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Responding to ideas put forward in a European Commission consultation to either transfer some conduct of business powers from European Insurance and Occupational Pensions Authority (EIOPA) to the European Securities and Markets Authority and/or to merge EIOPA with the European Banking Authority, Insurance Europe said that such moves would not lead to better EU-level supervision or increased convergence in the way national authorities supervise insurance.
Conduct of business and prudential issues are interlinked and changes would dilute the insurance expertise that EIOPA has built since it was created. Insurers must comply with different regulation from European banks because they have a completely different business model. Therefore, insurers need a supervisor focused on and able to understand their distinct business model, risks and consumer needs.
There is also no evidence that another EU supervisory structure would work better and justify the costs, risks and years of uncertainty that would accompany any significant structural changes. In particular, insurers only recently began working under Solvency II, and other significant regulation will come into force in the next few years, so the European regulatory landscape on which supervisory convergence can be built is new or not yet implemented. It is therefore too early and too risky to make structural changes.
While no significant changes to EIOPA’s structure, powers or responsibilities are justified, improvements to EIOPA’s governance are needed. Applying qualified majority voting for all its Board of Supervisor decisions and improving transparency could help in this respect. Other improvements, such as an independent oversight board to support the European Parliament’s oversight of EIOPA should also be considered.
While recognising the need for a strong insurance supervisor, Insurance Europe believes that EIOPA should not be given any further powers at this stage. Instead, the focus should be on ensuring that EIOPA can make the most of its existing powers.