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26 April 2019

EIOPA reports about its 2018 supervisory activities and sets out the 2019 priorities

The EIOPA published its 2018 Supervisory Activities Report in accordance with Article 259 of the Solvency II Directive. Following the publication of the Common Supervisory Culture in November 2017 and the Supervisory Convergence Plan for 2018 -2019 in April 2018 this first annual Report outlines the supervisory activities conducted in 2018 and sets out the priorities for 2019.

In 2018, EIOPA addressed supervisory convergence from different perspectives and using different tools depending on the issue and risks at stake. Among others, the following deliverables were important milestones:

  • The development of a common framework for assessing conduct risk through the product's lifecycle to identify drivers of conduct risk throughout all stages of the product's lifecycle and the implications of these in the emergence of consumer detriment
  • The issuance of the Opinion on non-life cross border insurance business of a long-term nature and its supervision to address specific cross-border situations where evidence has shown that not all market players might be properly and prudently calculating the Technical Provisions and therefore could be jeopardising the policyholders of the host country
  • The use of cooperation platforms to ensure timely identification of preventive measures resulting in successful implementation of recovery measures
  • The issuance of two Opinions related to Brexit to ensure service continuity and consistency in supervisory approaches, namely on the disclosure of information to customers and on risks to the solvency position of (re)insurance undertakings

EIOPA also concluded three peer reviews on the principle of proportionality when assessing key functions, on the supervisory assessment of fitness and propriety and on the application of the prudent person rule for the supervision of occupational pension funds.

EIOPA continued to detect issues related to cross-border business activities provided through freedom to provide services. Using EIOPA's cooperation platforms preventive measures were timely identified and resulted in the successful implementation of relevant recovery measures and in two cases led to the liquidation of undertakings. EIOPA finalised the 1-year technical assistance to the Romanian national supervisory authority to strengthen its supervisory capacity.

In 2019, the priorities for 2018 remain but with new activities identified for each priority area. New supervisory activities include work on conduct of business supervisory practices under the Supervisory Handbook, analysis of the consistency of technical provisions best estimate calculation, analysis of the supervision of run-off undertakings as well as the promotion of supervisory convergence in the European pensions sector regarding the implementation of IORP II.

Furthermore, EIOPA will improve the follow up of EIOPA recommendations addressed to NCAs and continue to assess supervisory practices in general and on a thematic basis to foster supervisory convergence and consistent, high quality supervisory practices among NCAs for the benefit of the European citizens.

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