European Insurance and Occupational Pensions Authority (EIOPA)

KEY POINTS

Consistent application of law

• EIOPA draws up regulatory and technical standards that accompany laws adopted by the Council and the European Parliament for:
  • insurance and reinsurance companies;
  • financial conglomerates (large financial companies active in various financial sectors);
  • occupational pensions;
  • insurance intermediaries (businesses selling pensions and insurance policies).
• It also has the power to issue guidelines and recommendations on the application of relevant EU law.

Market trends

• To ensure the stability of insurance markets and to protect policyholders, pension scheme members and beneficiaries, EIOPA carries out a range of tasks. These include monitoring consumer trends and assessing potential market risks and vulnerabilities.
• Under certain strict conditions, EIOPA can temporarily prohibit or restrict financial activities that cause a threat to the financial system’s stability or have the potential to cause significant financial damage to customers or consumers.

Breaches of law

• EIOPA has the power to investigate a breach of law by a national authority, when a national authority fails to ensure that a financial institution complies with EU law.
• Within 2 months, EIOPA can issue a recommendation to the national authority. The European Commission may then issue a formal opinion requiring the authority to take the necessary action to comply with the law. If the national authority still does not comply, EIOPA may directly address a decision to a financial institution under certain strict conditions. This decision prevails over previous decisions taken by the national authority on the same matter.

Supervisory convergence

Amending Regulation (EU) 2019/2175 enhanced the scope of EIOPA’s role and responsibilities. It ensures that EIOPA:

• is able to assist national supervisors in the use and authorisation of internal models — used by insurance companies to calculate requirements on solvency capital — thus helping to achieve more convergent outcomes across the Member States;
• can promote convergent supervisory practices within the EU’s internal market and assist competent authorities to protect insurance policyholders in cross-border disputes with the introduction of collaboration platforms — to be set up whenever competent authorities see the need for coordination in the light of specific market developments — and improved information exchange between the different supervisors of insurance firms operating cross-border;
• with the other European supervisory authorities (ESAs), assesses the work of the national supervisors (peer reviews) and publishes reports to encourage compliance and increase transparency;
• in the event of money laundering or terrorist financing by financial sector operators or competent authorities within its remit, gives its prior agreement where a decision is to be taken by the European Banking Authority (which has overarching powers in this field with respect to all the ESAs).