WHAT IS THE AIM OF THE REGULATION?
- It sets up EIOPA, a European Union (EU) body that supports coordination between national authorities and ensures the consistent application of EU laws for the insurance and occupational pensions sectors in EU Member States.
- Its aim is to promote financial stability and the public’s trust in the insurance and pensions markets.
- It seeks to protect the rights of policyholders, pension scheme members and beneficiaries.
KEY POINTS
Consistent application of law
- EIOPA draws up regulatory and technical standards that accompany laws adopted by the Council and the European Parliament for:
- insurance and reinsurance companies;
- financial conglomerates (large financial companies active in various financial sectors);
- occupational pensions;
- insurance intermediaries (businesses selling pensions and insurance policies).
- It also has the power to issue guidelines and recommendations on the application of relevant EU law.
Market trends
- To ensure the stability of insurance markets and to protect policyholders, pension scheme members and beneficiaries, EIOPA carries out a range of tasks. These include monitoring consumer trends and assessing potential market risks and vulnerabilities.
- Under certain strict conditions, EIOPA can temporarily prohibit or restrict financial activities that cause a threat to the financial system’s stability or have the potential to cause significant financial damage to customers or consumers.
Breaches of law
- EIOPA has the power to investigate a breach of law by a national authority, when a national authority fails to ensure that a financial institution complies with EU law.
- Within 2 months, EIOPA can issue a recommendation to the national authority. The European Commission may then issue a formal opinion requiring the authority to take the necessary action to comply with the law. If the national authority still does not comply, EIOPA may directly address a decision to a financial institution under certain strict conditions. This decision prevails over previous decisions taken by the national authority on the same matter.
Supervisory convergence
Amending Regulation (EU) 2019/2175 enhanced the scope of EIOPA’s role and responsibilities. It ensures that EIOPA:
- is able to assist national supervisors in the use and authorisation of internal models — used by insurance companies to calculate requirements on solvency capital — thus helping to achieve more convergent outcomes across the Member States;
- can promote convergent supervisory practices within the EU’s internal market and assist competent authorities to protect insurance policyholders in cross-border disputes with the introduction of collaboration platforms — to be set up whenever competent authorities see the need for coordination in the light of specific market developments — and improved information exchange between the different supervisors of insurance firms operating cross-border;
- with the other European supervisory authorities (ESAs), assesses the work of the national supervisors (peer reviews) and publishes reports to encourage compliance and increase transparency;
- in the event of money laundering or terrorist financing by financial sector operators or competent authorities within its remit, gives its prior agreement where a decision is to be taken by the European Banking Authority (which has overarching powers in this field with respect to all the ESAs).
FROM WHEN DOES THE REGULATION APPLY?
- Regulation (EU) No 1094/2010 has applied since 1 January 2011 (apart from its Article 76 on preparatory actions and Article 77(1) and (2) on transitional staff provisions which apply from 16 December 2010).
- Amending Regulation (EU) 2019/2175 has applied since 1 January 2020.
BACKGROUND
For further information, see:
MAIN DOCUMENT
Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (OJ L 331, 15.12.2010, pp. 48–83).
Successive amendments to Regulation (EU) No 1094/2010 have been incorporated in the original text. This consolidated version is of documentary value only.
RELATED DOCUMENTS
Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.6.2014, pp. 349–496).
See consolidated version.
Council Regulation (EU) No 1096/2010 of 17 November 2010 conferring specific tasks upon the European Central Bank concerning the functioning of the European Systemic Risk Board (OJ L 331,15.12.2010, pp. 162–164).
Commission Decision 2004/9/EC of 5 November 2003 establishing the European Insurance and Occupational Pensions Committee (OJ L 3, 7.1.2004, pp. 34–35).
