When the EU overhauled its financial system in response to the financial crisis, it introduced an EU Single Rulebook for financial regulation and created the European Supervisory Authorities (the ESAs): the European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA), and European Securities and Markets Authority (ESMA). The new EU supervisory system became operational on 1 January 2011. The ESAs' mandate is to contribute to developing the Single Rulebook, solve cross-border problems and promote supervisory convergence.
ESAs’ stakeholder groups
All three authorities have stakeholder groups that represent the industry and consumers in order to facilitate consultation with stakeholders in areas relevant to their tasks. EIOPA has two stakeholder groups, the IRSG (Insurance and Reinsurance Stakeholder Group) and the OPSG (Occupational Pensions Stakeholder Group). BIPAR is represented in these two groups.
BIPAR's responses to ESAs' consultations in 2016 and in 2017
During 2016 and 2017, BIPAR answered many ESAs' consultations on various issues (see articles on IDD, MiFID, PRIIPs, Big Data, Pension, new prudential regime for investment firms, and on mortgage).
EIOPA 2016 Consumer Trend Report
EIOPA is mandated by its empowering Regulation to collect, analyse and report on consumer trends. For this purpose, EIOPA publishes, on an annual basis, a Consumer Trends Report. The Report describes the trends that are taking place in the European insurance and pensions markets, as well as possible consumer protection issues that could arise from such trends.
The 2016 Report explains that in the ongoing context of a low interest rates environment, new life insurance products with reduced or no guarantees, sometimes with a high degree of complexity continue to be introduced into the market. It also shows, amongst other things, that Big Data and consumer analytics in motor insurance (black boxes), life and health insurance (wearable technology) and household insurance (geo-coding and connected houses), allow the accuracy of risk assessments to be improved and the development of more tailored products. Yet, the availability and affordability of insurance for some consumers could also be affected. In parallel to the increasing penetration of smartphones, Big Data analytics are increasingly turning to a mobile phone application-based approach, offering, among other things, the possibility to improve insurers' relationships with their consumers, for instance by tailored selling and marketing campaigns or by expediting claims handling.
General review of the ESAs in 2017 - EC Consultation
On 20 March the European Commission launched a public consultation on the ESAs. A general review of the ESAs is foreseen for this year and mandated by their founding Regulations. The Commission’s consultation was designed to gather evidence on the operation of the ESAs focusing on a number of issues in the following broad areas: 1) tasks and powers, 2) governance, 3) supervisory architecture and 4) funding. The aim is to identify areas where the effectiveness and efficiency of the ESAs can be strengthened and improved.
BIPAR submitted its response on 16 May. It explained that it is crucial that the ESAs do not use their current tools to goldplate EU texts themselves or to create a constantly changing set of basic regulations which need to be implemented by the industry. In this respect, legal certainty requires legal/regulatory stability. BIPAR also explained that it is crucial that the European supervisor in charge of insurance and occupational pensions' issues has a deep and excellent knowledge, understanding and expertise of the insurance industry. This can only be achieved by maintaining EIOPA as a stand-alone supervisor.