudential analysis and the availability and use of macro-prudential tools in Germany.

    July 29, 2020 WebPage Regulatory News
    News

    EBA Urges Firms to Finalize Preparations for End of Brexit Transition

    EBA issued a statement reminding financial institutions that the transition period between EU and UK will expire on December 31, 2020; this will end the possibility for the UK-based financial institutions to offer financial services to EU customers on a cross-border basis via passporting.

    July 29, 2020 WebPage Regulatory News
    News

    SRB on Operational Continuity in Resolution and FMI Contingency Plans

    SRB published guidance on operational continuity in resolution and financial market infrastructure (FMI) contingency plans.

    July 29, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5604