Tuesday, 27 February 2018

ESAs review: Keeping EIOPA as standalone supervisor welcomed; but checks and balances needed

Insurance Europe has published a position paper on the European Commission’s position regarding the review of the European Supervisory Authorities (ESAs).
The paper welcomes the Commission’s recognition of the need to maintain the European Insurance and Occupational Pensions Authority (EIOPA) as a stand-alone authority responsible for both prudential and conduct of business supervision.
Insurance Europe highlighted, however, that EIOPA’s current governance structure does not provide adequate checks and balances, and that the Commission’s proposed changes would exacerbate, rather than address, these issues. To rectify this, Insurance Europe calls for amendments and clarifications to proposals for a new Executive Board for EIOPA, and how that board would interact with EIOPA’s Board of Supervisors.
In terms of EIOPA’s mandate, Insurance Europe suggests that EIOPA’s obligation to ensure the stability and effectiveness of the financial system should be expanded to require it to also act in the best interest of the overall European public good. This could — together with other governance improvements — help ensure that EIOPA considers the broader economic context of its proposed advice and always takes a proportional and balanced approach to its supervisory, as well as regulatory, activities. This would be an effective tool to avoid unintended consequences.
In addition, Insurance Europe proposes that the European Parliament and the European Commission should play a greater role in ensuring oversight and transparency at EIOPA, including in its budget setting and approval process. These checks and balances will become even more vital, given the Commission’s proposals to provide EIOPA with increased powers.
The full response is available here