Given previous public statements, it is little surprise to see its external-facing strategic objectives cover:
High priorities are the mandatory reviews of Solvency II (long-term guarantees and standard formula solvency capital requirement) and IDD support. 2017 will also see the second pension stress test, with EIOPA also contributing to the development of a pan-European personal pension product (although it remains unclear how the Commission will proceed with EIOPA’s recommendations). Insurance recovery and resolution remains firmly on the agenda, but with no fixed timetable.
There is a constant theme of moving EIOPA’s focus from regulation to supervision and oversight, with supervisory convergence being one of EIOPA’s strategic priorities. Peer reviews of national competent authorities, participation in colleges, thematic work will all continue and EIOPA intends to expand its work on developing a supervisory handbook to ensure greater harmonisation of supervisory approaches. It is unclear which areas this will cover, with the only area given specific mention being internal models.
Consumer protection is the second strategic priority, not limited to the areas covered in our IDD article. EIOPA states that it aims to “engender a more consumer-centric culture in firms” and that it “stands ready” to issue additional guidance to ensure its product oversight and governance Guidelines are consistently implemented. It will also continue with its consumer related reports – such as its Annual Consumer Trends Report – as well as tackling the issue of accessibility of both insurance and pension products for low-income households and considering the risks associated with digitalisation and changing distribution models.
The final strategic priority is financial stability. Particular aspects include assessment of procyclicality risks, aligning Solvency II with the work of the IAIS on its insurance capital standard and recovery and resolution proposals.
Overall, the paper indicates that there will continue to be a strong flow of material from EIOPA throughout 2017, which firms will need to digest and adapt to. It is unlikely that the Supervisory Handbook will be made available to firms, but while greater harmonisation of supervisory approaches is to be welcomed, it brings with it a threat of additional challenge to matters believed to be agreed at a local supervisor level. Key amongst this threat is EIOPA’s plans to develop its own model indicators to be used in assessing the consistency of implementation and calibration of group internal models, with groups keen to avoid an elongated model change approval process.
For more information, please contact Janine Hawes.