05.03.2014
European elections 2014

Financial supervisory system – retain existing supervisory structures

Formed in 2010, the European Supervisory Authorities (ESAs) and the European Systemic Risk Board (ESRB) are currently being subjected to an initial evaluation. The first experiences made show that the fundamental decisions that have been made were the right ones. However, some aspects require clarifications.

With respect to the current review of the regulations, the following aspects are particularly important for the insurance industry:

GDVRetain the three independent ESAs
Through the division into sectors (insurance, banks, securities and markets), it was recognised that different market conditions result in different supervisory requirements. This sectoral division must be retained in order to ensure that sector-specific as well as cross sector regulatory projects will profit from the necessary expertise. A “one size fits all”-approach cannot satisfy the specific requirements of the insurance sector. Accordingly, a potential expansion of supervisory powers to the European Central Bank (ECB) should also be opposed.

GDVReinforce interplay of national and European supervision
Currently, national insurance supervisory authorities are responsible for supervising the daily business of undertakings. The European Insurance and Occupational Pensions Authority (EIOPA) fulfils a supervisory and coordinating role. The interplay between EIOPA and the national supervisory authorities ensures effective supervision of the insurance market. It does not appear necessary to integrate EIOPA into direct supervision.

GDVEnsure one uniform reporting channel for reporting requirements
The increasing reporting requirements involving different authorities are a major problem for insurers. Through a uniform reporting channel (single point of entry), redundancies can be avoided and efficient reporting can be ensured. The sole recipient of the data should be the relevant national supervisory authority. If other authorities such as EIOPA, ESRB or ECB require data, they should obtain them from the authority that serves as the single point of entry.

GDV
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GDVDefine tasks and promote legal protection
It is of vital importance to involve the European Insurance and Occupational Pensions Authority (EIOPA) – as an independent expert authority – in the legislative process of developing the subordinated legal acts in an efficient and transparent manner. Guidelines can supplement binding regulations and provide orientation for the decisions that need to be implemented at the national level. However, guidelines should not go beyond basic legal acts or even lead to shadow regulation.

With respect to provisions aimed directly at undertakings (e.g. provisions for the complete discontinuation of business activity), neither deadlines nor prior hearings nor the option of remedial measures are envisaged at this stage. Subsequent legal protection cannot compensate this, since it has no suspensive effect. This represents a loophole which must be closed.

More:
>> Focus: Europe in the election year 2014 – The positions of the German insurers