The EIOPA Chair Gabriel Bernardino delivered an introductory statement to the Economic & Monetary Affair Committee (ECON) at the European Parliament, as part of the annual hearing of the chairs of ESAs. He focused on supervisory convergence, which is the top priority of EIOPA, and outlined the achievements of EIOPA, the future needs to drive supervisory convergence, and preparations for future challenges.
In addition to outlining the achievements of EIOPA, he highlighted the concrete tools EIOPA uses to further enhance supervisory convergence. These tools included cross-border cooperation platforms, an updated conduct of business strategy, breach of EU Law and Mediation, and a supervisory convergence plan. With respect to the future needs to drive supervisory convergence, he believes that the EIOPA Regulation should be strengthened with a mandate to perform independent evaluations of national supervisory practices and act more intrusively when early signs of cross-border risks are detected. In this context, he gave a few concrete examples involving independent assessment of internal models, enhanced consumer protection, and transparency of stress tests.
While discussing preparing for future challenges, the EIOPA Chair focused on sustainable finance, cyber risk, Brexit, and Pan-European Personal Pension Product (PEPP). Sustainable finance raises both opportunities and challenges for insurers and pension providers. Of all parts of the financial sector, insurance and pensions have the longest time horizons and, therefore, the greatest stake in sustainability. In particular regarding insurers, sustainable finance affects both sides of their balance-sheet: the asset side via their investments and the liability side, for instance, via their exposure to climate change risk. The sustainable finance action plan of EIOPA addresses the need for a cross-pillar approach to sustainable finance, encompassing reflections on capital, governance, and reporting and disclosure requirements.
To enhance understanding of cyber risk underwriting in the European insurance market, EIOPA undertook a structured dialog with insurance companies across Europe. The findings, published in the report titled "Understanding Cyber Insurance" highlights the need for a deeper understanding of cyber risk as a core challenge for the European insurance industry. A questionnaire on cyber risk has been included in the 2018 stress test exercise and the subject will be a growing area of focus for EIOPA, becoming a cross-cutting activity in the 2019 work program of EIOPA. In the area of Brexit, between October 2017 and September 2018, EIOPA issued three Opinions to insurers and national supervisory authorities on steps to take to avoid interruptions to service and to minimize risk. EIOPA is and will continue to monitor the progress in this areas, said Mr. Bernardino. With respect to the latest developments on PEPP, he highlighted the progress achieved so far and emphasized that a central authorization hub and a key contact point for accessing information on PEPP is crucial for its success.
Related Link: Statement of EIOPA Chair (PDF)
Keywords: Europe, EU, Insurance, Sustainable Finance, PEPP, Brexit, Cyber Risk, EIOPA
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