Reuters reported that at the recent European Insurance Forum, EIOPA’s head of policy Manuela Zweimuller said: “EIOPA is closely monitoring the developments and will publish in due course its guidance for national authorities on sound principles for authorisation and supervision. We will subsequently closely monitor their implementation.”
Reuters said the risk of such arbitrage has crept onto the radar of politicians and regulators as financial services firms begin to outline plans to move operations to different member states following Britain’s vote last year to leave the EU. It noted that EIOPA’s move follows the European Securities and Markets Authority (ESMA) announcement that it is to publish guidelines for national regulators on this issue before the summer.
The news agency said ESMA was discussing the potential risks of new ‘letterbox’ companies springing up in the EU, delegating key operations to parents in London. ESMA’s chairman warned that countries offering such flexible solutions to attract business could undermine stability, and told a recent conference they want to avoid competition on regulatory and supervisory practices between member states, and a “possible race to the bottom”.
According to Reuters, Ireland’s government has complained to the European Commission that rival centres were “offering a backdoor to the EU’s single market” through lax rules.
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