The EIOPA published a Report on Group Supervision and Capital Management of (Re)Insurance Undertakings and on specific topics related to Freedom to Provide Services (FoS) and Freedom of Establishment (FoE) under Solvency II Directive.
The European Commission is required by Article 242 (2) of the Directive 2009/138/EC to make an assessment of the benefit of enhancing group supervision and capital management under Solvency II. In this regard this report is the response to the European Commission's request of 7 June 2018 and based on the list of specific items the European Commission identified for the scope of the review.
Based on the findings presented in the report EIOPA concludes that the tools developed by EIOPA to strengthen group supervision and supervision of cross-border issues contributed to substantial progress in the convergence of practices of National Competent Authorities (NCAs), but significant challenges remain.
EIOPA finds a number of gaps in the regulatory framework that lead to divergent supervisory practices, such as:
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In the definition of intra-group transactions
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In the assessment of availability of eligible own funds at group level
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In the treatment of Insurance Holding Companies and Mixed Activity Insurance Holding Companies in the scope of group supervision
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In the inclusion of holding companies, which are not licensed insurance undertakings in the scope of group supervision
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In the adequate application of the combination of methods to calculate the group solvency requirements
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In referencing from the Solvency II framework to other financial sectors
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In the application of the mutatis mutandis to groups that fall under the scope of the Solvency II framework
In the report EIOPA also identifies that effective supervision of insurance groups will benefit from a harmonised approach in a number of areas, for example as regards early intervention, recovery and resolution and the assessment of group own funds.
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