Friday, 11 January 2019

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Result of ECON vote on ESAs review largely positive, but concerns remain about proposed governance changes



Following the vote yesterday in the European Parliament’s Economics and Finance Committee (ECON) on its report on the review of the European supervisory authorities (ESAs), Olav Jones, deputy director general of Insurance Europe, commented:
“We welcome several of the proposals in the report, which could make the European Insurance and Occupational Pensions Authority (EIOPA) more accountable and give it a clearer mandate. The proposals also maintain the power of local supervisors to do their job, while enabling EIOPA to make better use of its existing powers.
“In particular, the proposal to link EIOPA’s budget more closely to its actions, with increased scrutiny from the European Parliament and the Council of the EU, can help ensure EIOPA’s accountability. The proposal to maintain a minimum of 35% of EIOPA’s funding from the European Commission is also welcome.
“It is also positive that national supervisors, rather than EIOPA, remain responsible for the oversight of internal models. The close links between an insurer’s model and its risk profile mean that such oversight must remain with the lead supervisor. However, Insurance Europe recognises that EIOPA could, if requested by a supervisor, provide its advice and help resolve disagreements.
“The report’s proposals on EIOPA’s mandate are also welcome. Given that several of EIOPA’s previous own initiatives have raised questions over its prioritisation of resources, it is important that EIOPA’s work — including guidelines and recommendations — are strongly tied to its legislative mandate.
“Insurance Europe welcomes the proposals aiming to better coordinate the supervision of cross border insurance business. These will allow EIOPA to play its role in ensuring a safe and competitive market for insurers who operate across borders.
“On governance, however, it is doubtful that the quality of EIOPA’s decision-making and preparation will be improved without the involvement of national supervisors in the proposed new executive board. Insurance Europe believes EIOPA’s current management board benefits greatly from the involvement of national supervisors, who have real day to day experience of company oversight and knowledge of the different products that are available in Europe.”

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