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Gabriel Bernardino, chairman of EIOPA, told a hearing of the European parliament’s Economic and Monetary Affairs Committee that the ability to passport services should imply a sound supervision of such activities throughout the union, and only strong European responses are able to counter negative developments, and provide the consumer with additional safeguards.
“In order to allow EIOPA to act in a preventive manner, national supervisory authorities should be obliged to notify EIOPA early enough in case companies experience deteriorating financial conditions with possible cross-border effects,” he said.
Furthermore, EIOPA’s role with regards to supervisory independence and conflict of interests should also be strengthened, said Mr Bernardino. “These fundamental supervisory principles have gained even more relevance under Solvency II, due to the degree of supervisory judgment necessary in the application of a risk-based regime. It is fundamental that national supervisors are operationally independent, and that they are accountable for the exercise of their functions and powers.”
He told the hearing that supervisors should have adequate powers with proper resources, so they can perform their functions and independently exercise their powers. “The question of supervisory abilities goes beyond the national context, as it also impacts the whole internal market. The operational independence, transparency and accountability of national supervisors therefore need to be reinforced, by providing a strong European framework with a clear role for EIOPA in assessing compliance with that framework,” he said.
EIOPA strongly believes in a holistic and integrated approach towards European prudential and conduct of business supervision, said Mr Bernardino, in order to ensure sound and effective supervision of the insurance and pensions sectors.
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