Federation supports EIOPA as stand-alone authority; governance checks needed

Written by Adam Cadle

27/02/2018

The European Commission’s recognition of the need to maintain EIOPA as a stand-alone authority responsible for both prudential and conduct of business supervision has been welcomed by Insurance Europe, but improvements need to be made around EIOPA's current governance structure, the federation said.

In its position paper on the EC's position regarding the review of the European Supervisory Authorities, Insurance Europe said the current 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 has called 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 suggested 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," the federation said.

"This would be an effective tool to avoid unintended consequences."

In addition, Insurance Europe proposed that the European Parliament and the EC 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," it said.
On powers, Insurance Europe pointed out that, clarifications may be needed to ensure information is shared between national competent authorities and EIOPA in a timely manner.

"Otherwise, EIOPA already has sufficient powers and some of the proposed changes would risk undermining the important principle of subsidiarity. There was also insufficient justification for the proposed changes to funding," Insurance Europe concluded.

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