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Speaking at EIOPA’s seventh annual conference in Frankfurt, Gabriel Bernardino, chairman of EIOPA, said it would be a risk-based culture that:
“A common supervisory culture cannot be built overnight,” he said. “By working together, step-by-step, focused and challenging each other along the way, we can build a strong and fair supervisory culture that promotes consumer protection and enhances the stability of the financial system for the benefit of Europe’s business, economy and citizens.”
Mr Bernardino explained that because of the internal market and cross-border activities, “the quality of national supervision is no longer solely a national issue, but a European issue”. He continued: “Day-to-day supervision, including the responsibility for monitoring and ensuring the proper functioning of insurance companies in the European Union, lies with the national supervisory authorities. EIOPA’s supervisory convergence agenda is focused on building common standards and interpretations, on leveraging data for risk assessment and supervisory purposes, on monitoring common standards and on challenging and supporting national competent authorities.”
He pointed to the European Commission’s proposal for the review of EIOPA’s regulation, and said this too puts an emphasis on achieving supervisory convergence.
However, Mr Bernardino said there are still issues that require some fine tuning. Firstly, he said EIOPA’s regulation should be strengthened, “with a mandate to act more intrusively when it detects signals of risks of cross-border failures”, adding: “In order to allow EIOPA to act in a preventive manner, national supervisory authorities should be obliged to notify EIOPA early enough in case insurance companies experience deteriorating financial conditions with possible cross-border effects.”
Secondly, EIOPA’s role with regards to supervisory independence and conflict of interests should also be strengthened.
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